UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K/A
Amendment
No. 1
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported): January 30, 2015
REBEL
GROUP, INC. |
(Exact
name of registrant as specified in its charter) |
Florida
|
|
333-177786 |
|
45-3360079 |
(State
or other jurisdiction
of incorporation) |
|
(Commission
File Number) |
|
(IRS
Employer
Identification No.) |
7500A
Beach Road, Unit 12-313, The Plaza
Singapore
199591
(Address
of Principal Executive Offices)
Tel.
+6562940423
(Registrant’s
telephone number, including area code)
(Former
name or former address, if changed since last report)
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:
☐ Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Explanatory
Note
Since the transactions
reported in the Registrant’s Current Report on Form 8-K which was filed with the Securities and Exchange Commission on February
5, 2015 (the “Initial Filing”), the Registrant adopted the December 31 fiscal year end of Rebel Holdings Limited (“Rebel
FC”), the accounting acquirer of the Registrant. The Registrant hereby makes this amendment to the Initial Filing to file
the audited combined financial statements (the “Audited Financials”) of Rebel FC for the years ended December 31, 2014
and 2013 and amends the section of “Management’s Discussion and Analysis of Financial Condition and Plan of Operations”
to reflect the information in the Audited Financials.
Except
as described above, no other portions of the Initial Filing are being amended.
USE
OF DEFINED TERMS
Except
as otherwise indicated by the context, references in this Report to:
● |
“U.S. dollar,”
“$”and “US$” refer to the legal currency of the United States. |
● |
“Singapore
dollar” and “SGD” refer to the legal currency of Singapore. |
● |
“Securities
Act” refers to the Securities Act of 1933, as amended. |
● |
“Exchange
Act” refers to the Securities Exchange Act of 1934, as amended. |
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND PLAN OF OPERATIONS
This
Current Report on Form 8-K contains forward-looking statements within the meaning of the federal securities laws. These include
statements about our expectations, beliefs, intentions or strategies for the future, which we indicate by words or phrases such
as “anticipate,” “expect,” “intend,” “plan,” “will,” “we believe,”
“management believes” and similar language. Except for the historical information contained herein, the matters discussed
in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and elsewhere
in this Current Report are forward-looking statements that involve risks and uncertainties. The cautionary language in this Current
Report, provide examples of risks, uncertainties and events that may cause our actual results to differ materially from those
projected. Except as may be required by law, we undertake no obligation to update any forward-looking statement to reflect events
after the date of this Current Report on Form 8-K.
The "Company", "we,"
"us," and "our," in this Management’s Discussion and Analysis of Financial Condition and Plan of Operation
refer to the combined business of (i) Rebel Holdings Limited (“Rebel FC”), a company incorporated under the laws of
British Virgin Islands a wholly-owned subsidiary of Rebel Group, Inc.; (ii) Pure Heart Entertainment Pte. Ltd., a company incorporated
under the laws of Singapore and a wholly-owned subsidiary of Rebel FC (“Pure Heart”); (iii) SCA Capital Limited, a
company incorporated under the laws of British Virgin Islands and a wholly-owned subsidiary of Rebel FC (“SCA Capital”).
Overview
Rebel
Holdings Limited, which utilizes the trade name of Rebel Fighting Championship (“Rebel FC”), was incorporated on October
28, 2014 in British Virgin Islands and engages in hosting and promoting MMA events since its incorporation.
Pure
Heart Entertainment Pte Ltd. (“Pure Heart”) was incorporated under the laws of the Singapore on August 24, 2000 under
the name “Sook Kee Coffeeshop Pte. Ltd.” Effective on November 27, 2002, it changed its name to “Asia Pacific
Export International Pte Ltd.” It later changed its name from “Asia Pacific Export International Pte Ltd.” to
“Pure Heart Entertainment Pte Ltd.” on June 7, 2013. On October 30, 2014, Pure Heart became a wholly-owned subsidiary
of Rebel FC.
SCA Capital Limited (“SCA Capital”),
a British Virgin Islands company, was incorporated on January 7, 2011 and holds the intellectual property rights relating to the
Rebel FC business. On October 28, 2014, SCA Capital became the wholly-owned subsidiary of Rebel FC.
