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| EXCEL - IDEA: XBRL DOCUMENT - APEX 2 INC. | Financial_Report.xls |
| EX-31.2 - CERTIFICATION - APEX 2 INC. | apex_ex312.htm |
| EX-32.2 - CERTIFICATION - APEX 2 INC. | apex_ex322.htm |
| EX-32.1 - CERTIFICATION - APEX 2 INC. | apex_ex321.htm |
| EX-31.1 - CERTIFICATION - APEX 2 INC. | apex_ex311.htm |
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
(Mark One)
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x ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended December 31, 2013
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o TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from ______________ to ______________
APEX 2, Inc.
(Exact name of Company as specified in its charter)
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Delaware
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80-0725943
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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MAP Universal LLC
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c/o Martin Mobarak
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90 SW 3rd Street, Penthouse 4
Miami, FL 33130
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(Address of principal executive offices)
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772-216-6460
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(Company’s telephone number, including area code)
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Securities registered under Section 12(b) of the Exchange Act: None
Securities registered under Section 12(g) of the Exchange Act: Common Stock
Check whether the Company is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No x
Check whether the Company is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. o
Check whether the Company (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the Company was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the Company has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Company was required to submit and post such files). Yes x No o
Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-K (§229.405 of this chapter) contained herein, and no disclosure will be contained, to the best of Company’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. o
Check whether the Company is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
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Large Accelerated Filer
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Accelerated Filer
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Non-accelerated Filer
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Smaller Reporting Company
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x
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Check whether the issuer is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes x No o
As of March 5, 2014 there was no market for the common stock and no shares were held by non-affiliates of the issuer.
As of March 5, 2014, there were 10,000,000 shares of common stock, par value $.0001, outstanding.
Documents Incorporated By Reference: None.
FORWARD-LOOKING STATEMENTS
Certain statements made in this Annual Report on Form 10-K are “forward-looking statements” (within the meaning of the Private Securities Litigation Reform Act of 1995) regarding the plans and objectives of management for future operations. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of Apex 2, Inc. (the “Company”) to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The forward-looking statements included herein are based on current expectations that involve numerous risks and uncertainties. The Company’s plans and objectives are based, in part, on assumptions involving the continued expansion of business. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the control of the Company. Although the Company believes its assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, there can be no assurance the forward-looking statements included in this Report will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by the Company or any other person that the objectives and plans of the Company will be achieved.
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PART I
Item 1: Description of Business.
(a) Business Development
Apex 2, Inc. (the “Company”) was incorporated under the laws of the State of Delaware on May 17, 2011 and has been inactive since inception. The Company intends to serve as a vehicle to effect an asset acquisition, merger, exchange of capital stock or other business combination with a domestic or foreign business.
(b) Business of Issuer
Based on proposed business activities, we are a “blank check” company. The SEC defines those companies as “any development stage company that is issuing a penny stock, within the meaning of Section 3 (a)(51) of the Exchange Act, and that has no specific business plan or purpose, or has indicated that its business plan is to merge with an unidentified company or companies.” Many states have enacted statutes, rules and regulations limiting the sale of securities of “blank check” companies in their respective jurisdictions. 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.
We were organized as a vehicle to investigate and, if such investigation warrants, acquire a target company or business seeking the perceived advantages of being a publicly held corporation. Our principal business objective for the next 12 months and beyond such time will be to achieve long-term growth potential through a combination with a business rather than immediate, short-term earnings. We will not restrict our potential candidate target companies to any specific business, industry or geographical location and, thus, may acquire any type of business.
The analysis of new business opportunities has and will be undertaken by or under the supervision of the officers and directors of the Company. The Company has considered potential acquisition transactions with several companies, but as of this date has not entered into any Letter of Intent or other agreement with any party. The Company has unrestricted flexibility in seeking, analyzing and participating in potential business opportunities. In its efforts to analyze potential acquisition targets, the Company will consider the following kinds of factors:
(a) Potential for growth, indicated by new technology, anticipated market expansion or new products;
(b) Competitive position as compared to other firms of similar size and experience within the industry segment as well as within the industry as a whole;
(c) Strength and diversity of management, either in place or scheduled for recruitment;
(d) Capital requirements and anticipated availability of required funds, to be provided by the Company or from operations, through the sale of additional securities, through joint ventures or similar arrangements or from other sources;
(e) The cost of participation by the Company as compared to the perceived tangible and intangible values and potentials;
(f) The extent to which the business opportunity can be advanced;
(g) The accessibility of required management expertise, personnel, raw materials, services, professional assistance and other required items; and
(h) Other relevant factors.
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In applying the foregoing criteria, no one of which will be controlling, management will attempt to analyze all factors and circumstances and make a determination based upon reasonable investigative measures and available data. Potentially available business opportunities may occur 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. Due to the Company’s limited capital available for investigation, the Company may not discover or adequately evaluate adverse facts about the opportunity to be acquired.
Form of Acquisition
The manner in which the Company participates in an opportunity will depend upon the nature of the opportunity, the respective needs and desires of the Company and the promoters of the opportunity, and the relative negotiating strength of the Company and such promoters.
It is likely that the Company will acquire its participation in a business opportunity through the issuance of common stock or other securities of the Company. Although the terms of any such transaction cannot be predicted, it should be noted that in certain circumstances the criteria for determining whether or not an acquisition is a so-called “tax free” reorganization under Section 368(a)(1) of the Internal Revenue Code of 1986, as amended (the “Code”), depends upon whether the owners of the acquired business own 80% or more of the voting stock of the surviving entity. If a transaction were structured to take advantage of these provisions rather than other “tax free” provisions provided under the Code, all prior stockholders would in such circumstances retain 20% or less of the total issued and outstanding shares of the surviving entity. Under other circumstances, depending upon the relative negotiating strength of the parties, prior stockholders may retain substantially less than 20% of the total issued and outstanding shares of the surviving entity. This could result in substantial additional dilution to the equity of those who were stockholders of the Company prior to such reorganization.
The present stockholder of the Company will likely not have control of a majority of the voting shares of the Company following a reorganization transaction. As part of such a transaction, the Company’s sole director may resign and new directors may be appointed without any vote by stockholders.
