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EXCEL - IDEA: XBRL DOCUMENT - ALLIANCE BIOENERGY PLUS, INC.Financial_Report.xls
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EX-32.1 - EX-32.1 - ALLIANCE BIOENERGY PLUS, INC.d31046_ex32-1.htm
EX-32.2 - EX-32.2 - ALLIANCE BIOENERGY PLUS, INC.d31046_ex32-2.htm
EX-31.2 - EX-31.2 - ALLIANCE BIOENERGY PLUS, INC.d31046_ex31-2.htm


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

FORM 10-K

Annual Report Pursuant to Section 13 or 15(D) of the Securities Exchange Act of 1934

for the fiscal year ended December 31, 2013

Transition Report Under Section 13 or 15(D) of the Securities Exchange Act of 1934

for the transition period from _______________ to _______________

Commission File Number:  333-181633

ALLIANCE MEDIA GROUP HOLDINGS, INC.
(Exact name of small Business Issuer as specified in its charter)

Nevada

45-4944960

(State or other jurisdiction of incorporation or

(IRS Employer Identification No.)

organization)

  

  

  

400 N. Congress Avenue, Suite 130

  

West Palm Beach, FL

33401

(Address of principal executive offices)

(Zip Code)

Issuer's telephone number, including area code: (888) 607-3555

n/a

Former address if changed since last report

Securities registered under Section 12(b) of the Exchange Act:   None

Securities registered under Section 12(g) of the Exchange Act:

Common Stock, par value $0.001 per share

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [ ] No [X].

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes [ ] No [X]

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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-K 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. [ ]




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.


 

 

 

 

 

 

 

Large Accelerated Filer o

 

Accelerated Filer o

 

Non-Accelerated Filer o
(Do not check if a smaller reporting company)

 

Smaller Reporting Company þ


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

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter (June 30, 2013)—No sale or bid data was available as of that date.


State the number of shares outstanding of the registrant's $.001 par value common stock as of the close of business on the latest practicable date (May 15, 2014):  33,279,748

Documents incorporated by reference: None.




TABLE OF CONTENTS

PART I

 

ITEM 1.

BUSINESS

 

ITEM 1A.

RISK FACTORS

 

ITEM 1B.

UNRESOLVED STAFF COMMENTS

 

ITEM 2.

PROPERTIES

 

ITEM 3.

LEGAL PROCEEDINGS

 

ITEM 4.

MINE SAFETY DISCLOSURES

 

 

PART II

 

ITEM 5.

MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

 

ITEM 6.

SELECTED FINANCIAL DATA

 

ITEM 7.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

 

ITEM 7A.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

ITEM 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

 

ITEM 9.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

 

ITEM 9A.

CONTROLS AND PROCEDURES

 

ITEM 9B.

OTHER INFORMATION

 

 

PART III

 

ITEM 10.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

 

 

ITEM 11.

EXECUTIVE COMPENSATION

 

ITEM 12.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

 

ITEM 13.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

 

ITEM 14

PRINCIPAL ACCOUNTANT FEES AND SERVICES

 

 

PART IV

 

ITEM 15.

EXHIBITS, FINANCIAL STATEMENT SCHEDULES

 

 

SIGNATURES

 




FORWARD LOOKING STATEMENTS


This Annual Report on Form 10-K (the “Report”), including ”Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 7 contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 regarding future events and the future results of Alliance Media Group Holdings, Inc. and its consolidated subsidiaries (the “Company”) that are based on management’s current expectations, estimates, projections and assumptions about the Company’s business. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “sees,” “estimates” and variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements due to numerous factors, including, but not limited to, those discussed in the “Risk Factors” section in Item 1A, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 7 and elsewhere in this Report as well as those discussed from time to time in the Company’s other Securities and Exchange Commission filings and reports. In addition, such statements could be affected by general industry and market conditions. Such forward-looking statements speak only as of the date of this Report or, in the case of any document incorporated by reference, the date of that document, and we do not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this Report. If we update or correct one or more forward-looking statements, investors and others should not conclude that we will make additional updates or corrections with respect to other forward-looking statements.


PART I

ITEM 1.

BUSINESS.

Background

 

Business Overview

 

At inception (March 28, 2012), Alliance Media Group Holdings, Inc. (the “Company”) was organized as a vehicle to engage in the commercial production, distribution and exploitation of Motion Pictures and other Entertainment products including but not limited to animation, television, live events, commercial retail and destination property’s as well as other entertainment related enterprises such as theme parks and theme restaurants and destinations.

The Company focuses on two industries – Entertainment and Renewable Energy. Through its wholly owned subsidiaries AMG Entertainment, LLC and AMG Renewables, LLC the Company has a strategy that includes mergers and acquisitions as well as start-up activities which are focused on development of an increasing revenue stream, secure market share and enhancement of shareholder value. Since the Company is currently in a development stage, there is no guarantee that this will ever be achieved.

AMG RENEWABLES, LLC

On December 26, 2013, AMG Renewables, LLC, a Florida limited liability company (“AMG Renewables”), a wholly-owned subsidiary of the Company, entered into an agreement to acquire the controlling interest (51%) in AMG Energy Group, LLC a Florida limited liability company (“AMG Energy”) from certain related parties for a consideration comprising $2,200,000 cash, payable upon the successful completion of the Company’s pending private offering, together with delivery of 7,266,000 shares of Company Common Stock. AMG Energy owns a fifty percent (50%) interest of Carbolosic Corporation, LLC, a Delaware limited liability company (“Carbolosic”), which holds an exclusive worldwide license to the University of Central Florida’s patented technology (U.S. Patent 8,062,428) known as “CTS™”. The CTS technology is a mechanical/chemical, dry process for converting cellulose material into sugar for use in the biofuels industry as well as other fine chemical manufacturing. On December 26, 2013, 7,000,000 shares of Company common stock were delivered to AMG Energy Solutions, LLC (a related party) and, as of May 15, 2014, the remaining 266,000 shares of Company common stock have yet to be delivered and have been accrued and are recorded as additional paid in capital and an accrued liability in the




Company’s balance sheet. As of May 15, 2014, the Company had paid $168,742 of the $2,200,000 cash payable on account of this transaction, and as of such date, the proceeds of the Company’s pending private offering have been insufficient to pay the remaining amount, which amount has been recorded on the books of the Company as a related party account payable.

The Company’s goal is to develop the CTS technology to a commercial scale and then seek to license the technology to prospective licensee’s. AMG Energy is working with Imerys Performance Minerals on the design, construction and implementation of a full scale pilot plant at Imerys’ south Georgia R&D facility. AMG Energy has also begun discussions with several ethanol producers, local municipalities and international governments for the licensing and construction of CTS plants both in the US and abroad.

AMG ENTERTAINMENT, LLC  

AMG Entertainment, LLC, a Florida limited liability company (“AMG Entertainment”), is a wholly owned subsidiary of the Company, created for the purpose of the commercial production, distribution and exploitation of motion pictures and other entertainment products including but not limited to animation, television, live events, recorded music, merchandising, commercial retail and destination properties, including but not limited to theme parks, theme restaurants, NASCAR and other sporting ventures.

AMG Entertainment has five wholly owned subsidiaries, AMG Live, LLC, a Florida limited liability company (“AMG Live”); AMG Television, Inc, a Florida Corporation (“AMG Television”); AMG Releasing, LLC, a Florida limited liability company (“AMG Releasing”); AMG Music, Inc., a Florida Corporation (“AMG Music”); and AMG Restaurant Operations, LLC, a Florida limited liability company (“AMG Restaurant”):

·

AMG Live has entered into negotiations with the City of Delray Beach, Florida for an exclusive, long-term contract to produce all live events (except Tennis) at the city’s 8,000 seat stadium facility.

 

·

AMG Television has entered into an agreement to acquire the partially completed American Idol style reality series World Star (formerly Recreating A Legend) for $792,000, comprising a $600,000 cash payment plus 1,600,000 shares of Company Common Stock and the completed documentary Making of a Saint: The Journey to Sainthood for $132,040, comprising a $100,000 cash payment plus 267,000 shares of Company Common Stock. Subsequently, on April 25, 2014, the Company notified the Seller that it was rescinding both transactions due to a failure to provide required items in order to exploit the projects and filed a lawsuit against the Seller seeking to rescind the Asset Purchase agreements and to seek the return of the Company stock which had been issued in connection with the transaction. In response, the Seller has alleged that it was the Company that breached the agreement. The Company denies this allegation. The litigation is in its early stages and the Company cannot predict whether a successful outcome will be achieved.


·

AMG Restaurant Operations has begun construction of its first theme restaurant The New York Sandwich Company in Ft. Lauderdale, Florida.


The Company believes that its management and consultants have significant experience in feature film production, distribution and promotions, including target-specific marketing efforts as well as in the bio-fuels, renewable energy and chemical manufacturing industries.

Description of the Company’s Securities

The Company is currently authorized to issue 100,000,000 Shares of Common Stock par value $0.001 and 10,000,000 shares of Preferred Stock par value $0.001. Each share of Company Common Stock is entitled to one (1) vote per share.




Employees

As of December 31, 2013, the Company had two full-time employees.

ITEM 1A. RISK FACTORS

Not required as the Company is a “smaller reporting company”.


ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES.

Offices


The Company maintains its designated office at 400 N Congress Avenue, Suite 130, West Palm Beach Florida 33401. The Company’s telephone number is 888-607-3555. The Company has leased its offices (comprising approximately 4,000 rentable square feet) pursuant to a lease for a period of forty (40) months from April 6, 2012 through August 5, 2015. The Lease Commencement Date was August 6, 2012. Annual rent commenced at approximately $46,250 per annum and increases on a year-to-year basis by three percent (3%) over the Base Year. In addition, the Company is obligated to pay an amount equal to 3.76% of the operating expenses of the building together with sales tax on all amounts.


ITEM 3. LEGAL PROCEEDINGS

We are subject from time to time to litigation, claims and suits arising in the ordinary course of business. As of May 15, 2014, the only material litigation, claim or suit whose outcome could have a material effect on our financial statements is as follows:


On April 25, 2014, the Company notified the Seller that it was rescinding its agreements to acquire the partially completed American Idol style reality series World Star (formerly Recreating A Legend) and the completed documentary Making of a Saint: The Journey to Sainthood and filed a lawsuit against the Seller seeking to rescind the Asset Purchase agreements and to seek the return of the Company stock which had been issued in connection with the transactions and for financial damages. In response, the Seller has alleged that it was the Company that breached the agreement. The Company denies this allegation. The resolution of this matter is in its early stages and the Company cannot predict whether a successful outcome will be achieved.


ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.


PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY; RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES

Market for Registrant’s Common Equity

The Company became subject to Securities Exchange Act Reporting Requirements in October 2012. The symbol "ALLM" is assigned for our securities. Our common stock commenced trading on the OTCBB on February 13, 2014.




The following table shows the high and low prices of our common shares on the OTC Bulletin Board for each quarter since our common stock began to trade on the OTC Bulletin Board in February 2014. The following quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions:

Period

High

Low

February 13, 2014-March 31, 2014

$2.70

$2.00

 

Options and Warrants

On November 19, 2013, the Company entered into a Common Stock Purchase Warrant agreement with Constellation Asset Advisors, Inc. whereby it issued a Warrant to purchase 2,000,000 shares of Common Stock for a period of five (5) years at an exercise price of $1.00 per share. The Warrant was issued in partial consideration for a Consulting Agreement. The Company valued these warrants using the Black Scholes model resulting in a value of $902,772. Other than the foregoing agreement, none of the Company’s shares of Common Stock are subject to outstanding options or warrants. 

Notes Payable

At December 31, 2013, the Company had short-term notes payable of $111,800 together with Convertible Debentures Payable of $70,000 and accrued interest payable on these obligations of $15,788. $50,000 of the  principal amount and $7,863 accrued interest of the Convertible Debentures was converted to 458,333 shares of Common Stock on January 31, 2014 and the remaining $20,000 of the Convertible Debentures was re-paid on May 1, 2014 and the accrued interest will be converted to shares of company Common Stock.

 

Holders


As of May 15, 2014 there were 33,279,748 shares of common stock outstanding and approximately 181 stockholders of record


Transfer Agent and Registrar


Our transfer agent is VStock Transfer, LLC, 77 Spruce Street, Suite 201, Cedarhurst, NY 11516, Phone:  212-828-8436.


Dividend Policy


We have never paid any cash dividends on our Common Stock and do not anticipate paying any cash dividends on our Common Stock in the foreseeable future. We intend to retain future earnings to fund ongoing operations and future capital requirements of our business. Any future determination to pay cash dividends will be at the discretion of the Board of Directors and will be dependent upon our financial condition, results of operations, capital requirements and such other factors as the Board of Directors deems relevant.

Securities Authorized for Issuance Under Equity Compensation Plans


There are no outstanding options or warrants to purchase shares of our common stock under any equity compensation plans. As a result, we did not have any options, warrants or rights outstanding as of December 31, 2013.