We
are currently operating under the trade name “Rebel Fighting Championship.” We organize, promote and host MMA events
featuring top level athletic talent. With assistance from contracted production crews, we also produce and distribute, through
the internet and social media, and sell the rights to distribute to television stations, videos of its MMA events. We seek to
promote MMA in Asian countries through hosting events that attract talented fighters from all over the world.
The
Company started to operate and be engaged in the MMA business since June 2013. The principal activities of the Company in the
year 2014 were organizing and promoting MMA events in Singapore. As of December 31, 2014, our retained earnings were $49,069.
Our stockholders’ equity was $95,418.
Results
of Operations
For
the year ended December 31, 2014 compared with the year ended December 31, 2013
Gross
Revenues
The
Company received sales revenues of $619,275 in the year ended December 31, 2014 compared to $507,857 being generated in the year
ended December 31, 2013.
The
Company’s sales revenue of $619,275 in the year ended December 31, 2014 primarily comes from advertisement sponsorships
and ticket sales for the event held in Singapore, Battle Royale. In carrying out the event in Singapore, the Company incurred
cost of $282,619, the cost were primarily incurred by expense in advertisement, rental of event venue, and other miscellaneous
cost.
Operating
Expenses
Operating
expenses for the year ended December 31, 2014 and year ended December 31, 2013 were $325,189 and $149,610, respectively. The expenses
consisted of filing fees, professional fees, payroll and benefits and other general expenses.
We
expect that our general and administrative expenses will continue to increase as we incur additional costs to support the growth
of our business.
Net
Profit
Net
profit for the year ended December 31, 2014 and year ended December 31, 2013, were $10,739 and $59,685, respectively. Basic and
diluted net income (loss) per share amounted $0.21 and $1.19 respectively for the year ended December 31, 2014 and year ended
December 31, 2013.
The
decrease in net profit for the year ended December 31, 2014 compared to the year ended December 31, 2013 was due to an increase
in general expenses.
Liquidity
and Capital Resources
As
of December 31, 2014 we had working capital of ($97,977) consisting of cash on hand of $135,034 as compared to working capital
of $84,595 and cash on hand of $70,437 as of December 31, 2013.
Net
cash provided by (used in) operating activities for the year ended December 31, 2014 was $115,953 as compared to net cash used
in operating activities of ($34,679) for the year ended December 31, 2013. The cash used in operating activities are mainly for
filing fees, professional fees, payroll and benefits and general expenses.
The
increase of net cash for operating in the year ended December 31, 2014 was due to an increase of trade and other receivables.
Net
cash provided by (used in) investing activities for the year ended December 31, 2014 was ($54,469) as compared to net cash provided
by investing activities of ($192,314) for the year ended December 31, 2013.
Net
cash provided by financing activities for the year ended December 31, 2014 was $9,338 as compared to $295,660 for the year ended
December 31, 2013. The cash provided by financing activities for the year ended December 31, 2014 are mainly from bank loans.
We
will likely require additional capital to continue to operate our business, and to further expand our business. Sources of additional
capital through various financing transactions or arrangements with third parties may include equity or debt financing, bank loans
or revolving credit facilities. We may not be successful in locating suitable financing transactions in the time period required
or at all, and we may not obtain the capital we require by other means. Our inability to raise additional funds when required
may have a negative impact on our operations, business development and financial results.
Critical
Accounting Policies and Estimates
Use of
Estimates
The
preparation of financial statements in conformity with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure
of contingent liabilities at dates of the financial statements and the reported amounts of revenue and expenses during the periods.
Actual results could differ from these estimates. Our significant estimates and assumptions include depreciation and the fair
value of our stock, stock-based compensation, debt discount and the valuation allowance relating to the Company’s deferred
tax assets.
Recently
Issued Accounting Pronouncements
Reference is made to the “Recent
Accounting Pronouncements” in Note 2 to the Financial Statements included in this Report for information related to new
accounting pronouncement, none of which had a material impact on our combined financial statements, and the future adoption of
recently issued accounting pronouncements, which we do not expect will have a material impact on our combined financial statements.
Off-Balance
Sheet Arrangements
As
of December 31, 2014, we did not have any off-balance sheet arrangements.
Item
9.01 Financial Statement and Exhibits.
(a)
Financial Statements of Business Acquired. The financial statements of Rebel Holdings Limited are appended to this
Current Report beginning on page 6.