In the case of an acquisition, the transaction may be accomplished upon the sole determination of management without any vote or approval by stockholders. In the case of a statutory merger or consolidation directly involving us, it will likely be necessary to call a stockholders’ meeting and obtain the approval of the holders of a majority of the outstanding shares. The necessity to obtain such stockholder approval may result in delay and additional expense in the consummation of any proposed transaction and will also give rise to certain appraisal rights to dissenting stockholders. Most likely, management will seek to structure any such transaction so as not to require stockholder approval.
It is anticipated that the investigation of specific business opportunities and the negotiation, drafting and execution of relevant agreements, disclosure documents and other instruments will require substantial management time and attention and substantial cost for accountants, attorneys and others. If a decision is made not to participate in a specific business opportunity, the costs theretofore incurred in the related investigation would not be recoverable. Furthermore, even if an agreement is reached for the participation in a specific business opportunity, the failure to consummate that transaction may result in the loss to the Company of the related costs incurred.
We presently have no employees. Our sole officer and director is engaged in outside business activities and anticipates that he will devote to our business only several hours per week until the acquisition of a successful business opportunity has been consummated. We expect no significant changes in the number of our employees other than such changes, if any, incident to a business combination.
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Item 1A: Risk Factors
Risk Factors
An investment in the company is highly speculative in nature and involves an extremely high degree of risk.
Our Business Is Difficult To Evaluate Because We Have No Operating History.
As we have no operating history or revenue and only minimal assets, there is a risk that we will be unable to continue as a going concern and consummate a business combination. We have had no recent operating history nor any revenues or earnings from operations since inception. We have no significant assets or financial resources. We will, in all likelihood, sustain operating expenses without corresponding revenues, at least until the consummation of a business combination. This may result in our incurring a net operating loss that will increase continuously until we can consummate a business combination with a profitable business opportunity. We cannot assure you that we can identify a suitable business opportunity and consummate a business combination.
There Is Competition For Those Private Companies Suitable For A Merger Transaction Of The Type Contemplated By Management.
We are in a highly competitive market for a small number of business opportunities which could reduce the likelihood of consummating a successful business combination. We are and will continue to be an insignificant participant in the business of seeking mergers with, joint ventures with and acquisitions of small private and public entities. A large number of established and well-financed entities, including small public companies and venture capital firms, are active in mergers and acquisitions of companies that may be desirable target candidates for us. Nearly all these entities have significantly greater financial resources, technical expertise and managerial capabilities than we do; consequently, we will be at a competitive disadvantage in identifying possible business opportunities and successfully completing a business combination. These competitive factors may reduce the likelihood of our identifying and consummating a successful business combination.
Future Success Is Highly Dependent On The Ability Of Management To Locate And Attract A Suitable Acquisition.
The nature of our operations is highly speculative and there is a consequent risk of loss of your investment. The success of our plan of operation will depend to a great extent on the operations, financial condition and management of the identified business opportunity. While management intends to seek business combination(s) with entities having established operating histories, we cannot assure you that we will be successful in locating candidates meeting that criterion. In the event we complete a business combination, the success of our operations may be dependent upon management of the successor firm or venture partner firm and numerous other factors beyond our control.
The Company Has No Existing Agreement For A Business Combination Or Other Transaction.
We have no arrangement, agreement or understanding with respect to engaging in a merger with, joint venture with or acquisition of, a private or public entity. No assurances can be given that we will successfully identify and evaluate suitable business opportunities or that we will conclude a business combination. Management has not identified any particular industry or specific business within an industry for evaluation. We cannot guarantee that we will be able to negotiate a business combination on favorable terms, and there is consequently a risk that funds allocated to the purchase of our shares will not be invested in a company with active business operations.
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Management Intends To Devote Only A Limited Amount Of Time To Seeking A Target Company Which May Adversely Impact Our Ability To Identify A Suitable Acquisition Candidate.
While seeking a business combination, management anticipates devoting no more than a few hours per week to our affairs. Our sole officer has not entered into a written employment agreement with us and is not expected to do so in the foreseeable future. This limited commitment may adversely impact our ability to identify and consummate a successful business combination.
The Time And Cost Of Preparing A Private Company To Become A Public Reporting Company May Preclude Us From Entering Into A Merger Or Acquisition With The Most Attractive Private Companies.
Target companies that fail to comply with SEC reporting requirements may delay or preclude acquisition. Sections 13 and 15(d) of the Exchange Act require reporting companies to provide certain information about significant acquisitions, including certified financial statements for the company acquired, covering one, two, or three years, depending on the relative size of the acquisition. The time and additional costs that may be incurred by some target entities to prepare these statements may significantly delay or essentially preclude consummation of an acquisition. Otherwise suitable acquisition prospects that do not have or are unable to obtain the required audited statements may be inappropriate for acquisition so long as the reporting requirements of the Exchange Act are applicable.
The Company May Be Subject To Further Government Regulation Which Would Adversely Affect Our Operations.
Although we will be subject to the reporting requirements under the Exchange Act, management believes we will not be subject to regulation under the Investment Company Act of 1940, as amended (the “Investment Company Act”), since we will not be engaged in the business of investing or trading in securities. If we engage in business combinations which result in our holding passive investment interests in a number of entities, we could be subject to regulation under the Investment Company Act. If so, we would be required to register as an investment company and could be expected to incur significant registration and compliance costs. We have obtained no formal determination from the Securities and Exchange Commission as to our status under the Investment Company Act and, consequently, violation of the Act could subject us to material adverse consequences.
Any Potential Acquisition Or Merger With A Foreign Company May Subject Us To Additional Risks.
If we enter into a business combination with a foreign concern, we will be subject to risks inherent in business operations outside of the United States. These risks include, for example, currency fluctuations, regulatory problems, punitive tariffs, unstable local tax policies, trade embargoes, risks related to shipment of raw materials and finished goods across national borders and cultural and language differences. Foreign economies may differ favorably or unfavorably from the United States economy in growth of gross national product, rate of inflation, market development, rate of savings, and capital investment, resource self-sufficiency and balance of payments positions, and in other respects.
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There Is Currently No Trading Market For Our Common Stock.
Outstanding shares of our Common Stock cannot be offered, sold, pledged or otherwise transferred unless subsequently registered pursuant to, or exempt from registration under, the Securities Act and any other applicable federal or state securities laws or regulations. These restrictions will limit the ability of our stockholders to liquidate their investment.