Plan Category

 

Number of 

Securities to

be issued upon 

exercise

of outstanding 

options,

warrants and 

rights

 

 

Weighted-average

exercise price 

of outstanding 

options,
warrants and

 rights

 

 

Number of 

securities

remaining 

available for

future issuance 

under

equity 

compensation

plans (excluding

securities 

reflected in

column (a)

 

 

 

(a)

 

 

(b)

 

 

(c)

 

Equity compensation plans approved by security holders

 

 

- 0 -

 

 

 

- 0 -

 

 

 

- 0 -

 

Equity compensation plans not approved by security holders

 

 

- 0 -

 

 

 

- 0 -

 

 

 

- 0 -

 

Total

 

 

- 0 -

 

 

 

- 0 -

 

 

 

- 0 -

 



Recent Sales of Unregistered Securities  


Below is a list of securities sold by us from January 1, 2013 through May 15, 2014 which were not registered under the Securities Act.


Name of Purchaser

Date of Sale

Title of

Amount of Securities

Consideration

Security

Sold

Roy Sciacca

9/12/13

Common Stock

610,215

Acquisition

Lisa Colletti

9/12/13

Common Stock

550,000

Acquisition

Ted Chasanoff

9/12/13

Common Stock

146,808

Acquisition

Jeffrey Sutton

9/12/13

Common Stock

159,255

Acquisition

Mark Garten

9/12/13

Common Stock

46,675

Acquisition

Stephen Schaefer

9/12/13

Common Stock

22,031

Acquisition

Gregg Spiegel

9/12/13

Common Stock

21,782

Acquisition

Paul J. Deleo

9/12/13

Common Stock

7,001

Acquisition

Carl Stephens Jr.

9/12/13

Common Stock

7,001

Acquisition

Bernard Jaffe/Rosalind Jaffe

9/12/13

Common Stock

4,668

Acquisition

Kenneth Steckler

9/12/13

Common Stock

37,652

Acquisition

John Famularo

9/12/13

Common Stock

56,010

Acquisition

Maria J. Barba

9/12/13

Common Stock

4,201

Acquisition

Robert Schmidbauer

9/12/13

Common Stock

7,001

Acquisition

Concetta Cacciabaudo

9/12/13

Common Stock

2,334

Acquisition

Carol/Charles A. Otto

9/12/13

Common Stock

24,271

Acquisition

John S. Gross/Barbara Gross

9/12/13

Common Stock

28,005

Acquisition

Anthony Deleo

9/12/13

Common Stock

56,010

Acquisition

Thomas Rodriguez

9/12/13

Common Stock

9,335

Acquisition

Neil Austin

9/12/13

Common Stock

9,335

Acquisition

Frank Licari

9/12/13

Common Stock

9,335

Acquisition

Certified Medical Consultants, Inc.

9/12/13

Common Stock

28,005

Acquisition

Diane Bauman/Christopher Bauman

9/12/13

Common Stock

1,400

Acquisition

Jason Silverman

9/12/13

Common Stock

18,670

Acquisition

Jena Waldron

9/12/13

Common Stock

83,333

Debenture Conversion

Robert Tocci

10/1/13

Common Stock

100,000

Professional services




Ted R. Chasanoff

10/1/13

Common Stock

100,000

Professional services

Ken M. Hickman

10/1/13

Common Stock

10,000

Professional services

Marias Investment Holdings

11/1/13

Common Stock

140,000

Purchase @ $0.75 per share

David Kernall

11/1/13

Common Stock

14,666

Purchase @ $0.75 per share

Dawn A Goughnour

11/3/13

Common Stock

10,000

Purchase @ $0.75 per share

Cari Lyon

11/12/13

Common Stock

10,000

Purchase @ $0.75 per share

James Alex Davidson

11/14/13

Common Stock

20,000

Purchase @ $0.75 per share

Doug Fuerring

12/12/13

Common Stock

200,000

Professional services

Devin Chasanoff

12/12/13

Common Stock

7,500

Professional services

Roy A Sciacca

12/12/13

Common Stock

225,000

Professional services

Ken Hickman

12/12/13

Common Stock

5,667

Professional services

Constellation Asset Advisors

12/12/13

Common Stock

967,810

Professional services

John Michael Stubbins

12/12/13

Common Stock

9,500

Professional services

Lisa Collettti

12/12/13

Common Stock

500,000

Professional services

Sharon Tobi Shulman

12/12/13

Common Stock

37,500

Professional services

Larry Offsey

12/12/13

Common Stock

37,500

Professional services

Roy Sciacca

12/13/13

Common Stock

2,000,000

Professional services

AMG Energy Solutions, LLC

12/26/13

Common Stock

7,000,000

Asset Purchase

R. Arthur Dunkle

1/6/14

Common Stock

40,000

Purchase @ $0.75 per share

Heidi B.Creekmur

1/6/14

Common Stock

15,000

Purchase @ $0.75 per share

David M. Nelms

1/6/14

Common Stock

13,334

Purchase @ $0.75 per share

Kaith & Elaine Ragon

1/6/14

Common Stock

13,334

Purchase @ $0.75 per share

Nadia Marrese

1/6/14

Common Stock

66,667

Purchase @ $0.75 per share

John Bittel

1/6/14

Common Stock

33,334

Purchase @ $0.75 per share

Robert Diener

1/9/14

Common Stock

(100,000)

Cancel prior issuance

Joseph McNaney

2/4/14

Common Stock

1,000,000

Professional services

Ted & Cari Lyon

2/5/14

Common Stock

10,000

Purchase @ $0.75 per share

Benjamin Ellis McCurdy

2/5/14

Common Stock

10,000

Purchase @ $0.75 per share

Vince Desai

2/5/14

Common Stock

12,000

Purchase @ $0.75 per share

Robert Bromley Davis

2/5/14

Common Stock

21,000

Purchase @ $0.75 per share

David Murg

2/5/14

Common Stock

10,000

Purchase @ $0.75 per share

Richard & Melody Spano

2/5/14

Common Stock

33,334

Purchase @ $0.75 per share

Andrew Bromley Davis

2/5/14

Common Stock

10,500

Purchase @ $0.75 per share

Edward Thomas Bromley Davis

2/5/14

Common Stock

10,500

Purchase @ $0.75 per share

Diana Carolyn Davis

2/5/14

Common Stock

10,500

Purchase @ $0.75 per share

Gary E. Miano

2/5/14

Common Stock

1,334

Purchase @ $0.75 per share

John T. Helvie

2/5/14

Common Stock

1,334

Purchase @ $0.75 per share

Nadia Marrese

2/5/14

Common Stock

13,667

Purchase @ $0.73 per share

Marcia G. Malits

2/5/14

Common Stock

4,000

Purchase @ $0.75 per share

Gabriel Miller

2/5/14

Common Stock

6,672

Purchase @ $0.75 per share

Robert & Sandra Andrys

2/5/14

Common Stock

6,700

Purchase @ $0.75 per share

Lance G. Hoppen

2/5/14

Common Stock

6,700

Purchase @ $0.75 per share

Michael G. Geisler

2/5/14

Common Stock

13,334

Purchase @ $0.75 per share




Dawn A Goughnour

2/5/14

Common Stock

15,000

Purchase @ $0.75 per share

Wayne Evan Tullos

2/6/14

Common Stock

458,333

Debenture Conversion

David M. Rittenhouse

2/26/14

Common Stock

1,334

Purchase @ $0.75 per share

Samuel Spector

2/26/14

Common Stock

2,667

Purchase @ $0.75 per share

Kaith Ragon

2/26/14

Common Stock

13,334

Purchase @ $0.75 per share

Danny Bochel

2/26/14

Common Stock

1,334

Purchase @ $0.75 per share

Frances Frazier

2/26/14

Common Stock

1,334

Purchase @ $0.75 per share

Scott & Elizabeth Sheppard

2/26/14

Common Stock

10,000

Purchase @ $0.75 per share

Thomas Camerlengo et. al.

2/26/14

Common Stock

3,334

Purchase @ $0.75 per share

Jeffrey Allen Mills

2/26/14

Common Stock

8,000

Purchase @ $0.75 per share

Ronald E. Rivers

2/26/14

Common Stock

4,667

Purchase @ $0.75 per share

Nadia Marrese

2/26/14

Common Stock

53,334

Purchase @ $0.75 per share

Alfred & Linda Cardamone

2/26/14

Common Stock

13,334

Purchase @ $0.75 per share

Cooper Alexander Stetson

2/26/14

Common Stock

8,000

Professional services

Dan Moss Jr.

2/26/14

Common Stock

10,000

Purchase @ $0.75 per share

Gabrielle Rusignuolo

2/26/14

Common Stock

11,000

Purchase @ $0.75 per share

Dennis & Susan George

2/26/14

Common Stock

10,000

Purchase @ $0.75 per share

Darrell Slaughter

2/26/14

Common Stock

1,334

Purchase @ $0.75 per share

Hugh F. Quinn

2/26/14

Common Stock

10,000

Purchase @ $0.75 per share

Paul Meicka

2/26/14

Common Stock

10,000

Purchase @ $0.75 per share

Brian D. Hughes

2/26/14

Common Stock

10,000

Purchase @ $0.75 per share

John J. & Darla Melkun

2/26/14

Common Stock

13,333

Purchase @ $0.75 per share

Roy Sciacca

3/17/14

Common Stock

(2,000,000)

Cancel prior issuance

Susan Kubiak

4/1/14

Common Stock

10,000

Purchase @ $0.75 per share

Gabrielle Rusignuolo

4/1/14

Common Stock

11,000

Purchase @ $0.75 per share

Michael Sacco

4/1/14

Common Stock

10,000

Purchase @ $0.75 per share

Gregg Spiegel

4/1/14

Common Stock

66,668

Purchase @ $0.75 per share

Jay Silver

4/1/14

Common Stock

66,668

Purchase @ $0.75 per share

Jerry & Pamela Mercer

4/1/14

Common Stock

4,000

Purchase @ $0.75 per share

Nadia Marrese

4/1/14

Common Stock

13,334

Purchase @ $0.75 per share

Robert Bromley Davis

4/1/14

Common Stock

66,700

Purchase @ $0.75 per share

Nadia Marrese

4/1/14

Common Stock

13,334

Purchase @ $0.75 per share

Jerry & Pamela Mercer

4/1/14

Common Stock

4,000

Purchase @ $0.75 per share

Robert A. Twitty

4/1/14

Common Stock

26,668

Purchase @ $0.75 per share

Wayne Evan Tullos

4/1/14

Common Stock

100,000

Professional services

Ken Hickman

4/1/14

Common Stock

13,984

Professional services

Howard Ash

4/1/14

Common Stock

100,000

Professional services

 

 

 

 

 

The securities issued in the above mentioned transactions were issued in connection with private placements exempt from the registration requirements of Section 5 of the Securities Act of 1933, as amended, pursuant to the terms of Section 4(2) of that Act and Rule 506 of Regulation D.




Purchases of Equity Securities

The Company has never purchased nor does it own any equity securities of any other issuer.

ITEM 6.

    SELECTED FINANCIAL DATA

As a smaller reporting company we are not required to provide the information required by this Item.

 

ITEM 7.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATION

The following discussion should be read in conjunction with our unaudited financial statements and the notes thereto.


Forward-Looking Statements


This annual report contains forward-looking statements and information relating to us that 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 report, the words "believe," "anticipate," "expect," "estimate," “intend”, “plan” and similar expressions, as they relate to us or our management, are intended to identify forward-looking statements. These statements reflect management's current view of us concerning future events and are subject to certain risks, uncertainties and assumptions, including among many others: a general economic downturn; a downturn in the securities markets; federal or state laws or regulations having an adverse effect on proposed transactions that we desire to effect; Securities and Exchange Commission regulations which affect trading in the securities of "penny stocks"; and other risks and uncertainties. Should any of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this report as anticipated, estimated or expected. The accompanying information contained in this registration statement, including, without limitation, the information set forth under the heading “Management’s Discussion and Analysis and Plan of Operation -- Risk Factors" identifies important additional factors that could materially adversely affect actual results and performance. You are urged to carefully consider these factors. All forward-looking statements attributable to us are expressly qualified in their entirety by the foregoing cautionary statement.


Business Overview

 

At inception (March 28, 2012), Alliance Media Group Holdings, Inc. (the “Company”) was organized as a vehicle to engage in the commercial production, distribution and exploitation of Motion Pictures and other Entertainment products including but not limited to animation, television, live events, commercial retail and destination property’s as well as other entertainment related enterprises such as theme parks and theme restaurants and destinations.

Plan of Operation

The Company focuses on two industries – Entertainment and Renewable Energy. Through its wholly owned subsidiaries AMG Entertainment, LLC and AMG Renewables, LLC the Company has a strategy that includes mergers and acquisitions as well as start-up activities which are focused on development of an increasing revenue stream, secure market share and enhancement of shareholder value. Since the Company is currently in a development stage, there is no guarantee that this will ever be achieved.