Our Business Will Have No Revenues Unless And Until We Merge With Or Acquire An Operating Business.
We are a development stage company and have had no revenues from operations. We may not realize any revenues unless and until we successfully merge with or acquire an operating business.
The Company Intends To Issue More Shares In A Merger Or Acquisition, Which Will Result In Substantial Dilution.
Our certificate of incorporation authorizes the issuance of a maximum of 100,000,000 shares of common stock and a maximum of 5,000,000 shares of preferred stock. Any merger or acquisition effected by us may result in the issuance of additional securities without stockholder approval and may result in substantial dilution in the percentage of our common stock held by our then existing stockholders. Moreover, the common stock issued in any such merger or acquisition transaction may be valued on an arbitrary or non-arm’s-length basis by our management, resulting in an additional reduction in the percentage of common stock held by our then existing stockholders. Our Board of Directors has the power to issue any or all of such authorized but unissued shares without stockholder approval. To the extent that additional shares of Common Stock or Preferred Stock are issued in connection with a business combination or otherwise, dilution to the interests of our stockholders will occur and the rights of the holders of Common Stock might be materially adversely affected.
The Company Has Conducted No Market Research Or Identification Of Business Opportunities, Which May Affect Our Ability To Identify A Business To Merge With Or Acquire.
We have neither conducted nor have others made available to us results of market research concerning prospective business opportunities. Therefore, we have no assurances that market demand exists for a merger or acquisition as contemplated by us. Our management has not identified any specific business combination or other transactions for formal evaluation by us, such that it may be expected that any such target business or transaction will present such a level of risk that conventional private or public offerings of securities or conventional bank financing will not be available. There is no assurance that we will be able to acquire a business opportunity on terms favorable to us. Decisions as to which business opportunity to participate in will be unilaterally made by our management, which may act without the consent, vote or approval of our stockholders.
Because We May Seek To Complete A Business Combination Through A “Reverse Merger”, Following Such A Transaction We May Not Be Able To Attract The Attention Of Major Brokerage Firms.
Additional risks may exist since we will assist a privately held business to become public through a “reverse merger.” Securities analysts of major brokerage firms may not provide coverage of our Company since there is no incentive to brokerage firms to recommend the purchase of our common stock. No assurance can be given that brokerage firms will want to conduct any secondary offerings on behalf of our post-merger company in the future.
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We Cannot Assure You That Following A Business Combination With An Operating Business, Our Common Stock Will Be Listed On NASDAQ Or Any Other Securities Exchange.
Following a business combination, we may seek the listing of our common stock on NASDAQ or the American Stock Exchange. However, we cannot assure you that following such a transaction, we will be able to meet the initial listing standards of either of those or any other stock exchange, or that we will be able to maintain a listing of our common stock on either of those or any other stock exchange. After completing a business combination, until our common stock is listed on the NASDAQ or another stock exchange, we expect that our common stock would be eligible to trade on the OTC Bulletin Board, another over-the-counter quotation system, or on the “pink sheets,” where our stockholders may find it more difficult to dispose of shares or obtain accurate quotations as to the market value of our common stock. In addition, we would be subject to an SEC rule that, if it failed to meet the criteria set forth in such rule, imposes various practice requirements on broker-dealers who sell securities governed by the rule to persons other than established customers and accredited investors. Consequently, such rule may deter broker-dealers from recommending or selling our common stock, which may further affect its liquidity. This would also make it more difficult for us to raise additional capital following a business combination.
There Is No Public Market For Our Common Stock, Nor Have We Ever Paid Dividends On Our Common Stock.
There is no public trading market for our common stock and none is expected to develop in the foreseeable future unless and until we complete a business combination with an operating business and such business files a registration statement under the Securities Act of 1933, as amended.
Additionally, we have never paid dividends on our Common Stock and do not presently intend to pay any dividends in the foreseeable future. We anticipate that any funds available for payment of dividends will be re-invested into the Company to further its business strategy.
Authorization of Preferred Stock.
Our Certificate of Incorporation authorizes the issuance of up to 5,000,000 shares of preferred stock with designations, rights and preferences determined from time to time by its Board of Directors. Accordingly, our Board of Directors is empowered, without stockholder approval, to issue preferred stock with dividend, liquidation, conversion, voting, or other rights which could adversely affect the voting power or other rights of the holders of the common stock. In the event of issuance, the preferred stock could be utilized, under certain circumstances, as a method of discouraging, delaying or preventing a change in control of the Company. Although we have no present intention to issue any shares of its authorized preferred stock, there can be no assurance that we will not do so in the future.
Control by Management.
Management currently owns 100% of all the issued and outstanding capital stock of the Company. Consequently, management has the ability to control the operations of the Company and will have the ability to control substantially all matters submitted to stockholders for approval, including:
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Election of the board of directors;
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Removal of any directors;
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Amendment of the Company’s certificate of incorporation or bylaws; and
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Adoption of measures that could delay or prevent a change in control or impede a merger, takeover or other business combination.
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Our CEO and Director owns 100% of our issued and outstanding common stock. Accordingly, this concentration of ownership by itself may have the effect of impeding a merger, consolidation, takeover or other business consolidation, or discouraging a potential acquirer from making a tender offer for the common stock.
This Report Contains Forward-Looking Statements And Information Relating To Us, Our Industry And To Other Businesses.
These forward-looking statements are based on the beliefs of our management, as well as assumptions made by and information currently available to our management. When used in this prospectus, the words “estimate,” “project,” “believe,” “anticipate,” “intend,” “expect” and similar expressions are intended to identify forward-looking statements. These statements reflect our current views with respect to future events and are subject to risks and uncertainties that may cause our actual results to differ materially from those contemplated in our forward-looking statements. We caution you not to place undue reliance on these forward-looking statements, which speak only as of the date of this prospectus. We do not undertake any obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of this prospectus or to reflect the occurrence of unanticipated events.
Item 1B: Unresolved Staff Comment.
None
Item 2: Description of Property.
We neither rent nor own any properties. We currently have no policy with respect to investments or interests in real estate, real estate mortgages or securities of, or interests in, persons primarily engaged in real estate activities.
Item 3: Legal Proceedings.