AMG RENEWABLES, LLC

On December 26, 2013, AMG Renewables, LLC, a Florida limited liability company (“AMG Renewables”), a wholly-owned subsidiary of the Company, entered into an agreement to acquire the controlling interest (51%) in AMG Energy Group, LLC a Florida limited liability company (“AMG Energy”) from certain related parties for a consideration comprising $2,200,000 cash, payable upon the successful completion of the Company’s pending private offering, together with delivery of 7,266,000 shares of Company Common Stock. In connection with the




transaction, an amount which the Company owed to AMG Energy ($190,177) for various loans and consulting fees was eliminated in the acquisition.

AMG Energy owns a fifty percent (50%) interest of Carbolosic Corporation, LLC, a Delaware limited liability company (“Carbolosic”), which holds an exclusive worldwide license to the University of Central Florida’s patented technology (U.S. Patent 8,062,428) known as “CTS™”. The CTS technology is a mechanical/chemical, dry process for converting cellulose material into sugar for use in the biofuels industry as well as other fine chemical manufacturing. On December 26, 2013, 7,000,000 shares of Company common stock were delivered to AMG Energy Solutions, LLC (a related party) and, as of May 15, 2014, the remaining 266,000 shares of Company common stock have yet to be delivered and have been accrued and are recorded as additional paid in capital and an accrued liability in the Company’s balance sheet. As of May 15, 2014, the Company had paid $168,742 of the $2,200,000 cash payable on account of this transaction, and as of such date, the proceeds of the Company’s pending private offering have been insufficient to pay the remaining amount, which amount has been recorded on the books of the Company as a related party account payable.

The Company’s goal is to develop the CTS technology to a commercial scale and then seek to license the technology to prospective licensee’s. AMG Energy is working with Imerys Performance Minerals on the design, construction and implementation of a full scale pilot plant at Imerys’ south Georgia R&D facility. AMG Energy has also begun discussions with several ethanol producers, local municipalities and international governments for the licensing and construction of CTS plants both in the US and abroad.

AMG ENTERTAINMENT, LLC  

AMG Entertainment, LLC, a Florida limited liability company (“AMG Entertainment”), is a wholly owned subsidiary of the Company, created for the purpose of the commercial production, distribution and exploitation of motion pictures and other entertainment products including but not limited to animation, television, live events, recorded music, merchandising, commercial retail and destination properties, including but not limited to theme parks, theme restaurants, NASCAR and other sporting ventures.

AMG Entertainment has five wholly owned subsidiaries, AMG Live, LLC, a Florida limited liability company (“AMG Live”); AMG Television, Inc, a Florida Corporation (“AMG Television”); AMG Releasing, LLC, a Florida limited liability company (“AMG Releasing”); AMG Music, Inc., a Florida Corporation (“AMG Music”); and AMG Restaurant Operations, LLC, a Florida limited liability company (“AMG Restaurant”):

·

AMG Live has entered into negotiations with the City of Delray Beach, Florida for an exclusive, long-term contract to produce all live events (except Tennis) at the city’s 8,000 seat stadium facility.

 

·

AMG Television has entered into an agreement to acquire the partially completed American Idol style reality series World Star (formerly Recreating A Legend) for $792,000, comprising a $600,000 cash payment plus 1,600,000 shares of Company Common Stock and the completed documentary Making of a Saint: The Journey to Sainthood for $132,040, comprising a $100,000 cash payment plus 267,000 shares of Company Common Stock. Subsequently, on April 25, 2014, the Company notified the Seller that it was rescinding both transactions due to a failure to provide required items in order to exploit the projects and filed a lawsuit against the Seller seeking to rescind the Asset Purchase agreements and to seek the return of the Company stock which had been issued in connection with the transaction. In response, the Seller has alleged that it was the Company that breached the agreement. The Company denies this allegation. The litigation is in its early stages and the Company cannot predict whether a successful outcome will be achieved.


·

AMG Restaurant Operations has begun construction of its first theme restaurant The New York Sandwich Company in Ft. Lauderdale, Florida.




The Company believes that its management and consultants have significant experience in feature film production, distribution and promotions, including target-specific marketing efforts as well as in the bio-fuels, renewable energy and chemical manufacturing industries.


Capital Formation


On April 2, 2012, the Registrant sold an aggregate of 15,000,000 shares of Company Common Stock to its founders, Daniel de Liege (5,000,000 shares), Mark W. Koch (5,000,000 shares) and Johan Sturm (5,000,000 shares) for an aggregate investment of $15,000. Payment for these shares was booked as a stock subscription receivable.


On April 9, 2012, the Registrant sold an aggregate of 400,000 shares of Company Common Stock to four of the Company’s newly appointed directors for an aggregate investment of $4,000.00. Payment for these shares was booked as a stock subscription receivable.


Also on April 9, 2012, the Registrant sold an aggregate of 865,000 shares of Company Common stock to ten (10) consultants who had provided services in connection with the conceptualization of the Company and the development of the Company’s Business Plan. The shares were valued at $0.01 per shares and the Company recognized an aggregate expense of $8,650 on account of such share issuances. There were no written agreements with any of the consultants.


Also on April 9, 2012, the Registrant sold an aggregate of 2,000,000 shares of Company Common stock to three (3) persons who had been instrumental in the development of the concepts behind the Company’s Business Plan and who continue to be critical to the implementation of the same. The shares were valued at $0.01 per shares and the Company recognized an aggregate expense of $20,000 on account of such share issuances.


On April 30, 2012, the Company completed a private offering of 1,000,000 shares to 29 investors at $0.01 per share for an aggregate investment of $10,000.


On May 4, 2012, the Company sold an aggregate of 130,000 shares of Company Common stock to two (2) consultants who had provided services in connection with the conceptualization of the Company and the development of the Company’s Business Plan. The shares were valued at $0.01 per shares and the Company recognized an aggregate expense of $1,300 on account of such share issuances.


On July 6, 2012, the Company issued a Convertible Debenture in the face amount of $50,000 to W. Evan Tullos. The Debenture indebtedness was due and payable on July 1, 2013 and bore interest at a rate of ten percent (10%) per annum, payable at maturity. The face amount of the Convertible Debentures was converted to 458,333 shares of Common Stock on January 31, 2014. and the remaining $20,000 of the Convertible Debentures was re-paid on May 1, 2014. The company assesses the value of the beneficial conversion feature of its convertible debt by determining the intrinsic value of such conversion, under ASC 470, at the time of issuance. At the time of issuance of the convertible debt instrument set out above, the fair value of the stock was either the same or less than the conversion price, and so there was no value attributable to any beneficial conversion feature.


On July 31, 2012, the Company issued a Convertible Debenture in the face amount of $30,000 to Jena Waldron. The Debenture indebtedness was due and payable on July 31, 2013 and bore interest at a rate of ten percent (10%) per annum, payable at maturity. $10,000 of the face amount was converted to 83,333 shares of Common Stock in September 2013 and the remaining $20,000 was repaid in April 2014. The company assesses the value of the beneficial conversion feature of its convertible debt by determining the intrinsic value of such conversion, under ASC 470, at the time of issuance. At the time of issuance of the convertible debt instrument set out above, the fair value of the stock was either the same or less than the conversion price, and so there was no value attributable to any beneficial conversion feature.


During the fiscal year ended December 31, 2013, the Company issued an aggregate of 4,300,477 shares of its common stock for services valued at $2,361,198. On March 17, 2014, a consulting agreement entered into in 2013 was terminated and 2,000,000 shares of common stock (valued at $1,500,000) which were issued in 2013 to the consultant in connection with that agreement were returned to the Company for cancellation. The Company has no residual liability on account of the consulting contract. The Company recorded $1,500,000 as a prepaid expense attributable to the stock issuance in 2013 and will record $1,500,000 as an offset to this prepaid expense on account of the share cancellation in the quarter ending March 31, 2014.


During the fiscal year ended December 31, 2013, the Company issued an aggregate of 83,333 shares of its common stock on account of the conversion of certain Debentures with a face amount of $10,000.


During the fiscal year ended December 31, 2013, the Company issued an aggregate of 8,867,000 shares of its common stock as partial consideration for certain acquisitions valued at $5,474,040.


On November 19, 2013, the Company entered into a Common Stock Purchase Warrant agreement with Constellation Asset Advisors, Inc. whereby it issued a Warrant to purchase 2,000,000 shares of Common Stock for a period of five (5) years at an exercise price of $1.00 per share. The Warrant was issued in partial consideration for a Consulting Agreement. The Company valued these warrants using the Black Scholes model resulting in a value of $902,772.


In November 2013, the Company commenced an offering of up to 12,000,000 shares of Common Stock at a price of $0.75 per Share (the “Offering”). Through May 1, 2014, the Company had sold 1,053,621 shares of




Common Stock through the Offering to approximately sixty (60) investors for aggregate proceeds of $789,956. The Offering is ongoing.


Going Concern


We have engaged primarily in development stage activities since inception through December 31, 2013. At December 31, 2013 we had $60,409 in cash and $1,539,142 in prepaid expenses and total liabilities of $3,508,850. The Company expects to incur significant liabilities in connection with its continued start-up activities, including the cost associated with securities law compliance, which are estimated to exceed $50,000 per annum at a minimum. As a result, the report of our independent registered public accounting firm on our financial statements for the period ended December 31, 2013 contains an explanatory paragraph regarding our ability to continue as a going concern based upon recurring operating losses and our need to obtain additional financing to sustain operations. Our ability to continue as a going concern is dependent upon our ability to obtain the necessary financing to meet our obligations and repay our liabilities when they become due and to generate sufficient revenues from our operations to pay our operating expenses. There are no assurances that we will continue as a going concern.


Results of Operations


Comparison of the year ended December 31, 2013 to December 31, 2012 

 

For the year ended December 31, 2013 our net loss increased by $2,199,503 to $2,304,513 from $105,010 for the year ended December 31, 2012. The increased loss can be principally attributed primarily to the following:


·

$1,996,844 consulting fees

·

$45,000 Management compensation

·

$5,899 Depreciation expense

 

We recognized no revenues in either period.


In the year ended December 31, 2013, our general and administrative expenses increased by $2,191,172 to $2,292,486 from $101,314 in the year ended December 31, 2012.


Depreciation and Amortization expense increased in the year ended December 31, 2013 to $8,955 from $-0- for the year ended December 31, 2012.

 

Interest expense increased in the year ended December 31, 2013 by $8,331 to $12,027 from $3,696 in the year ended December 31, 2012. The increase was the result of increased borrowings. 

 

Liquidity and Capital Resources

 

Liquidity

 

As of December 31, 2013 we had $60,409 in cash and an accumulated deficit of approximately $2,409,523. Total Stockholders’ Equity at December 31, 2013 was $6,543,333. Total debt, including advances, the amount payable on account of an acquisition and other notes payable at December 31, 2013, together with interest payable thereon, was $3,508,850, a change of $3,423,681 from $85,169 at December 31, 2012. Our operating activities provided $423,095 in cash for the year ended December 31, 2013. Our investing activities used $784,491.


Capital Resources


At this time, we have very limited liquidity and capital resources. To continue funding the Company’s operations, we will clearly require additional funding for ongoing operations and to finance such projects we may identify.




There is no guarantee that we will be able to raise any additional capital and have no current arrangements for any such financing.


The inability to obtain this funding either in the near term and/or longer term will materially affect the ability of the Company to implement its business plan of operations and jeopardize the viability of the Company. In that case, the Company may need to suspend its operations and reevaluate and revise its plan of operations


Critical Accounting Policies


Basis of Presentation


The accompanying consolidated financial statements of the Company were prepared in accordance with generally accepted accounting principles in the U.S. (“U.S. GAAP”) and include the assets, liabilities, revenues and expenses of the Company’s majority-owned subsidiaries over which the Company exercises control. Intercompany transactions and balances were eliminated in consolidation.


Principles of Consolidation


Our consolidated financial statements include the accounts of the Company and its subsidiaries, after elimination of intercompany accounts and transactions. Investments in business entities in which the Company lacks control but has the ability to exercise significant influence over operating and financial policies are accounted for using the equity method. Our proportionate share of net income or loss of the entity is recorded in Equity in net earnings of investee companies in the Consolidated Statements of Earnings.


Use of Estimates


The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the dates presented and reported amounts of revenues and expenses during the reporting periods presented. Significant estimates inherent in the preparation of the accompanying Consolidated Financial Statements include estimates of impairment assessment of identifiable intangible assets and valuation allowance for deferred tax assets. Estimates are based on past experience and other considerations reasonable under the circumstances. Actual results may differ from these estimates.


Stock Compensation


The Company recognizes the cost of all share-based payments under the relevant authoritative accounting guidance. Share-based payments include any remuneration paid by the Company in shares of the Company’s common stock or financial instruments that grant the recipient the right to acquire shares of the Company’s common stock. For share-based payments to employees, which consist only of awards made under the stock option plan described below, the Company accounts for the payments in accordance with the provisions of ASC Topic 718, “Stock Compensation” (formerly referred to as SFAS No. 123(R)). Share-based payments to consultants, service providers and other non-employees are accounted for under in accordance with ASC Topic 718, ASC Topic 505, “Equity Payments to Non-Employees” or other applicable authoritative guidance


Accounting for Films and Television Programs.


We capitalize costs of production and acquisition, including financing costs and production overhead, to investment in films and television programs. These costs for an individual film or television program are amortized and participation and residual costs are accrued to direct operating expenses in the proportion that current year’s revenues bear to management’s estimates of the ultimate revenue at the beginning of the year expected to be recognized from exploitation, exhibition or sale of such film or television program over a period not to exceed ten years from the date of initial release. For previously released film or television programs acquired as part of a library, ultimate revenue includes estimates over a period not to exceed 20 years from the date of acquisition.




Due to the inherent uncertainties involved in making such estimates of ultimate revenues and expenses, these estimates have differed in the past from actual results and are likely to differ to some extent in the future from actual results. In addition, in the normal course of our business, some films and titles are more successful than anticipated and some are less successful than anticipated. Our management regularly reviews and revises when necessary its ultimate revenue and cost estimates, which may result in a change in the rate of amortization of film costs and participations and residuals and/or write-down of all or a portion of the unamortized costs of the film or television program to its estimated fair value. Our management estimates the ultimate revenue based on experience with similar titles or title genre, the general public appeal of the cast, actual performance (when available) at the box office or in markets currently being exploited, and other factors such as the quality and acceptance of motion pictures or programs that our competitors release into the marketplace at or near the same time, critical reviews, general economic conditions and other tangible and intangible factors, many of which we do not control and which may change.


An increase in the estimate of ultimate revenue will generally result in a lower amortization rate and, therefore, less film and television program amortization expense, while a decrease in the estimate of ultimate revenue will generally result in a higher amortization rate and, therefore, higher film and television program amortization expense, and also periodically results in an impairment requiring a write-down of the film cost to the title’s fair value. These write-downs are included in amortization expense within direct operating expenses in our consolidated statements of operations. Investment in films and television programs is stated at the lower of amortized cost or estimated fair value. The valuation of investment in films and television programs is reviewed on a title-by-title basis, when an event or change in circumstances indicates that the fair value of a film or television program is less than its unamortized cost. In determining the fair value of its films and television programs, we employ a discounted cash flows ("DCF") methodology with assumptions for cash flows. Key inputs employed in the DCF methodology include estimates of a film's ultimate revenue and costs as well as a discount rate. The discount rate utilized in the DCF analysis is based on our weighted average cost of capital plus a risk premium representing the risk associated with producing a particular film or television program. The fair value of any film costs associated with a film or television program that we plan to abandon is zero. As the primary determination of fair value is determined using a DCF model, the resulting fair value is considered a Level 3 measurement (as defined in Note 11 to our audited consolidated financial statements). Additional amortization is recorded in the amount by which the unamortized costs exceed the estimated fair value of the film or television program. Estimates of future revenue involve measurement uncertainty and it is therefore possible that reductions in the carrying value of investment in films and television programs may be required as a consequence of changes in our future revenue estimates. As of December 1, 2013, the Company does not have any revenue generating films or television programs.


Convertible Instruments 


The Company evaluates and account for conversion options embedded in convertible instruments in accordance with ASC 815 “Derivatives and Hedging Activities”.

 

Applicable GAAP requires companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments according to certain criteria. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under other GAAP with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument.

 

The Company accounts for convertible instruments (when we have determined that the embedded conversion options should not be bifurcated from their host instruments) as follows: The Company records when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their stated date of redemption.




Recent Accounting Pronouncements


From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board or other standard setting bodies that may have an impact on the Company’s accounting and reporting. The Company believes that such recently issued accounting pronouncements and other authoritative guidance for which the effective date is in the future either will not have an impact on its accounting or reporting or that such impact will not be material to its financial position, results of operations, and cash flows when implemented.


Off-Balance Sheet Arrangements


We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.


Seasonality

Our operating results are not affected by seasonality.

Inflation

Our business and operating results are not affected in any material way by inflation.

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 information required by this Item.


ITEM 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Set forth below are the audited financial statements for the Company for the periods ended December 31, 2013 and 2012, and the report thereon of Paritz & Co., P.A.




Index to Financial Statements Page

 

  

Page

 

Report of Independent Registered Public Accounting Firm

F-2

  

  

Consolidated Balance Sheets as of December 31, 2013 and 2012

F-4

  

  

Consolidated Statements of Operations for the year ended December 31, 2013 and the period from inception (March 28, 2012) through December 31, 2012 and the period from inception (march 28, 2012) through December 31, 2013

F-5

  

  

Consolidated Statements of Changes in Stockholders’ Equity for the period from inception (March 28, 2012) through December 31, 2013

F-6

  

  

Consolidated Statements of Cash Flows for the year ended December 31, 2013 and the period from inception (March 28, 2012) through December 31, 2012 and the period from inception (March 28, 2012) through December 31, 2013

F-7

  

  

Notes to the Consolidated Financial Statements

F-8




[signedparitzopinionletter001.jpg]




  REPORT OF INDEPENDENT REGISTERED ACCOUNTING FIRM

Board of Directors
Alliance Media Group Holdings, Inc. and Subsidiaries
West Palm Beach, Florida

We have audited the accompanying consolidated balance sheets of Alliance Media Group Holdings, Inc. and Subsidiaries (a development stage company) as of December 31, 2013 and 2012 and the related consolidated statements of operations, changes in stockholders’ equity and cash flows for the year ended December 31, 2013, the period from inception (March 28, 2012) to December 31, 2012 and the period from inception (March 28, 2012) to December 31, 2013. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our 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 audits 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 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 provide 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 Alliance Media Group Holdings, Inc. and Subsidiaries (a development stage company) as of December 31, 2013 and 2012 and the results of its operations and its cash flows for the year ended December 31, 2013, the period from inception (March 28, 2012) to December 31, 2012 and the period from inception (March 28, 2012) to 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 2 to the financial statements, the Company has engaged only in development stage activities since inception, has incurred a loss since inception, has a net accumulated deficit and may be unable to raise further equity. At December 31, 2013, the Company had a working capital deficiency of $1,909,299. These factors raise substantial doubt about its ability to continue as a going concern. Management’s plans regarding these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.


[signedparitzopinionletter002.jpg]


Hackensack, New Jersey
May 15, 2014





Alliance Media Group Holdings, Inc.

(A Development Stage Company) 

CONSOLIDATED BALANCE SHEETS


 

 

 

 

 

December 31,

 

2013

 

2012

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

 $60,409

 

 $4

Prepaid expenses

 1,539,142

 

 30,000

TOTAL CURRENT ASSETS

 1,599,551

 

 30,004

 

 

 

 

PROPERTY AND EQUIPMENT, AT COST, NET OF ACCUMULATED DEPRECIATION OF $5,889

 51,269

 

 -

 

 

 

 

Other assets:

 

 

 

Security deposits

 18,000

 

 -

Investment in film and television productions

 924,040

 

-

Investment in Carbolosic

7,459,323

 

-

 

 

 

 

TOTAL OTHER ASSETS

 8,401,363

 

-

 

 

 

 

TOTAL ASSETS

 $10,052,183

 

 $30,004

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY/(DEFICIENCY)

 

 

 

Current liabilities:

 

 

 

Accounts payable and accrued liabilities

 $757,969

 

 $1,473

Liability for stock to be issued

354,500

 

-

Payable related to acquisition (related party)

2,200,000

 

 -

Short Term Note Payable - Related party

 111,800

 

 -

Convertible Debentures Payable

 70,000

 

 80,000

Interest Payable - Related Party

 2,932

 

 -

Interest Payable - Other

 11,649

 

 3,696

TOTAL CURRENT LIABILITIES AND TOTAL LIABILITIES

 3,508,850

 

 85,169

 

 

 

 

 

 

 

 

STOCKHOLDERS' EQUITY/(DEFICIENCY)

 

 

 

Preferred stock; $0.001 par value; 10,000,000 shares authorized; zero shares issued and outstanding at December 31, 2013 and December 31, 2012

 -

 

 -

Common stock; $0.001 par value; 100,000,000 shares authorized; 32,840,476 shares issued and outstanding at December 31, 2013 and 19,395,000 shares issued an outstanding at December 31, 2012)

 32,841

 

 19,395

Stock Subscription Receivable

 (10,000)

 

 (19,000)

Additional paid-in capital

 8,930,015

 

 49,450

Deficit accumulated during development stage

 (2,409,523)

 

 (105,010)

Total stockholders' equity/(deficiency)

 6,543,333

 

 (55,165)

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIENCY)

 $10,052,183

 

 $30,004

 

 

The accompanying notes are an integral part of these consolidated financial statements




Alliance Media Group Holdings, Inc.

(A Development Stage Company) 

CONSOLIDATED STATEMENTS OF OPERATIONS



 

 

 

 

 

 

 

 

 

From Inception
(March 28, 2012)
to

 

From
Inception
(March 28,
2012) through

 

For the Year Ended
December 31, 2013

 

December 31,
2012

 

December 31,
2013

Revenues

 $                          -

 

 $                     -

 

 $               -

 

 

 

 

 

 

Operating expense:

 

 

 

 

 

General and administrative

 2,292,486

 

 101,314

 

 2,393,800

Total operating expenses

 2,292,486

 

 101,314

 

 2,393,800

 

 

 

 

 

 

Loss from operation:

 (2,292,486)

 

 (101,314)

 

 (2,393,800)

 

 

 

 

 

 

Interest expense

 12,027

 

 3,696

 

 15,723

Net loss and comprehensive net loss

 $        (2,304,513)

 

 $            (105,010)

 

 $ (2,409,523)

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted net loss per share

 $                 (0.11)

 

 $                  (0.01)

 

 

 

 

 

 

 

 

Weighted average common shares outstanding

 20,270,384

 

 19,308,835

 

 

The accompanying notes are an integral part of these consolidated financial statements




Alliance Media Group Holdings, Inc.

(A Development Stage Company) 

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

Preferred Stock

 

Stock
Subscription

 

Additional
Paid-in

 

Deficit
Accumulated
during
Development

 

Total
Stockholders'
Equity

 

Shares

 

Amount

 

Shares

 

Amount

 

Receivable

 

Capital

 

Stage

 

(Deficiency)

Balance at inception (March 28, 2012)

 -

 

 $-

 

 -

 

 $-

 

 $-

 

 $-

 

 $-

 

 $-

Issuance of founders’ shares

 15,000,000

 

 15,000

 

 -

 

 -

 

 (15,000)   

 

 -

 

 -

 

-

Issuance of directors’ shares

400,000

 

400

 

-

 

-

 

(4,000)

 

3,600

 

-

 

-

Issuance of common stock for services

2,995,000

 

2,995

 

-

 

-

 

-

 

26,955

 

-

 

29,950

Issuance of common stock for cash

1,000,000

 

1,000

 

-

 

-

 

-

 

9,000

 

 

 

10,000

Capital contributed

 -

 

 -

 

 -

 

 -

 

 -

 

 9,895

 

 -

 

 9,895

Net loss

 -

 

 -

 

 -

 

 -

 

 -

 

 -

 

 (105,010)

 

 (105,010)

Balance as of December 31, 2012

 19,395,000

 

 19,395

 

 -

 

 -

 

 (19,000)

 

 49,450

 

 (105,010)

 

 (55,165)

Issuance of common stock for services

 4,300,477

 

 4,301

 

 -

 

 -

 

-

 

 2,356,897

 

 -

 

 2,361,198

Issuance of warrants for services

-

 

-

 

-

 

-

 

-

 

902,772

 

-

 

902,772

Issuance of common stock in connection with conversion of debentures

 83,333

 

 83

 

 -

 

 -

 

 -

 

 9,917

 

 -

 

 10,000

Issuance of common stock for cash

 194,666

 

 195

 

 -

 

 -

 

 9,000

 

 145,806

 

 -

 

 155,001

Issuance of common stock for acquisition (1)

 1,867,000

 

 1,867

 

 -

 

 -

 

 -

 

 222,173

 

 -

 

 224,040

Issuance of common stock for acquisition (2)

 7,000,000

 

 7,000

 

 -

 

 -

 

 -

 

 5,243,000

 

 -

 

 5,250,000

Net loss

 -

 

 -

 

 -

 

 -

 

 -

 

 -

 

 (2,304,513)

 

 (2,304,513)

Balance as of December 31, 2013

 32,840,476

 

 $32,841

 

 -

 

 $-

 

 $(10,000)

 

 $8,930,015

 

 $(2,409,523)

 

 $6,543,333

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


(1)

Stock issued for rights to two partially-completed television series “World Star” and “Making of a Saint:  The Journey to Sainthood”

(2)

Stock issued for acquisition of AMG Energy Group, LLC


The accompanying notes are an integral part of these consolidated financial statements




Alliance Media Group Holdings, Inc.