There are not presently any material pending legal proceedings to which the Company is a party or as to which any of its property is subject, and no such proceedings are known to the Company to be threatened or contemplated against it.
Item 4: Mine Safety Disclosures.
Not applicable.
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PART II
Item 5: Market for Common Equity, Related Stockholder Matters and Small Business Issuer Purchases of Equity Securities.
Common Stock
Our Certificate of Incorporation authorizes the issuance of up to 100,000,000 shares of common stock, par value $.0001 per share (the “Common Stock”). The Common Stock is not listed on a publicly-traded market. As of March 5, 2014, there was one holder of record of the Common Stock.
Preferred Stock
Our Certificate of Incorporation authorizes the issuance of up to 5,000,000 shares of preferred stock, par value $.0001 per share (the “Preferred Stock”). The Company has not yet issued any of its preferred stock.
Dividends
We have not paid any dividends on our common stock to date and do not intend to pay dividends prior to the completion of a business combination. The payment of dividends in the future will be contingent upon our revenues and earnings, if any, capital requirements and general financial condition subsequent to completion of a business combination. The payment of any dividends subsequent to a business combination will be within the discretion of our then board of directors. It is the present intention of our board of directors to retain all earnings, if any, for use in our business operations and, accordingly, our board does not anticipate declaring any dividends in the foreseeable future.
Securities Authorized for Issuance under Equity Compensation Plans
The Company does not have any equity compensation plans or any individual compensation arrangements with respect to its common stock or preferred stock. The issuance of any of our common or preferred stock is within the discretion of our Board of Directors, which has the power to issue any or all of our authorized but unissued shares without stockholder approval.
The Company’s Board of Directors has the power to issue any or all of the authorized but unissued Common Stock without stockholder approval. The Company currently has no commitments to issue any shares of common stock. However, the Company will, in all likelihood, issue a substantial number of additional shares in connection with a business combination. Since the Company expects to issue additional shares of common stock in connection with a business combination, existing stockholders of the Company may experience substantial dilution in their shares. However, it is impossible to predict whether a business combination will ultimately result in dilution to existing shareholders. If the target has a relatively weak balance sheet, a business combination may result in significant dilution. If a target has a relatively strong balance sheet, there may be little or no dilution.
Issuer Purchases of Equity Securities
None
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Item 6: Selected Financial Data.
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide this information.
Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operation.
Results of Operations
The following results of operations, cash flows and changes in our financial position are for year ended December 31, 2013 and for the period from May 17, 2011 (inception) through December 31, 2013.
The Company had no revenue for the years ended December 31, 2013 and 2012 and for the period from May 17, 2011 (inception) through December 31, 2013. Expenses during the years ended December 31, 2013 and 2012 were $15,110 and $9,650 respectively and $27,760 from May 17, 2011 (Inception) to December 31, 2013. The increases in expenses in 2013 from 2012 were due to an increase audit and accounting fees occurring in 2013 over 2012. Other expenses consisted of and filing fees.
Liquidity and Capital Resources
As of December 31, 2013 the Company had an accumulative deficit of $27,760 and no cash.
Cash used in operating activities was $16,360 and $8,400 for the years ended December 31, 2013 and 2012, respectively, and $26,760 during the period from May 17, 2011 (inception) through December 31, 2013.
The Company funded its operations from advances from a related party. For the year ended December 31, 2013 and 2012, and for the period from May 17, 2011 (inception) through December 31, 2013 cash provided by our director was $16,360, $8,400 and $26,760, respectively.
We were organized as a vehicle to investigate and, if such investigation warrants, acquire a target company or business seeking the perceived advantages of being a publicly held corporation. Our principal business objective for the next 12 months and beyond such time will be to achieve long-term growth potential through a combination with a business rather than immediate, short-term earnings. We will not restrict our potential candidate target companies to any specific business, industry or geographical location and, thus, may acquire any type of business.
We do not currently engage in any business activities that provide cash flow. The costs of investigating and analyzing business combinations for the next 12 months and beyond such time will be paid with amounts to be loaned to or invested in us by our stockholders or other investors.
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During the next twelve months we anticipate incurring costs related to:
(i) filing of Exchange Act reports, and
(ii) costs relating to consummating an acquisition.
We believe we will be able to meet these costs through amounts, as necessary, to be loaned to or invested in us by our stockholder or other investors.
We may consider a business which has recently commenced operations, is a developing company in need of additional funds for expansion into new products or markets, is seeking to develop a new product or service, or is an established business which may be experiencing financial or operating difficulties and is in need of additional capital. In the alternative, a business combination may involve the acquisition of, or merger with, a company which does not need substantial additional capital, but which desires to establish a public trading market for its shares, while avoiding, among other things, the time delays, significant expense, and loss of voting control which may occur in a public offering.
Any target business that is selected may be a financially unstable company or an entity in its early stages of development or growth, including entities without established records of sales or earnings. In that event, we will be subject to numerous risks inherent in the business and operations of financially unstable and early stage or potential emerging growth companies. In addition, we may effect a business combination with an entity in an industry characterized by a high level of risk, and, although our management will endeavor to evaluate the risks inherent in a particular target business, there can be no assurance that we will properly ascertain or assess all significant risks.
Our management anticipates that it will likely be able to effect only one business combination, due primarily to our limited financing, and the dilution of interest for present and prospective stockholders, which is likely to occur as a result of our management’s plan to offer a controlling interest to a target business in order to achieve a tax-free reorganization. This lack of diversification should be considered a substantial risk in investing in us, because it will not permit us to offset potential losses from one venture against gains from another.
We anticipate that the selection of a business combination will be complex and extremely risky. Because of general economic conditions, rapid technological advances being made in some industries and shortages of available capital, our management believes that there are numerous firms seeking even the limited additional capital which we will have and/or the perceived benefits of becoming a publicly traded corporation. Such perceived benefits of becoming a publicly traded corporation include, among other things, facilitating or improving the terms on which additional equity financing may be obtained, providing liquidity for the principals of and investors in a business, creating a means for providing incentive stock options or similar benefits to key employees, and offering greater flexibility in structuring acquisitions, joint ventures and the like through the issuance of stock. Potentially available business combinations may occur 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 do not currently intend to retain any entity to act as a “finder” to identify and analyze the merits of potential target businesses.