(A Development Stage Company) 

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

 

 

 

 

 

 

For the Year
Ended

 

From Inception
(March 28,
2012) to

 

From Inception
(March 28, 2012)
through

 

December 31,
2013

 

December 31,
2012

 

December 31,
2013

Cash flows from operating activities:

 

 

 

 

 

Net loss

 $(2,304,513)

 

 $(105,010)

 

 $(2,409,523)

Reconciliation of net loss to net cash used in operating activities

 

 

 

 

 

Depreciation and amortization

 5,899

 

 -

 

 5,899

Accrued interest on convertible debenture

 10,885

 

 3,696

 

 14,581

Issuance of common stock for services

 861,198

 

 -

 

 861,198

Issuance of warrants for services

902,772

 

-

 

902,772

Changes in operating assets and liabilities

 

 

 

 

 

Prepaid expenses

 (9,142)

 

 (30,000)

 

 (39,142)

Accounts payable and accrued liabilities

 946,673

 

 1,473

 

 948,146

Net cash provided by (used) in operating activities

 413,772

 

 (129,841)

 

 283,931

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

Purchase of property and equipment

 (57,168)

 

 -

 

 (57,168)

Cash paid for acquisitions

 (700,000)

 

 -

 

 (700,000)

Security deposit

 (18,000)

 

 -

 

 (18,000)

Net cash used by investing activities

 (775,168)

 

 -

 

 (775,168)

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

Proceeds from short-term note payable-related party

 111,800

 

 -  

 

 111,800

Net proceeds from issuance of common stock

 155,001

 

 39,950

 

 194,951

Net proceeds of common stock to be issued

 155,000

 

 -  

 

 155,000

Proceeds from issuance of Convertible Debt

 -

 

 80,000

 

 80,000

Contributions to Additional Paid-In-Capital

 -

 

 9,895

 

 9,895

Net cash provided by financing activities

 421,801

 

 129,845

 

 551,646

 

 

 

 

 

 

Net increase in cash and cash equivalents

 60,405

 

 4

 

 60,409

 

 

 

 

 

 

Cash and cash equivalent at beginning of the period

 4

 

 -

 

 -

Cash and cash equivalent at end of the period

 $60,409

 

 $4

 

 $60,409

 

 

 

 

 

 

Supplemental disclosure of cash flow information:

 

 

 

 

 

Cash paid during the period for:

 

 

 

 

 

Interest

 $-

 

 $-

 

 $-

Taxes

 -

 

 -

 

 -

 

 

 

 

 

 

Supplemental schedule of non-cash activities

 

 

 

 

 

Conversion of convertible debenture to common stock

 $10,000

 

 $-

 

 $10,000

Common stock issued for investment in Carbolosic

 5,250,000

 

 -

 

 5,250,000

Common stock issued for investment in film and television productions

 224,040

 

 -

 

 224,040

Debt incurred for acquisition of Carbolosic

2,200,000

 

 -

 

2,200,000

Common stock issued recorded as prepaid expense

1,500,000

 

 -

 

1,500,000



The accompanying notes are an integral part of these consolidated financial statements




Alliance Media Group Holdings, Inc.

(A Development Stage Company) 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 1 – ORGANIZATION


At inception (March 28, 2012), Alliance Media Group Holdings, Inc. (the “Company”) was organized to engage in the commercial production, distribution and exploitation of Motion Pictures and other Entertainment products including but not limited to animation, television, live events, commercial retail and destination property’s as well as other entertainment related enterprises such as theme parks and theme restaurants and destinations. The Company is organized as a Nevada Corporation and is registered as a Foreign Corporation in the State of Florida.


The Company operates two wholly-owned subsidiaries: AMG Entertainment, LLC and AMG Renewables, LLC.


AMG ENTERTAINMENT, LLC  


AMG Entertainment, LLC, a Florida limited liability company (“AMG Entertainment”), was created for the purpose of the commercial production, distribution and exploitation of motion pictures and other entertainment products including but not limited to animation, television, live events, recorded music, merchandising, commercial retail and destination properties, including but not limited to theme parks, theme restaurants, NASCAR and other sporting ventures. AMG Entertainment has five wholly owned subsidiaries, AMG Live, LLC, a Florida limited liability company (“AMG Live”); AMG Television, Inc, a Florida Corporation (“AMG Television”); AMG Releasing, LLC, a Florida limited liability company (“AMG Releasing”); AMG Music, Inc., a Florida Corporation (“AMG Music”); and AMG Restaurant Operations, LLC, a Florida limited liability company (“AMG Restaurant”).


AMG Restaurant has begun construction of its first theme restaurant The New York Sandwich Company in Ft. Lauderdale, Florida.


AMG RENEWABLES, LLC


On December 26, 2013, AMG Renewables, LLC, a Florida limited liability company (“AMG Renewables”), a wholly-owned subsidiary of the Company, entered into an agreement to acquire the controlling interest (51%) in AMG Energy Group, LLC a Florida limited liability company (“AMG Energy”) from certain related parties for a consideration comprising $2,200,000 cash, payable upon the successful completion of the Company’s pending private offering, together with delivery of 7,266,000 shares of Company Common Stock. In connection with the transaction, an amount which the Company owed to AMG Energy ($190,177) for various loans and consulting fees was eliminated in the acquisition. AMG Energy owns a fifty percent (50%) interest of Carbolosic Corporation, LLC, a Delaware limited liability company (“Carbolosic”), which holds an exclusive worldwide license to the University of Central Florida’s patented technology (U.S. Patent 8,062,428) known as “CTS™”. The CTS technology is a mechanical/chemical, dry process for converting cellulose material into sugar for use in the biofuels industry as well as other fine chemical manufacturing. On December 26, 2013, 7,000,000 shares of Company common stock were delivered to AMG Energy Solutions, LLC (a related party) and, as of May 15, 2014, the remaining 266,000 shares of Company common stock have yet to be delivered and have been accrued and are recorded as additional paid in capital and an accrued liability in the Company’s balance sheet. As of May 15, 2014, the Company had paid $168,742 of the $2,200,000 cash payable on account of this transaction, and as of such date, the proceeds of the Company’s pending private offering have been insufficient to pay the remaining amount, which amount has been recorded on the books of the Company as a related party account payable.


NOTE 2 – GOING CONCERN


The accompanying consolidated financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company as a going concern, which assumes the Company will realize its assets and discharge its liabilities in the normal course of business. The Company has engaged in only development stage activities since inception (March 28, 2012) through




December 31, 2013, has incurred losses since inception, has an accumulated deficit, and may be unable to raise further equity. At December 31, 2013 the Company had a working capital deficiency of $1,909,299. The Company expects to incur significant additional liabilities in connection with its start-up activities. Our ability to continue as a going concern is dependent upon our ability to obtain the necessary financing to meet our obligations and repay our liabilities when they become due and to generate sufficient revenues from our operations to pay our operating expenses. There are no assurances that we will continue as a going concern.


NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


Basis of Presentation


The accompanying consolidated financial statements of the Company were prepared in accordance with generally accepted accounting principles in the U.S. (“U.S. GAAP”) and include the assets, liabilities, revenues and expenses of the Company’s majority-owned subsidiaries over which the Company exercises control. Intercompany transactions and balances were eliminated in consolidation.


Principles of Consolidation


Our consolidated financial statements include the accounts of the Company and its subsidiaries, after elimination of intercompany accounts and transactions. Investments in business entities in which the Company lacks control but has the ability to exercise significant influence over operating and financial policies are accounted for using the equity method. Our proportionate share of net income or loss of the entity is recorded in Equity in net earnings of investee companies in the Consolidated Statements of  Operations


Use of Estimates


The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the dates presented and reported amounts of revenues and expenses during the reporting periods presented. Significant estimates inherent in the preparation of the accompanying Consolidated Financial Statements include estimates of impairment assessment of identifiable intangible assets and valuation allowance for deferred tax assets. Estimates are based on past experience and other considerations reasonable under the circumstances. Actual results may differ from these estimates.


Cash and Cash Equivalents


All highly liquid investments with maturities of three months or less at the date of purchase are considered to be cash equivalents.


Stock Compensation


The Company recognizes the cost of all share-based payments under the relevant authoritative accounting guidance. Share-based payments include any remuneration paid by the Company in shares of the Company’s common stock or financial instruments that grant the recipient the right to acquire shares of the Company’s common stock. For share-based payments to employees, which consist only of awards made under the stock option plan described below, the Company accounts for the payments in accordance with the provisions of ASC Topic 718, “Stock Compensation” (formerly referred to as SFAS No. 123(R)). Share-based payments to consultants, service providers and other non-employees are accounted for under in accordance with ASC Topic 718, ASC Topic 505, “Equity Payments to Non-Employees” or other applicable authoritative guidance.


Property and Equipment


Property and equipment are stated at cost less accumulated depreciation. Depreciation is provided for on a straight-line basis over the useful lives of the assets, generally 5 to 7 years. Expenditures for additions and improvements are capitalized; repairs and maintenance are expensed as incurred.




Accounting for Films and Television Programs.


We capitalize costs of production and acquisition, including financing costs and production overhead, to investment in films and television programs. These costs for an individual film or television program are amortized and participation and residual costs are accrued to direct operating expenses in the proportion that current year’s revenues bear to management’s estimates of the ultimate revenue at the beginning of the year expected to be recognized from exploitation, exhibition or sale of such film or television program over a period not to exceed ten years from the date of initial release. For previously released film or television programs acquired as part of a library, ultimate revenue includes estimates over a period not to exceed 20 years from the date of acquisition.


Due to the inherent uncertainties involved in making such estimates of ultimate revenues and expenses, these estimates have differed in the past from actual results and are likely to differ to some extent in the future from actual results. In addition, in the normal course of our business, some films and titles are more successful than anticipated and some are less successful than anticipated. Our management regularly reviews and revises when necessary its ultimate revenue and cost estimates, which may result in a change in the rate of amortization of film costs and participations and residuals and/or write-down of all or a portion of the unamortized costs of the film or television program to its estimated fair value. Our management estimates the ultimate revenue based on experience with similar titles or title genre, the general public appeal of the cast, actual performance (when available) at the box office or in markets currently being exploited, and other factors such as the quality and acceptance of motion pictures or programs that our competitors release into the marketplace at or near the same time, critical reviews, general economic conditions and other tangible and intangible factors, many of which we do not control and which may change.


An increase in the estimate of ultimate revenue will generally result in a lower amortization rate and, therefore, less film and television program amortization expense, while a decrease in the estimate of ultimate revenue will generally result in a higher amortization rate and, therefore, higher film and television program amortization expense, and also periodically results in an impairment requiring a write-down of the film cost to the title’s fair value. These write-downs are included in amortization expense within direct operating expenses in our consolidated statements of operations. Investment in films and television programs is stated at the lower of amortized cost or estimated fair value. The valuation of investment in films and television programs is reviewed on a title-by-title basis, when an event or change in circumstances indicates that the fair value of a film or television program is less than its unamortized cost. In determining the fair value of its films and television programs, we employ a discounted cash flows ("DCF") methodology with assumptions for cash flows. Key inputs employed in the DCF methodology include estimates of a film's ultimate revenue and costs as well as a discount rate. The discount rate utilized in the DCF analysis is based on our weighted average cost of capital plus a risk premium representing the risk associated with producing a particular film or television program. The fair value of any film costs associated with a film or television program that we plan to abandon is zero. As the primary determination of fair value is determined using a DCF model, the resulting fair value is considered a Level 3 measurement (as defined in Note 11 to our audited consolidated financial statements). Additional amortization is recorded in the amount by which the unamortized costs exceed the estimated fair value of the film or television program. Estimates of future revenue involve measurement uncertainty and it is therefore possible that reductions in the carrying value of investment in films and television programs may be required as a consequence of changes in our future revenue estimates. As of December 1, 2013, the Company does not have any revenue generating films or television programs.


Investment in Television and Film Productions


Identifiable intangible assets consist of an agreement to acquire the partially completed American Idol style reality series World Star (formerly Recreating A Legend) for $792,000 comprising a $600,000 cash payment plus 1,600,000 shares of Company Common Stock and the completed documentary Making of a Saint: The Journey to Sainthood for $132,040, comprising a $100,000 cash payment plus 267,000 shares of Company Common Stock. These acquired rights are stated at cost. The carrying value of an identifiable intangible asset is tested for impairment whenever events or changes in circumstances suggest that the asset’s carrying value may not be fully recoverable. An impairment loss, generally calculated as the difference between the estimated fair value and the carrying value of the asset, is recognized if the sum of the estimated undiscounted cash flows relating to the asset is less than the corresponding carrying value.




Investments


The Company’s investment in Carbolosic, LLC is accounted for using the equity method of accounting. We monitor our investment for impairment at least annually and make appropriate reductions in the carrying value if we determine that an impairment charge is required based on qualitative and quantitative information.


Convertible Instruments 


The Company evaluates and account for conversion options embedded in convertible instruments in accordance with ASC 815 “Derivatives and Hedging Activities”.

 

Applicable GAAP requires companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments according to certain criteria. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under other GAAP with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument.

 

The Company accounts for convertible instruments (when we have determined that the embedded conversion options should not be bifurcated from their host instruments) as follows: The Company records when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their stated date of redemption.

 

Common Stock Purchase Warrants and Other Derivative Financial Instruments


We classify as equity any contracts that require physical settlement or net-share settlement or provide us a choice of net-cash settlement or settlement in our own shares (physical settlement or net-share settlement) provided that such contracts are indexed to our own stock as defined in ASC 815-40 (“Contracts in Entity’s Own Equity”). We classify as assets or liabilities any contracts that require net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that event is outside our control) or give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement). We assess classification of our common stock purchase warrants and other free-standing derivatives at each reporting date to determine whether a change in classification between assets and liabilities is required.


Investments in non-consolidated subsidiaries


Investments in non-consolidated entities are accounted for using the equity method or cost basis depending upon the level of ownership and/or the Company's ability to exercise significant influence over the operating and financial policies of the investee. When the equity method is used, investments are recorded at original cost and adjusted periodically to recognize the Company's proportionate share of the investees' net income or losses after the date of investment. When net losses from an investment accounted for under the equity method exceed its carrying amount, the investment balance is reduced to zero and additional losses are not provided for. The Company resumes accounting for the investment under the equity method if the entity subsequently reports net income and the Company's share of that net income exceeds the share of net losses not recognized during the period the equity method was suspended. Investments are written down only when there is clear evidence that a decline in value that is other than temporary has occurred.


Impairment of Long Lived Assets 


Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. If events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable, the Company compares the carrying amount of the asset group to future undiscounted net cash flows, excluding interest costs, expected to be generated by the




asset group and their ultimate disposition. If the sum of the undiscounted cash flows is less than the carrying value, the impairment to be recognized is measured by the amount by which the carrying amount of the asset group exceeds the fair value of the asset group. Assets to be disposed of are reported at the lower of the carrying amount or fair value, less costs to sell.

 

Income Taxes


The Company use the asset and liability method of accounting for income taxes in accordance with ASC Topic 740, “Income Taxes.” Under this method, income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current year and (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity’s financial statements or tax returns. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is provided to reduce the deferred tax assets reported if based on the weight of the available positive and negative evidence, it is more likely than not some portion or all of the deferred tax assets will not be realized.

 

ASC Topic 740.10.30 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740.10.40 provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. We have no material uncertain tax positions for any of the reporting periods presented.


Profit (Loss) per Common Share:


Basic profit (loss) per share is calculated using the weighted-average number of common shares outstanding during each reporting period. Diluted loss per share includes potentially dilutive securities such as outstanding options and warrants, using various methods such as the treasury stock or modified treasury stock method in the determination of dilutive shares outstanding during each reporting period. The Company does not have any potentially dilutive instruments for the periods presented.


Development Stage


The Company has yet to generate any revenues and continues to devote substantially all of its efforts to development of the various segments of its business through its business development activities and the purchase of assets or similar types of transactions.


Fair Value Measurements


The Company adopted the provisions of ASC Topic 820, “Fair Value Measurements and Disclosures”, which defines fair value as used in numerous accounting pronouncements, establishes a framework for measuring fair value and expands disclosure of fair value measurements.


The estimated fair value of certain financial instruments, payables to related parties, and accounts payable and accrued expenses are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments.


ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value:


Level 1 — quoted prices in active markets for identical assets or liabilities


Level 2 — quoted prices for similar assets and liabilities in active markets or inputs that are observable




Level 3 — inputs that are unobservable (for example cash flow modeling inputs based on assumptions)


Recent Accounting Pronouncements


From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board or other standard setting bodies that may have an impact on the Company’s accounting and reporting. The Company believes that such recently issued accounting pronouncements and other authoritative guidance for which the effective date is in the future either will not have an impact on its accounting or reporting or that such impact will not be material to its financial position, results of operations, and cash flows when implemented.


NOTE 4 – SCREENPLAY OPTION


On July 12, 2012, the Company paid a non-refundable option payment of $30,000 against an option price of $300,000 to obtain an option on the screenplay “Our Father” from Prelude Pictures for a period expiring December 31, 2017. If the Company fully exercises the option, it will be responsible for an additional Producer Fee of $150,000 payable to Prelude Pictures. The Company has booked the initial $30,000 payment as a prepaid expense.


NOTE 5 – INVESTMENT IN TELEVISION & FILM PRODUCTIONS


On September 12, 2013, the Company, through its wholly-owned subsidiary AMG Television, acquired the partially completed American Idol style reality series World Star (formerly Recreating A Legend) for $792,000, comprising a $600,000 cash payment plus 1,600,000 shares of Company Common Stock and the completed documentary Making of a Saint: The Journey to Sainthood for $132,040, comprising a $100,000 cash payment plus 267,000 shares of Company Common Stock.


NOTE 6 – INVESTMENT IN CARBOLOSIC

 

On December 26, 2013, AMG Renewables, LLC, a Florida limited liability company (“AMG Renewables”), a wholly-owned subsidiary of the Company, entered into an agreement to acquire the controlling interest (51%) in AMG Energy Group, LLC a Florida limited liability company (“AMG Energy”) from certain related parties for a consideration comprising $2,200,000 cash, payable upon the successful completion of the Company’s pending private offering, together with delivery of 7,266,000 shares of Company Common Stock. In connection with the acquisition, an amount which the Company owed to AMG Energy ($190,177) for various loans and consulting fees was eliminated in the acquisition. AMG Energy owns a fifty percent (50%) interest of Carbolosic Corporation, LLC, a Delaware limited liability company (“Carbolosic”), which holds an exclusive worldwide license to the University of Central Florida’s patented technology (U.S. Patent 8,062,428) known as “CTS™”. The CTS technology is a mechanical/chemical, dry process for converting cellulose material into sugar for use in the biofuels industry as well as other fine chemical manufacturing. On December 26, 2013, 7,000,000 shares of Company common stock were delivered to AMG Energy Solutions, LLC (a related party) and, as of May 1, 2014, the remaining 266,000 shares of Company common stock have yet to be delivered and have been accrued and are recorded as additional paid in capital and an accrued liability in the Company’s balance sheet. As of May 1, 2014, the Company had paid $168,742 of the $2,200,000 cash payable on account of this transaction, and as of such date, the proceeds of the Company’s pending private offering have been insufficient to pay the remaining amount, which amount has been recorded on the books of the Company as a related party account payable. The Company’s investment in Carbolosic, LLC is accounted for using the equity method of accounting.


NOTE 7 – DEBT


Short Term Notes Payable—Related Parties


Throughout 2013, the Company issued unsecured short-term notes payable to various related parties, including officer and directors of the Company, with a term of one year. At December 31, 2013, in the aggregate the notes had an outstanding principal balance of $111,800 and bear interest at a rate of 5% per annum. At December 31, 2013, such related party notes comprised the following:




Payee

Amount

 

 

Palm Beach Energy Solutions, LLC

$71,000

Daniel de Liege

200

Grace Capital, Inc.

20,600

Prelude Motorsports

20,000

 

 

Total

$111,800


Convertible Debt


On July 6, 2012, the Company entered into a Convertible Debenture with a related party with a face amount of $50,000 due and payable on or before July 1, 2013. Thereafter, on July 31, 2012, the Company entered into a Convertible Debenture with another related party of the Company, with a face amount of $30,000 due and payable on or before July 31, 2013. Each of the Convertible Debentures accrue interest at a rate of ten percent (10%) per annum and is convertible into the Company’s Common Stock in whole or in part at the option of the holder at a conversion rate of $0.12 per share. The Convertible Debentures will automatically convert into Company Common Stock at the conversion rate in the event shares of Company Common Stock trade at a price of $1.00 or more for thirty (30) consecutive trading days; in the event of a Qualified Sale (as defined in the Convertible Debenture); in the event of a merger where shareholders prior to the merger hold less than 50% of the voting power with respect to Company Common Stock following the merger; and upon the completion by the Company of an underwritten initial public offering of the Company’s Common Stock with gross proceeds of at least $5,000,000. $10,000 of the face amount of one of the Convertible Debentures was converted to 83,333 shares of Common Stock in September 2013. The company assesses the value of the beneficial conversion feature of its convertible debt by determining the intrinsic value of such conversion, under ASC 470, at the time of issuance. At the time of issuance of the convertible debt instrument set out above, the fair value of the stock was either the same or less than the conversion price, and so there was no value attributable to any beneficial conversion feature.


NOTE 8 – STOCKHOLDERS’ EQUITY


The total number of shares of capital stock, which the Company has authority to issue, is one hundred ten million (110,000,000), one hundred million (100,000,000) of which are designated as common stock at $0.001 par value (the “Common Stock”) and ten million (10,000,000) of which are designated as preferred stock par value $0.001 (the “Preferred Stock”). As of December 31, 2013, the Company had 32,840,476 shares of Common Stock issued and outstanding and no shares of Preferred Stock were issued and outstanding at such date. Holders of shares of Common stock shall be entitled to cast one vote for each share held at all stockholders’ meetings for all purposes, including the election of directors. The Common Stock does not have cumulative voting rights. No holder of shares of stock of any class shall be entitled as a matter of right to subscribe for or purchase or receive any part of any new or additional issue of shares of stock of any class, or of securities convertible into shares of stock of any class, whether now hereafter authorized or whether issued for money, for consideration other than money, or by way of dividend. The Company has yet to designate any rights, preferences and privileges for any of its authorized Preferred Stock.


On April 2, 2012, the Registrant sold an aggregate of 15,000,000 shares of Company Common Stock to its founders for an aggregate investment of $15,000. Payment for these shares was booked as a stock subscription receivable.


On April 9, 2012, the Registrant sold an aggregate of 400,000 shares of Company Common Stock to four of the Company’s newly appointed directors for an aggregate investment of $4,000. Payment for these shares were recorded as a stock subscription receivable.


Also on April 9, 2012, the Registrant issued an aggregate of 865,000 shares of Company Common stock to ten (10) consultants who had provided services in connection with the conceptualization of the Company and the development of the Company’s Business Plan. The shares were valued at $0.01 per shares and the Company recognized an aggregate expense of $8,650 on account of such share issuances. There were no written agreements with any of the consultants.


Also on April 9, 2012, the Registrant issued an aggregate of 2,000,000 shares of Company Common stock to




three (3) persons who had been instrumental in the development of the concepts behind the Company’s Business Plan and who continue to be critical to the implementation of the same. The shares were valued at $0.01 per shares and the Company recognized an aggregate expense of $20,000 on account of such share issuances.


On April 30, 2012, the Company completed a private offering of 1,000,000 shares to 29 investors at $0.01 per share for an aggregate proceeds of $10,000.


On May 4, 2012, the Company issued an aggregate of 130,000 shares of Company Common stock to two (2) consultants who had provided services in connection with the conceptualization of the Company and the development of the Company’s Business Plan. The shares were valued at $0.01 per shares and the Company recognized an aggregate expense of $1,300 on account of such share issuances.


In September 2013, the Company commenced an offering of up to 12,000,000 shares of Common Stock at a price of $0.75 per Share (the “Offering”). Through December 31, 2013, the Company had sold 194,666 shares of Common Stock through the Offering to five (5) investors for aggregate proceeds of $155,001. The Offering is ongoing.


During the fiscal year ended December 31, 2013, the Company issued an aggregate of 4,300,477 shares of its common stock for services valued at $2,361,198. The value of 2,000,000 of these shares ($1,500,000) was recorded as a prepaid expense in 2013 as the related consulting agreement was terminated and the shares have been tendered to the Company for cancellation. The Company expects to record $1,500,000 as an offset to this prepaid expense on account of the share cancellation in the quarter ending March 31, 2014.


During the fiscal year ended December 31, 2013, the Company issued an aggregate of 4,300,477 shares of its common stock for services valued at $2,361,198.


During the fiscal year ended December 31, 2013, the Company issued an aggregate of 83,333 shares of its common stock on account of the conversion of certain Debentures with a face amount of $10,000.


During the fiscal year ended December 31, 2013, the Company issued an aggregate of 8,867,000 shares of its common stock as partial consideration for certain acquisitions valued at $5,474,040. During 2013, 2,000,000 shares issued in connection with an acquisition transaction were voluntarily cancelled by the holder.


On November 19, 2013, the Company entered into a Common Stock Purchase Warrant agreement with Constellation Asset Advisors, Inc. whereby it issued a Warrant to purchase 2,000,000 shares of Common Stock for a period of five (5) years at an exercise price of $1.00 per share. The Warrant was issued in partial consideration for a Consulting Agreement.



NOTE 9 – SEGMENT INFORMATION


 

 

 

 

 

December 31,

 

2013

 

2012

Revenue:

 

 

 

Alliance Media Group Holdings, Inc.

 $-

 

 $-

AMG Renewables, LLC

 -

 

 -

AMG Entertainment, LLC

 -

 

 -

Total Revenue

 -

 

 -

Net Operating Losses

 

 

 

Alliance Media Group Holdings, Inc.