Off-Balance Sheet Arrangements
The Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.
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Contractual Obligations
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide this information.
Item 7A: Quantitative and Qualitative Disclosures about Market Risk.
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide this information.
Item 8: Financial Statements and Supplementary Data.
Please see the financial statements beginning on page F-1 located elsewhere in this annual report on Form 10-K and incorporated herein by reference.
Item 9: Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
None
During the fiscal year ended December 31, 2011, and through March 17, 2012, there have been no disagreements with Kenne Ruan, CPA on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements if not resolved to the satisfaction of Kenne Ruan, CPA would have caused him to make reference thereto in connection with their report on the financial statements for such years.
On December 17, 2012 the Company engaged D. Brooks & Associates CPA’s, P.A., as its new independent registered public accounting firm.
Item 9A (T): Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
For purposes of this section, the term disclosure controls and procedures means controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Securities Exchange Act of 1934, as amended (the “Act”) (15 U.S.C. 78a et seq.) is recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Act is accumulated and communicated to the issuer's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. It should be noted that the design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote. As of the end of the period covered by this Annual Report, The Company carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on this evaluation, our CEO and CFO has concluded that the Company’s disclosure controls and procedures are not effective because of the identification of a material weakness in our internal control over financial reporting which is identified below, which The Company view as an integral part of our disclosure controls and procedures.
13
Changes in Internal Controls over Financial Reporting
The Company has not yet made any changes in our internal controls over financial reporting that occurred during the period covered by this report on Form 10-K that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Management’s Annual Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act. Our internal control system was designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes, in accordance with generally accepted accounting principles. Because of inherent limitations, a system of 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 due to change in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Our management conducted an evaluation of the effectiveness of our internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework. Based on its evaluation, our management concluded that there are material weaknesses in our internal control over financial reporting. A material weakness is a deficiency, or a combination of control deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.
The material weaknesses relate to the following:
|
-
|
Lack of segregation of duties in financial reporting, as our financial reporting and all accounting functions are performed by our Chief Executive Officer. Our President does not possess accounting expertise and our company does not have an audit committee.
|
|
-
|
Lack of a formal review process that includes multiple levels of review, as all accounting and financial reporting functions are performed by our Chief Financial Officer and the work is not reviewed by anyone.
|
These weaknesses are due to the company’s lack of working capital to hire additional staff. To remedy the material weaknesses, we intend to engage another accountant to assist with financial reporting as soon as our finances will allow.
This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to the attestation by the Company’s registered public accounting firm pursuant to temporary rules of the SEC that permit the Company to provide only management’s report in this annual report.
Changes in Internal Controls
There were no changes in our internal control over financial reporting during the quarter ended December 31, 2013 that have affected, or are reasonably likely to affect, our internal control over financial reporting.
Item 9B: Other Information.
Not applicable.
14
PART III
Item 10: Directors, Executive Officers, Promoters and Control Persons; Compliance With Section 16(a) of the Exchange Act.
Our sole officer and director will serve until his successor is elected and qualified. Our officer is elected by the board of directors to a term of one (1) year and serves until his or his successor is duly elected and qualified, or until he or she is removed from office. The board of directors has no nominating, auditing or compensation committees.
The name, address, age and positions of our present officer and director are set forth below:
|
Name
|
Age
|
Position(s)
|
||
|
Martin Mobarak
90 SW 3rd Street, Penthouse 4
Miami, FL 33130
|
48
|
Chairman of the Board of Directors, Chief Executive Officer, President, Secretary and Treasurer and Director
|
Martin Mobarak Age 48, Chairman of the Board of Directors, Chief Executive Officer, President, Secretary and Treasurer
Mr. Mobarak is the President and CEO of MAP Universal LLC, the owner and operator of Cía Minera Dorosa, S.A. de C.V in Mexico City, Mexico. Cía Minera Dorosa, is a development stage silver mine project in the process of mining for silver for delivery to larger mineral resource companies. Since the acquisition of the mining claim in 2009, Mr. Mobarak has introduced access to the infrastructure such as electrical power, water supply, mining equipment and a laboratory facility capable of processing 400 tons of ore per day.
Mr. Martin Mobarak began his professional experience as a Bering Sea fisherman in 1989. By 1992, Mr. Mobarak owned a multi-vessel commercial and charter fishing fleet in Alaska. In Alaska, he went on to found Servcom Inc. Servcom was one of the first Internet service providers supplying connectivity for the City of Anchorage, Alaska and the surrounding areas. Servcom was later sold to an affiliate of AT&T for one million dollars. From 1997 to 1999 Mr. Mobarak entered the hospitality industry by building a Hotel & Bed and Breakfast in Mexico. In 2001 Mr. Mobarak purchased a hangar at a regional airport in South Florida and started several aviation enterprises under the name Mobarak Aircraft LLC, which included; Interior design, furniture, and fixtures. In addition, he launched a jet fuel service, a food service under the name Frankie’s Jet Way Café, and a private aircraft leasing company, Air Charter of Florida. Mr. Mobarak sold his aviation business to Rizzivi, a hedge fund in 1998 for $8.9 million dollars.
Conflict of Interest
The Officer and Director of the Company will devote most of his time to the Company however; there will be occasions when the time requirements of the Company’s business conflict with the demands of their other business and investment activities. Such conflicts may require that the Company attempt to employ additional personnel. There is no assurance that the services of such persons will be available or that they can be obtained upon terms favorable to the Company.
There is no procedure in place which would allow the Officer and Director to resolve potential conflicts in an arms-length fashion. Accordingly, they will be required to use their discretion to resolve them in a manner which they consider appropriate.
The Company’s Officer and Director may actively negotiate or otherwise consent to the purchase of a portion of his common stock as a condition to, or in connection with, a proposed merger or acquisition transaction. It is anticipated that a substantial premium over the initial cost of such shares may be paid by the purchaser in conjunction with any sale of shares by the Company’s Officer and Director which is made as a condition to, or in connection with, a proposed merger or acquisition transaction. The fact that a substantial premium may be paid to the Company’s Officer and Director to acquire his shares creates a potential conflict of interest for him, in satisfying his fiduciary duties to the Company and its other shareholders. Even though such a sale could result in a substantial profit to them, they would be legally required to make the decision based upon the best interests of the Company and the Company’s other shareholders, rather than their own personal pecuniary benefit.