 $2,215,495

 

 105,010

AMG Renewables, LLC

 380

 

 -

AMG Entertainment, LLC

 88,638

 

 

Total Net Losses

 3,304,513

 

 105,010

Total Assets:

 

 

 

Alliance Media Group Holdings, Inc.

 $1,598,771

 

 $30,004

AMG Renewables, LLC

 7,460,927

 

 -

AMG Entertainment, LLC

 992,485

 

 -

Total Net  Assets

 10,052,183

 

 30,004

 

 

 

 


NOTE 10 – INCOME TAXES


The reconciliation of income tax benefit at the U.S. statutory rate of 34% for the years ended December 31, 2013 and 2012 to the Company’s effective tax rate is as follows:





   Years Ended
   December 31, 2013  December 31, 2012
Statutory federal income tax rate   -34%   -34%
State income tax, net of federal benefits   -6%   -6%
Permanent differences   0%   0%
Valuation Allowance   -40%   -40%
Income tax provision (benefit)   -80 %   -80 %


The benefit for income tax is summarized as follows:


   Years Ended
   December 31, 2013  December 31, 2012
Federal          
      Current  $–     $–   
      Deferred   (451,000)   (37,000)
State          
      Current   (77,000)    (6,300)
      Deferred   –      –   
Change in valuation allowance   (528,000)    (43,300)
Income tax provision (benefit)  $–      $–    


The tax effects of temporary differences that give rise to the Company’s net deferred tax liability as of December 31, 2013 and 2012 are as follows:


   Years Ended
   December 31, 2013  December 31, 2012
Deferred tax asset          
Net operating loss carryovers  $180,083   $105,010 
Stock-based compensation   1,109,750    —   
Total deferred tax assets   1,289,834    105,010 
Valuation Allowance   (1,289,834 )   (105,010 )
Deferred tax asset, net of allowance  $–      $–    


As of December 31, 2013 and 2012, the Company had $180,083 and $ 105,010 of Federal net operating loss carryovers (“NOLs”) which begin to expire in 2033. Utilization of the NOLs may be subject to limitation under the Internal Revenue Code Section 382 should there be a greater than 50% ownership change as determined under regulations. 


In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will 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 the assessment, management has established a full valuation allowance against the entire deferred tax asset relating to NOLs for every period because it is more likely than not that all of the deferred tax asset will not be realized.


The Company files U.S. Federal and Florida tax returns that are subject to audit by tax authorities beginning with the year ended December 31, 2012. The Company’s policy is to classify assessments, if any, for tax and related interest and penalties as tax expense.


NOTE 11 - COMMITMENTS AND CONTINGENCIES


Lease


The Company leases approximately 4,000 sq. ft. located at 400 N. Congress Ave., Suite 130, West Palm Beach, FL 33401 from 400 North Congress Ave Building for a gross rent of $4,085 plus sales tax and the tenant’s share of operating expenses per month. The term of the lease is 40 months terminating August 6,




2015. Rent expense for the year ended December 31, 2013 and the period ending December 31, 2012 was $32,639 and $8,443 respectively.


NOTE 12 – RELATED PARTY TRANSACTIONS


Related Transactions


1)

On January 2, 2013, the Company entered into three Consulting Agreements with related parties, (each calling for monthly payments to the consultant in the amount of $10,000. Under the terms of the Consulting Agreements, each Consultant will review and provide input on a variety of areas including corporate structure, marketing materials, website and promotional pieces; provide introductions to various organizations and individuals who might support the Company’s business development efforts and provide input and advice on the structuring of a private placement offering and the production of supporting materials. The Consulting Agreements will stay in place so long as the Company requires the Consultant’s services.


2)

Mark W. Koch and Daniel de Liege are principals of AMG Energy Solutions, Inc, which owns 49% of AMG Energy Group, LLC. The company owns the remaining 51% of AMG Energy Group, LLC (see NOTE 6, above).


The officers and directors for the Company are involved in other business activities and may, in the future, become involved in other business opportunities. If a specific business opportunity becomes available, such persons may face a conflict in selecting between the Company and their other business interest. The Company has not formulated a policy for the resolution of such conflicts.


Short-term notes payable and convertible notes issued to related parties are described in NOTE 7.


NOTE 13 – SUBSEQUENT EVENTS


The Company has evaluated subsequent events through May 15, 2014, which is the date the financial statements were available to be issued. Based on this evaluation, the Company has identified the following subsequent events:


Stockholders’ Equity:


On March 17, 2014, a consulting agreement entered into in 2013 was terminated and 2,000,000 shares of common stock (valued at $1,500,000) which were issued in 2013 to the consultant in connection with that agreement were returned to the Company for cancellation. The Company has no residual liability on account of this consulting agreement. The Company had recorded the $1,500,000 expense attributable to the stock issuance as a prepaid expense in 2013 and will record a $1,500,000 offset to such prepaid expense on account of the share cancellation in the quarter ending March 31, 2014.


Convertible Debentures:


$50,000 of the principal and accrued interest thereon of the aggregate amount of the outstanding convertible debentures was converted to 458,333 shares of Common Stock on January 31, 2014 and the remaining $20,000 of outstanding convertible debentures was repaid on May 1, 2014 and the accrued interest thereon will be converted into shares of Common Stock. (see NOTE 7).


Intangible Assets;


On April 25, 2014, the Company notified the Seller that it was rescinding its agreements to acquire the partially completed American Idol style reality series World Star (formerly Recreating A Legend) and the completed documentary Making of a Saint: The Journey to Sainthood due to the discovery of potential misrepresentations on the part of the Seller with respect to the assets acquired. At the same time, the Company filed a lawsuit against the Seller in Palm Beach County, Florida seeking to rescind the Asset Purchase agreements and to seek the return of the Company stock which had been issued in connection with the transactions and for financial damages. In response, the Seller has alleged that the Company had breached the agreement, an allegation that the Company denies. The litigation is in its early stages and the Company cannot predict whether a successful outcome will be achieved. (see NOTE 5).


Private Offering:


In November 2013, the Company commenced an offering of up to 12,000,000 shares of Common Stock at a price of $0.75 per Share (the “Offering”). During the period commencing January 1, 2014 through May 1, 2014, the Company sold an additional 858,955 shares of Common Stock through the Offering to approximately fifty-five (55) investors for aggregate proceeds of approximately $644,216. As of May 1, 2014, the Company had sold

an aggregate of 1,053,621 shares in the Offering for aggregate proceeds of approximately $789,956. The Offering is ongoing (see NOTE 6).




ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE


None.


ITEM 9A. CONTROLS AND PROCEDURES.

(a) Disclosure Controls and Procedures

We are required to maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer (also our principal executive officer) and our chief financial officer (also our principal financial and accounting officer) to allow for timely decisions regarding required disclosure.


Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 (“Exchange Act”), the Company’s management, including the Company’s President (“President”) (the Company’s principal executive officer) and Chief Financial Officer (“CFO”) (the Company’s principal financial and accounting officer), has evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation the Company’s President and CFO concluded that the Company’s disclosure controls and procedures were not effective as of December 31, 2013 to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including the Company’s CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.

 

b)

Management’s Report on Internal Control over Financial Reporting


Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934 as a process designed by, or under the supervision of, the company’s principal executive and principal financial officers and effected by the company’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America and includes those policies and procedures that:

●    

Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company;

Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and

Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.

 

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. 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. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.

As of December 31, 2013, management assessed the effectiveness of our internal control over financial reporting based on the criteria for effective internal control over financial reporting established in Internal Control--Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") and SEC guidance on conducting such assessments. Based on that evaluation, they concluded that, during the period covered by this report, such internal controls and procedures were not effective to detect the inappropriate application of US GAAP rules as more fully described below. This was due to deficiencies that existed in the design or operation of our internal controls over financial reporting that adversely affected our internal controls and that may be considered to be material weaknesses.

The matters involving internal controls and procedures that our management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board was (a) the lack of a functioning audit committee, (b) there are insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements, (c) there is a lack of expertise with US generally accepted accounting principles and SEC rules and regulations for review of critical accounting areas and disclosures and material non-standard transactions and (d) lack of effective oversight during the financial close process resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures. The aforementioned material weaknesses were identified by our management in connection with the review of our financial statements for the year ended December 31, 2013.

Management believes that the material weakness set forth above did not have an effect on our financial results. However, management believes that the lack of a functioning audit committee and the lack of a majority of outside directors, coupled with not having individuals on staff or retainer with a thorough knowledge of US GAAP and SEC rules and regulations and lack of effective oversight on the financial close process results in ineffective oversight in the establishment and monitoring of required internal controls and procedures, which could result in a material misstatement in our financial statements in future periods.

This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the SEC that permit us to provide only the management's report in this annual report.

Remediation Plan

Management is sensitive to the issues presented and intends to take appropriate action when the Company’s financial resources permit. In May 2014, the Company hired a Financial Controller and intends to hire additional support staff when its financial resources permit. In addition, Management will continue to review and make necessary changes to the overall design of our internal control environment.

 (c) Changes in Internal Control over Financial Reporting

There have not been any changes in the Company's internal control over financial reporting (as such term is defined in Rules 13a-15(f) under the Exchange Act) during the fiscal period to which this report relates that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.




ITEM 9B. OTHER INFORMATION


None


PART III


ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE



Directors, Executive Officers and Significant Employees


The following table sets forth information with respect to our directors and executive officers. Other than these persons, there are no significant employees.



Name

Age

Positions

Daniel de Liege

47

Director, CEO, CFO, President, and Secretary

 

 

 

Mark W. Koch

54

Director

 

 

 

Johan Sturm

69

Director

 

 

 

Ron Logan

74

Director

 

 

 

Joseph McNaney

55

Director

 

 

 

Ted Chasanoff

62

Director



Daniel de Liege became CEO, President, Secretary and a director of the Company in April 2012 and CFO in April 2014. Prior to founding the Company, Mr. de Liege has been the President and CEO of Prelude Pictures since 1997. Prior to that Mr. de Liege was President of 24/7 Entertainment from 1994 until 1997. Mr. de Liege attended Palm Beach State College and is on the Board of Directors of The Timothy Initiative, a not for profit organization.


Mark W. Koch became a director of the Company in April, 2012. Prior to becoming a director of the Company, Mr. Koch is the Founder and Chairman of Prelude Pictures since 1992. Prior to that Mr. Koch was the President of Marbi Inc. from 1989 to 1999. Mr. Koch holds an AA degree from Northwood University.


Johan Sturm became a director of the Company in April, 2012. Prior to becoming a director of the Company, Mr. Sturm is currently CEO of Animated Family Films since 2005. Prior to that Mr Sturm was Founder and CEO Eternal Productions from 2000 until present. Mr. Sturm holds an accounting degree from the University of Witwatersrand in South Africa and has been a real estate developer and entrepreneur since the 1970’s.


Ron Logan became a director of the Company in April, 2012. Mr Logan is currently an associate Professor at the University of Central Florida. From 1960 to 2001 Mr. Logan served as the Executive Vice President of the Walt Disney Company. Mr Logan holds a BA and MA from UCLA.


Joseph McNaney became a director of the Company in April, 2012. Prior to becoming a director of the Company, Mr McNaney has been the Executive Vice President of Cellmark Paper since 2006. Prior to that Mr. McNaney had held senior sales and management positions at Hoechst, Champion Paper, Ris Paper and Walters Wilcox and Furlong. Mr. McNaney graduated from Iona College.




Ted R. Chasanoff has been a director of the Company since October 2013. Ted Chasanoff is currently a shareholder in Mayer Hoffman McCann CPAs and a managing director of CBIZ MHM LLC. He is experienced in both the accounting and merger and acquisition area and provides business advisory services to publicly and privately held clients in various industries including media, technology, retail, distribution and service industries. He has worked closely with private equity groups, venture capital funds and the investment banking communities. He has served as the engagement partner on many large and small publicly traded companies. Prior to joining Mayer Hoffman McCann and CBIZ MHM he served as an audit partner at KPMG. 
Mr. Chasanoff received his undergraduate degree from SUNY at Stony Brook and his MBA from Rutgers University. He has been a speaker at many conferences throughout the United States on accounting and merger and acquisition topics.

There are no family relationships between our officers and directors. Each director is elected at our annual meeting of stockholders and holds office until the next annual meeting of stockholders, or until his successor is elected and qualified.



Audit Committee and Audit Committee Financial Expert

Ted Chasanoff is designated as the audit committee financial expert, however, we do not currently have a functioning audit committee and our entire board of directors handles the functions that would otherwise be handled by an audit committee. We expect to designate an audit committee of our board of directors in the near future.


Section 16(a) Beneficial Ownership Reporting Compliance.


Section 16(a) of the Securities Act of 1934 requires the Company's officers and directors, and greater than 10% stockholders, to file reports of ownership and changes in ownership of its securities with the Securities and Exchange Commission. Copies of the reports are required by SEC regulation to be furnished to the Company. Based on management's review of these reports during the fiscal year ended December 31, 2013, all reports required to be filed were filed on a timely basis.


Code of Ethics

Our board of directors has adopted a code of ethics that our officers, directors and any person who may perform similar functions is subject to. The Code of Ethics does not indicate the consequences of a breach of the code. If there is a breach, the board of directors would review the facts and circumstances surrounding the breach and take action that it deems appropriate, which action may include dismissal of the employee who breached the code.

ITEM 11. EXECUTIVE COMPENSATION.

The following is a summary of the compensation we paid for each of the last two years ended December 31, 2013 and 2012, respectively (i) to the persons who acted as our principal executive officer during our fiscal year ended December 31, 2013 and (ii) to the person who acted as our next most highly compensated executive officer other than our principal executive officer who was serving as our executive officer as of the end of our last fiscal year.




Name and

Principal 

Position

 

Year

 

 

Salary ($)

 

 

Bonus ($)

 

 

Stock 

Awards ($)

 

 

Option 

Awards ($)

 

 

Non-Equity

Incentive

 Plan ($)

 

 

Non-Qualified Deferred 

Compensation Earnings ($)

 

 

    All other

Compensation

           ($)

 

 

Total ($)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Daniel de Liege

(President, CEO)

 

 

2013

 

 

$

0

 

 

$

0

 

 

$

0

 

 

$

0

 

 

$

0

 

 

$

0

 

 

$


 

25,000

$


25,000

 

 

 

 

2012

 

 

$

0

 

 

$

0

 

 

$

0

 

 

$

0

 

 

$

0

 

 

$

0

 

 

$


 

12,950

$


12,950

 




Outstanding Equity Awards at Fiscal Year End

 

None of our executive officers received any equity awards, including, options, restricted stock or other equity incentives, during the fiscal year ended December 31, 2013.

  

Additional Narrative Disclosures

 

All of our employees, including our executive officers, are employed at will and none of our employees has entered into an employment agreement with us. We do not have any bonus, deferred compensation or retirement plan.


Director Compensation

 

We have no standard arrangements in place to compensate our directors for their service as directors or as members of any committee of directors. In the future, if we retain non-employee directors, we may decide to compensate them for their service to us as directors and members of committees.


ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table sets forth certain information regarding beneficial ownership of the Company's Common Stock as of May 1, 2014, by: (I) each current director; each nominee for director, and executive officer of the Company; (ii) all directors and executive officers as a group; and (iii) each shareholder who owns more than five percent of the outstanding shares of the Company's Common Stock. Except as otherwise indicated, the Company believes each of the persons listed below possesses sole voting and investment power with respect to the shares indicated.


     

Name and Address

 

No. of Shares (1)

 

% Owned (2)

 

Capacity

Daniel de Liege

 

4,505,000

 

13.522%

 

Officer/Director

400 N Congress Avenue Suite 130

 

 

 

 

 

 

West Palm Beach, FL 33401

 

 

 

 

 

 

 

 

 

 

 

 

 

Mark W. Koch (3)

 

4,026,000

 

12.097%

 

Director

400 N Congress Avenue Suite 130

 

 

 

 

 

 

West Palm Beach, FL 33401

 

 

 

 

 

 

 

 

 

 

 

 

 

Johan Sturm (4)

 

3,376,316

 

10.145%

 

Director

400 N Congress Avenue Suite 130

 

 

 

 

 

 

West Palm Beach, FL 33401

 

 

 

 

 

 

 

 

 

 

 

 

 

Joseph McNaney

 

1,184,000

 

3.558%

 

Director

400 N Congress Avenue Suite 130

 

 

 

 

 

 

West Palm Beach, FL 33401

 

 

 

 

 

 

 

 

 

 

 

 

 

Ron Logan

 

100,000

 

*     

 

Director

400 N Congress Avenue Suite 130

 

 

 

 

 

 

West Palm Beach, FL 33401

 

 

 

 

 

 

 

 

 

 

 

 

 

Ted R. Chasanoff (5)

 

304,308

 

*     

 

Director

400 N Congress Avenue Suite 130

 

 

 

 

 

 

West Palm Beach, FL 33401

 

 

 

 

 

 

 

 

 

 

 

 

 

All officers and directors as a group

 

 

 

 

 

 

(six persons)

 

13,495,624

 

40.552%

 

 

 

 

 

 

 

 

 




     

AMG Energy Solutions, LLC (6)

 

6,700,000

 

20.132%

 

5% Holder

400 N Congress Avenue Suite 130

 

 

 

 

 

 

West Palm Beach, FL 33401

 

 

 

 

 

 



*  less than one percent (1%)


(1) Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and includes voting and investment power with respect to the shares. Shares of Common Stock subject to options or warrants currently exercisable or exercisable within 60 days are deemed outstanding for computing the percentage of the person holding such options or warrants, but are not deemed outstanding for computing the percentage of any other person.


(2)  This table is based upon 33,279,748 shares issued and outstanding as of May 1, 2014.


(3) Includes 500,000 Shares owned by Mark W. Koch, 20,000 shares owned by Marilyn Koch, 6,000 shares owned by Blake Koch and 3,500,000 shares owned by MWK Holdings, Inc., the beneficial owner of which is Mark Koch.


(4) Includes 3,151,316 shares owned by Willem Johan Sturm and Marie M Veronique Sturm JT, 112,500 shares owned by Angelique Sturm and 112,500 shares owned by Jayson Sturm.


(5) Includes 196,808 shares owned by Ted Chasanoff, 7,500 shares owned by Devin Chasanoff and 100,000 shares owned by Teddy Chasanoff.


(6)  The beneficial owner of AMG Energy Solutions, LLC is Daniel de Liege.


 

 Changes in Control

 

We do not currently have any arrangements which if consummated may result in a change of control of our Company.


ITEM 13.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

Related Transactions


1)

On January 2, 2013, the Company entered into three Consulting Agreements with related parties, (each calling for monthly payments to the consultant in the amount of $10,000. Under the terms of the Consulting Agreements, each Consultant will review and provide input on a variety of areas including corporate structure, marketing materials, website and promotional pieces; provide introductions to various organizations and individuals who might support the Company’s business development efforts and provide input and advice on the structuring of a private placement offering and the production of supporting materials. The Consulting Agreements will stay in place so long as the Company requires the Consultant’s services.


2)

Throughout 2013, the Company issued unsecured short-term notes payable to various related parties, including officer and directors of the Company, with a term of one year. At December 31, 2013, in the aggregate the notes had an outstanding principal balance of $111,800 and bear interest at a rate of 5% per annum. At December 31, 2013, such related party notes comprised the following:


Payee

Amount

 

 

Palm Beach Energy Solutions, LLC

$71,000

Daniel de Liege

200

Grace Capital, Inc.

20,600




Prelude Motorsports

20,000

 

 

Total

$111,800


3)

Daniel de Liege advanced an aggregate of $18,000 to the cover security deposits for the leases related to New York Sandwich Company and the Company’s headquarters.


4)

Mark W. Koch and Daniel de Liege are principals of AMG Energy Solutions, Inc, which owns 49% of AMG Energy Group, LLC. The company owns the remaining 51% of AMG Energy Group, LLC.


The officers and directors for the Company are involved in other business activities and may, in the future, become involved in other business opportunities. If a specific business opportunity becomes available, such persons may face a conflict in selecting between the Company and their other business interest. The Company has not formulated a policy for the resolution of such conflicts.


Director Independence


The Company has three (3) “independent” directors (Joseph McNaney, Ron Logan and Ted Chasanoff) within the meaning of Nasdaq Marketplace Rule 4200.


ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

AUDIT FEES


The aggregate fees billed by our auditors, Paritz & Co.P.A., for professional services rendered for the audit of our annual financial statements for fiscal year ended December 31, 2013 and review our interim financial statements for the first, second and third quarters of 2014 will be approximately $35,000 The aggregate fees billed by our auditors, Paritz & Co., for professional services rendered for the audit of our annual financial statements for fiscal year ended December 31, 2012 and review our interim financial statements for the first, second and third quarters of 2013 was approximately $10,400.

 

AUDIT-RELATED FEES

 

During the past fiscal year, no fees were billed or incurred for assurance or related services by our auditors that were reasonably related to the audit or review of financial statements reported above.


TAX FEES

 

There were no tax preparation fees billed for the fiscal year ended December 31, 2013.

 

ALL OTHER FEES

 

During the past fiscal year, no other fees were billed or incurred for services by our auditors other than the fees noted above. Our board, acting as an audit committee, deemed the fees charged to be compatible with maintenance of the independence of our auditors.


THE BOARD OF DIRECTORS PRE-APPROVAL POLICIES


We do not have a separate audit committee. Our full board of directors performs the functions of an audit committee. Before an independent auditor is engaged by us to render audit or non-audit services, our board of directors pre-approves the engagement. Board of directors pre-approval of audit and non-audit services will not be required if the engagement for the services is entered into pursuant to pre-approval policies and procedures established by our board of directors regarding our engagement of the independent auditor, provided the policies and procedures are detailed as to the particular service, our board of directors is informed of each service provided, and such policies and




procedures do not include delegation of our board of directors' responsibilities under the Exchange Act to our management. Our board of directors may delegate to one or more designated members of our board of directors the authority to grant pre-approvals, provided such approvals are presented to the board of directors at a subsequent meeting. If our board of directors elects to establish pre-approval policies and procedures regarding non-audit services, the board of directors must be informed of each non-audit service provided by the independent auditor. Board of directors pre-approval of non-audit services, other than review and attest services, also will not be required if such services fall within available exceptions established by the SEC. For the fiscal year ended December 31, 2013, 100% of audit-related services, tax services and other services performed by our independent auditors were pre-approved by our board of directors.

 

Our board has considered whether the services described above under the caption "All Other Fees", which are currently none, is compatible with maintaining the auditor's independence.


The board approved all fees described above.


PART IV


Item 15. Exhibits, Financial Statement Schedules


The following documents are filed as part of this 10-K:


1. FINANCIAL STATEMENTS


The following documents are filed in Part II, Item 8 of this annual report on Form 10-K:


Report of Paritz & Co. P. A., Independent Registered Certified Public Accounting Firm


Consolidated Balance Sheets as of December 31, 2013 and 2012


Consolidated Statements of Operations for the year ended December 31, 2013 and the period from inception (March 28, 2012) through December 31, 2012 and the period from inception (march 28, 2012) through December 31, 2013


Consolidated Statements of Changes in Stockholders’ Equity for the period from inception (March 28, 2012) through December 31, 2013


Consolidated Statements of Cash Flows for the year ended December 31, 2013 and the period from inception (March 28, 2012) through December 31, 2012 and the period from inception (March 28, 2012) through December 31, 2013


Notes to the Consolidated Financial Statements


2. FINANCIAL STATEMENT SCHEDULES


All financial statement schedules have been omitted as they are not required, not applicable, or the required information is otherwise included.


3. EXHIBITS


The exhibits listed below are filed as part of or incorporated by reference in this report.




Exhibit No.   

Identification of Exhibit

 

 

31.1.

Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 

 

31.2.

Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 

 

32.1

Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 

 

32.2

Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.




SIGNATURES


Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



 

 

Alliance Media Group Holdings, Inc.

 

 

(Registrant)

 

 

 

 

 

 

 

By

 

 

 

/s/ Daniel de Liege

 

 

 

 

 

Daniel de Liege

 

 

Chief Executive Officer, President and
Secretary (Principal Executive Officer)

 

 

 

 

Date   

 

 

 

May 19, 2014

 

 

 

 

By

 

 

 

/s/ Daniel de Liege

 

 

 

 

 

Daniel de Liege

 

 

Chief Financial Officer (Principal
Financial and Accounting Officer)

 

 

 

 

Date

 

 

 

May 19, 2014



Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following person on behalf of the registrant and in the capacity and on the date indicated.


 

By

 

 

 

/s/ Daniel de Liege

 

 

 

 

 

Daniel de Liege

 

 

Chief Executive Officer, Chief Financial
Officer, President, Secretary and Director

 

 

 

 

 

 

 

Date   

 

 

 

May 19, 2014

 

 

 

 

By

 

 

 

/s/ Johan Sturm

 

 

 

 

 

Johan Sturm

 

 

Director

 

 

 

 

Date

 

 

 

May 19, 2014

 

 

 

 

 

 

 

 

 

 

 

 




 

By

 

 

 

/s/ Mark W. Koch

 

 

 

 

 

Mark W. Koch

 

 

Director

 

 

 

 

Date   

 

 

 

May 19, 2014

 

 

 

 

 

 

 

By

 

 

 

/s/ Joseph McNaney

 

 

 

 

 

Joseph McNaney

 

 

Director

 

 

 

 

Date

 

 

 

May 19, 2014

 

 

 

 

By

 

 

 

/s/ Ron Logan

 

 

 

 

 

Ron Logan

 

 

Director

 

 

 

 

Date

 

 

 

May 19, 2014

 

 

 

 

By

 

 

 

/s/ Ted Chasanoff

 

 

 

 

 

Ted Chasanoff

 

 

Director

 

 

 

 

Date

 

 

 

May 19, 2014