15
Compliance with Section 16(a) of the Exchange Act
Section 16(a) of the Exchange Act requires the Company’s directors and officers, and persons who beneficially own more than 10% of a registered class of the Company’s equity securities, to file reports of beneficial ownership and changes in beneficial ownership of the Company’s securities with the SEC on Forms 3, 4 and 5. Officers, directors and greater than 10% stockholders are required by SEC regulation to furnish the Company with copies of all Section 16(a) forms they file.
Based solely on the Company’s review of the copies of the forms received by it during the fiscal year ended December 31, 2013 and written representations that no other reports were required, the Company believes that no person who, at any time during such fiscal year, was a director, officer or beneficial owner of more than 10% of the Company’s common stock failed to comply with all Section 16(a) filing requirements during such fiscal years.
Code of Ethics
We have not adopted a Code of Business Conduct and Ethics that applies to our principal executive officer, principal financial officer, and principal accounting officer or controller, or persons performing similar functions in that our sole officer and director serve in these capacities.
Nominating Committee
We have not adopted any procedures by which security holders may recommend nominees to our Board of Directors.
Audit Committee
There is no audit committee.
Item 11: Executive Compensation.
Our officer and director does not receive any compensation for services rendered to the Company since inception, has not received such compensation in the past, and is not accruing any compensation pursuant to any agreement with the Company. No remuneration of any nature has been paid for or on account of services rendered by a director in such capacity. Our officer and director intends to devote no more than (25) twenty five hours per week to our affairs.
Our officer and director will not receive any finder’s fee, either directly or indirectly, as a result of any efforts to implement our business plan outlined herein.
It is possible that, after we successfully consummates a business combination with an unaffiliated entity, that entity may desire to employ or retain our management for the purposes of providing services to the surviving entity. However, we have adopted a policy whereby the offer of any post-transaction employment to members of management will not be a consideration in our decision whether to undertake any proposed transaction.
No retirement, pension, profit sharing, stock option or insurance programs or other similar programs have been adopted for the benefit of its employees.
There are no understandings or agreements regarding compensation our management will receive after a business combination that is required to be included in this table, or otherwise.
16
Director Compensation
We do not currently pay any cash fees to our director, nor do we pay director’s expenses in attending board meetings.
Employment Agreements
The Company is not a party to any employment agreements.
Item 12: Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
(a) Security ownership of certain beneficial owners.
The following table sets forth, as of March 5, 2014, the number of shares of Common Stock owned of record and beneficially by executive officers, directors and persons who hold 5% or more of the outstanding Common Stock of the Company. Also included are the shares held by all executive officers and directors as a group.
|
Name and Address
|
Amount and
Nature of
Beneficial Ownership
|
Percentage of
Class
|
||||||
|
MAP Universal LLC(1)
|
10,000,000 | 100 | % | |||||
|
90 SW 3rd Street, Penthouse 4
Miami, FL 33130
|
||||||||
|
All Officers and Directors as a group
|
10,000,000 | 100 | % | |||||
_____________
(1) Martin Mobarak, the Company’s sole officer and director, is the President of MAP Universal LLC and has sole voting and investment power with respect to the shares of our common stock.
Item 13: Certain Relationships and Related Transactions.
Except as otherwise indicated herein, there have been no related party transactions, or any other transactions or relationships required to be disclosed pursuant to Item 404 of Regulation S-K.
17
Item 14: Principal Accounting Fees and Services.
The following table presents for each of the last two fiscal years the aggregate fees billed in connection with the audits of our financial statements and other professional services rendered by our independent registered public accounting firm D. Brooks & Associates CPA’s, P.A.
|
|
2013
|
2012
|
||||||
|
Audit fees
|
$ | 7,500 | $ | 1,500 | ||||
|
Audit related fees
|
- | - | ||||||
|
Tax fees
|
- | - | ||||||
|
All other fees
|
- | - | ||||||
Audit fees consist of fees billed for professional services rendered for the audit of our financial statements and review of the interim financial statements included in quarterly reports and services that are normally provided by the above auditors in connection with statutory and regulatory fillings or engagements
In the absence of a formal audit committee, the full Board of Directors pre-approves all audit and non-audit services to be performed by the independent registered public accounting firm in accordance with the rules and regulations promulgated under the Securities Exchange Act of 1934, as amended. The Board of Directors pre-approved 100% of the audit, audit-related and tax services performed by the independent registered public accounting firm for the fiscal year ended December 31, 2013.
18
PART IV
Item 15. Exhibits, Financial Statement Schedules.
(a) Exhibits:
|
Incorporated by reference
|
||||||||||||
|
Exhibit
|
Exhibit Description
|
Filed herewith
|
Form
|
Period ending
|
Exhibit
|
Filing date
|
||||||
|
31
|
Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
X
|
||||||||||
|
32
|
Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
X
|
||||||||||
|
101
|
Interactive Data Files for the APEX 2 Inc. Form 10K for the period ended December 31, 2013
|
X
|
||||||||||
(b) The following documents are filed as part of the report:
1. Financial Statements: Balance Sheets, Statements of Operations, Statement of Stockholder’s Equity, Statements of Cash Flows, and Notes to Financial Statements.
19
SIGNATURES
In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
APEX 2, INC.
|
|||
|
Dated: March 5, 2014
|
By:
|
/s/ Martin Mobarak
|
|
|
Martin Mobarak
|
|||
|
President and Director
|
|||
|
Principal Executive Officer
|
|||
|
Principal Financial Officer
|
|||
In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Company and in the capacities and on the dates indicated.
|
Title
|
Date
|
||||
|
/s/ Martin Mobarak
|
|||||
|
Martin Mobarak
|
President, Secretary, Chief
|
March 5, 2014
|
|||
|
Financial Officer and Sole Director
|
20
apex 2, inc.
(A Development Stage Company)
FINANCIAL STATEMENTS
Contents
|
Financial Statements
|
PAGE
|
|||
|
Reports of Independent Registered Public Accounting Firm
|
F-2 | |||
|
Balance Sheets as of December 31, 2013 and 2012
|
F-3 | |||
|
Statements of Operations for the Years ended December 31, 2013 and 2012 and for the Period from inception (May 17, 2011) through December 31, 2013
|
F-4 | |||
|
Statement of Changes in Stockholder’s Deficit for the Periods from inception (May 17, 2011) through December 31, 2013
|
F-5 | |||
|
Statements of Cash Flows for the Years ended December 31, 2013 and 2012 and for the Period from inception (May 17, 2011) through December 31, 2013
|
F-6 | |||
|
Notes to Financial Statements
|
F-7 | |||
F-1
 |
D. Brooks and Associates CPA’s, P.A.
Certified Public Accountants ● Valuation Analyst ● Advisors
|
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and
Stockholders of Apex 2, Inc.
We have audited the accompanying balance sheet of Apex 2, Inc. as of December 31, 2013, and the related statements of operations, stockholder’s deficit, and cash flows for the year then ended and the period from inception (May 17, 2011) through December 31, 2013. Apex 2, Inc.’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Apex 2, Inc. as of December 31, 2013, and the results of its operations and its cash flows for the year then ended and the period from inception (May 17, 2011) through December 31, 2013 in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company has incurred operating losses, has incurred negative cash flows from operations and has a working capital deficit. These and other factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plan regarding these matters is also described in Note 3 to the financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
D. Brooks and Associates CPA’s, P.A.
West Palm Beach, Florida
March 4, 2014
D. Brooks and Associates CPA’s, P.A. 8918 Marlamoor Lane, West Palm Beach, FL 33412 – (954) 592-2507
F-2
APEX 2, INC.
(A DEVELOPMENT STAGE COMPANY)BALANCE SHEETS
AS OF DECEMBER 31,
|
2013
|
2012
|
|||||||
|
ASSETS
|
||||||||
|
TOTAL ASSETS
|
$ | -- | $ | -- | ||||
|
LIABILITIES AND STOCKHOLDER’S DEFICIT
|
||||||||
|
Current Liabilities
|
||||||||
|
Accounts payable
|
$ | -- | $ | 1,250 | ||||
|
Due to related party
|
26,760 | 10,400 | ||||||
|
Total Current Liabilities
|
26,760 | 11,650 | ||||||
|
Commitments and contingencies
|
-- | -- | ||||||
|
Stockholder’s Deficit
|
||||||||
|
Preferred stock; $.0001 par value; 5,000,000 shares authorized; none issued and outstanding
|
-- | -- | ||||||
|
Common stock; $.0001 par value; 100,000,000 shares authorized; 10,000,000 shares issued and outstanding
|
1,000 | 1,000 | ||||||
|
Deficit accumulated during development stage
|
(27,760 | ) | (12,650 | ) | ||||
|
Total Stockholder’s Deficit
|
(26,760 | ) | (11.650 | ) | ||||
|
TOTAL LIABILITIES AND STOCKHOLDER’S DEFICIT
|
$ | -- | $ | -- | ||||
The footnotes are an integral part of the financial statements.
F-3
APEX 2, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
|
|
For The Year
Ended |
For The Year
Ended |
From May 17,
2011 (Inception) |
|||||||||
|
|
2013
|
2012
|
2013
|
|||||||||
|
|
|
|
||||||||||
|
EXPENSES
|
|
|
|
|||||||||
|
General and administrative
|
$ | 15,110 | $ | 9,650 | $ | 27,760 | ||||||
|
Total expenses
|
15,110 | 9,650 | 27,760 | |||||||||
|
NET LOSS
|
$ | (15,110 | ) | $ | (9,650 | ) | $ | (27,760 | ) | |||
|
BASIC AND DILUTED NET LOSS PER SHARE
|
$ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | |||
|
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING, BASIC AND DILUTED
|
10,000,000 | 10,000,000 | 10,000,000 | |||||||||
The footnotes are an integral part of the financial statements.
F-4
APEX 2, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDER’S DEFICIT
FROM MAY 17, 2011 ( INCEPTION) THROUGH DECEMBER 31, 2013
|
|
Common Stock
|
Deficit Accumulated
During theDevelopment
|
Total
Stockholder’s |
|||||||||||||
|
|
Shares
|
Amount
|
stage
|
Deficit
|
||||||||||||
|
|
|
|
|
|||||||||||||
|
|
|
|
|
|
||||||||||||
|
May 17, 2011 (inception)
|
10,000,000 | $ | 1,000 | $ | -- | $ | 1,000 | |||||||||
|
|
||||||||||||||||
|
Net loss
|
- | - | (3,000 | ) | (3,000 | ) | ||||||||||
|
Balance, December 31, 2011
|
10,000,000 | 1,000 | (3,000 | ) | (2,000 | ) | ||||||||||
|
Net loss
|
-- | -- | (9,650 | ) | (9,650 | ) | ||||||||||
|
Balance, December 31, 2012
|
10,000,000 | 1,000 | (12,650 | ) | (11,650 | ) | ||||||||||
|
Net loss
|
-- | -- | (15,110 | ) | ( 15,110 | ) | ||||||||||
|
Balance, December 31, 2013
|
10,000,000 | $ | 1,000 | $ | (27,760 | ) | $ | (26,760 | ) | |||||||
The footnotes are an integral part of the financial statements.
F-5
APEX 2, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOW
|
|
Year Ended
December 31, |
Year Ended
December 31, |
From May 17,
2011 (Inception) |
|||||||||
|
|
2013
|
2012
|
2013
|
|||||||||
|
|
|
|
||||||||||
|
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|||||||||
|
Net loss
|
$ | (15,110 | ) | $ | (9,650 | ) | $ | (27,760 | ) | |||
|
Adjustments to reconcile net loss to net cash
|
||||||||||||
|
used in operations:
|
||||||||||||
|
Stock based compensation
|
-- | -- | 1,000 | |||||||||
|
Changes in operating assets and liabilities:
|
||||||||||||
|
Accounts payable
|
(1,250 | ) | 1,250 | -- | ||||||||
|
Net cash used in operating activities
|
(16,360 | ) | (8,400 | ) | (26,760 | ) | ||||||
|
CASH FLOWS FROM FINANCING ACTIVITIES
|
||||||||||||
| Proceeds from borrowing, related party | 16,360 | 8,400 | 26,760 | |||||||||
|
Net cash provided by financing activities
|
16,360 | 8,400 | 26,760 | |||||||||
|
NET CHANGE IN CASH
|
-- | -- | -- | |||||||||
|
CASH - Beginning of period
|
-- | -- | - | |||||||||
|
CASH - End of period
|
$ | -- | $ | -- | $ | -- | ||||||
|
SUPPLEMENTAL CASH FLOW DISCLOSURES:
|
||||||||||||
|
Interest paid
|
$ | - | $ | - | $ | - | ||||||
|
Income taxes paid
|
$ | - | $ | - | $ | - | ||||||
The footnotes are an integral part of the financial statements.
F-6
APEX 2, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
NOTE 1: ORGANIZATION AND DESCRIPTION OF BUSINESS
Apex 2, Inc. (the “Company”) was incorporated under the laws of the State of Delaware on May 17, 2011 and has been inactive since inception. The Company intends to serve as a vehicle to effect an asset acquisition, merger, exchange of capital stock or other business combination with a domestic or foreign business.
On Oct 28, 2011, the sole officer and director, entered into a Share Purchase Agreement and sold 10,000,000 shares of the Company’s common stock to MAP Universal LLC. These shares represent 100% of the Company’s issued and outstanding common stock
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation - Development Stage Company
The Company has not earned any revenue from operations. Accordingly, the Company’s activities have been accounted for as those of a “Development Stage Company” as set forth in Financial Accounting Standards Board Statement ASC 915 Among the disclosures required by ASC 915 are that the Company’s financial statements be identified as those of a development stage company, and that the statements of operations, stockholders’ equity and cash flows disclose activity since the date of the Company’s inception.
Accounting Method
The Company’s financial statements are prepared using the accrual method of accounting. The Company has elected a fiscal year ending on December 31.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. In the opinion of management, all adjustments necessary in order to make the financial statements not misleading have been included. Actual results could differ from those estimates.
Cash and Cash Equivalents
The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.
Income Taxes
Income taxes are provided in accordance with Statement of Financial Accounting Standards No 740 (ASC 740), Accounting for Income Taxes. A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss carry forwards. Deferred tax expense (benefit) results from the net change during the year of deferred tax assets and liabilities. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion of all of the deferred tax assets will be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. There were no current or deferred Income tax expenses or benefits due to the Company not having any material operations since inception.
F-7
Basic and diluted net loss per share
Basic and diluted net loss per share calculations are calculated on the basis of the weighted average number of common shares outstanding during the period. They include the dilutive effect of common stock equivalents in years with net income. Basic and diluted net loss per share is the same due to the absence of common stock equivalents.
Impact of New Accounting Standards
The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company’s results of operations, financial position, or cash flow.
NOTE 3: GOING CONCERN
The Company’s financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern that contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company, as shown in the accompanying balance sheets, has no assets and an accumulated deficit of $27,760 as of December 31, 2013. The Company has not established any source of revenue to cover its operating costs. The Company will engage in very limited activities that must be satisfied in cash until a source of funding is secured. The Company will offer noncash consideration and seek equity lines as a means of financing its operations. If the Company is unable to obtain revenue producing contracts or financing or if the revenue or financing it does obtain is insufficient to cover any operating losses it may incur, it may substantially curtail or terminate its operations or seek other business opportunities through strategic alliances, acquisitions or other arrangements that may dilute the interests of existing stockholder.
NOTE 4: INCOME TAXES
The provision (benefit) for income taxes for the years ended December 31, 2013 and 2012 consists of the following:
|
Current
|
2013
|
2012
|
||||||
|
Federal
|
$ | - | $ | -- | ||||
|
State
|
- | |||||||
|
Deferred
|
||||||||
|
Federal
|
(5,137 | ) | (3,281 | ) | ||||
|
State
|
(498 | ) | (318 | ) | ||||
|
Change in valuation allowance
|
5,635 | 3,599 | ||||||
| - | - | |||||||
F-8
The Company’s income tax rate computed at the statutory federal rate of 34% differs from its effective tax rate primarily due to permanent items, state taxes and the change in the deferred tax asset valuation allowance.
|
Income tax at statutory rate
|
34.00 | |||
|
State income taxes, net of federal benefit
|
3.30 | |||
|
Change in valuation allowance
|
(37.30 | ) | ||
|
Total
|
0.00 | % |
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. In assessing the realizability of deferred tax assets, Management evaluates whether it is more likely than not that some portion or all of its deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based on Management’s evaluation, the net deferred tax asset was offset by a full valuation allowance in all periods presented. The Company’s deferred tax asset valuation allowance will be reversed if and when the Company generates sufficient taxable income in the future to utilize the tax benefits of the related deferred tax assets.
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and tax liabilities are as follows:
|
2013
|
2012
|
|||||||
|
Net operating loss
|
$ | 10,354 | $ | 4,719 | ||||
|
Gross deferred tax assets:
|
5,635 | 4,719 | ||||||
|
Less: valuation allowance
|
(10.354 | ) | (4,719 | ) | ||||
|
Net deferred tax assets
|
$ | - | $ | - | ||||
As of December 31, 2013 the Company had operating loss carry-forwards of approximately $27,760 available to offset future taxable income, expiring in 2033.
The Company’s tax years since May 17, 2011 (inception) through December 31, 2012 and the year ended December 31, 2013 remain subject to examination by Federal and state jurisdictions.
F-9
NOTE 5: RELATED PARTY TRANSACTIONS
During the period from May 17, 2011 (inception) through December 31, 2013 the Company’s officer and director performed services for the Company, the value of which was $1,000. In exchange the Company’s officer and director received 10,000,000 shares of common stock. The Company’ officer and director loaned $26,760 to the Company during the period from May 17, 2011 (inception) through December 31, 2013. There are no specific term and no interest on this advance.
During the years ended December 31, 2013 and 2012, the Company’s officer and director advanced the Company $16,360 and $8,400, respectively. The advance is non-interest bearing and due on demand. As of December 31, 2013 and 2012 the amount owed to the officer and director totaled $26,760 and $10,400, respectively.
NOTE 6: SHAREHOLDER’S EQUITY
Upon formation, the Board of Directors issued 10,000,000 shares of common stock for $1,000 in services to the founding shareholder of the Company.
F-10