REBEL
HOLDINGS LIMITED
COMBINED
FINANCIAL STATEMENTS
FOR
THE YEARS ENDED DECEMBER 31, 2014 AND 2013
(Stated
in US Dollars)
INDEX
TO COMBINED FINANCIAL STATEMENTS
|
PAGES |
|
|
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM |
6 |
|
|
COMBINED BALANCE SHEETS |
7 |
|
|
COMBINED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME |
8 |
|
|
COMBINED STATEMENTS OF STOCKHOLDERS’ EQUITY |
9 |
|
|
COMBINED STATEMENTS OF CASH FLOWS |
10 |
|
|
NOTES TO COMBINED FINANCIAL STATEMENTS |
11 – 20 |
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To
the Board of Directors and Stockholders of
REBEL
HOLDINGS LIMITED
We
have audited the accompanying combined balance sheets of Rebel Holdings Limited (the “Company”), as of December 31,
2014 and 2013 and the related combined statements of operations, shareholders’ equity and other comprehensive income, and
cash flows, for the years ended December 31, 2014 and 2013. These combined financial statements are the responsibility of the
Company’s management. Our responsibility is to express an opinion on these combined financial statements based on our audits.
We
conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether the combined financial statements
are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures
in the combined financial statements, assessing the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our
opinion.
In
our opinion, these combined financial statements present fairly, in all material respects, the financial position of the Company
as of December 31, 2014 and 2013 and the results of its operations and their cash flows for the years ended December 31, 2014
and 2013 in conformity with accounting principles generally accepted in the United States of America.
/s/
Dominic K.F. Chan & Co
Dominic
K.F. Chan & Co
Certified
Public Accountants
Hong
Kong, March 30, 2015
REBEL
HOLDINGS LIMITED
COMBINED
BALANCE SHEETS
(Stated
in US Dollars)
| |
As
of
| |
| |
December
31, 2014
| | |
December
31, 2013
| |
ASSETS | |
| | |
| |
CURRENT ASSETS | |
| | |
| |
Cash and
cash equivalents | |
$ | 135,034 | | |
$ | 70,437 | |
Trade
and other receivables | |
| 14,734 | | |
| 204,917 | |
Total current assets | |
| 149,768 | | |
| 275,354 | |
Property and equipment,
net (Note 3) | |
| 64,463 | | |
| 83,125 | |
Intangible
assets | |
| 152,519 | | |
| 106,557 | |
TOTAL
ASSETS | |
$ | 366,750 | | |
$ | 465,036 | |
| |
| | | |
| | |
LIABILITIES
AND STOCKHOLDERS’ EQUITY | |
| | | |
| | |
CURRENT
LIABILITIES | |
| | | |
| | |
Bank loan - short term
portion (Note 4) | |
$ | 12,595 | | |
$ | - | |
Accruals and other payables | |
| 5,778 | | |
| 110,281 | |
Due to a shareholder (Note
5) | |
| 240,374 | | |
| 78,816 | |
Income
tax payables | |
| 1,593 | | |
| 1,662 | |
Total
current liabilities | |
| 247,745 | | |
| 190,759 | |
Bank
loan (Note 4) | |
| 23,587 | | |
| - | |
Total
liabilities | |
$ | 271,332 | | |
$ | 190,759 | |
| |
| | | |
| | |
STOCKHOLDERS’
EQUITY | |
| | | |
| | |
Capital stock (Note
6) | |
| 50,000 | | |
| 237,893 | |
Retained earnings | |
| 49,069 | | |
| 38,330 | |
Accumulated
other comprehensive income | |
| (3,651 | ) | |
| (1,946 | ) |
Total
stockholders’ equity | |
| 95,418 | | |
| 274,277 | |
TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY | |
$ | 366,750 | | |
$ | 465,036 | |
See
accompanying notes to combined financial statements
REBEL
HOLDINGS LIMITED
COMBINED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Stated
in US Dollars)
| |
For
the
year ended
December 31, 2014 | | |
For
the
year ended
December 31, 2013 | |
| |
| | |
| |
Revenues,
net | |
$ | 619,275 | | |
$ | 507,857 | |
| |
| | | |
| | |
Cost and expenses | |
| | | |
| | |
Cost of sales | |
| 282,619 | | |
| 296,877 | |
General and administrative
expenses | |
| 325,189 | | |
| 149,610 | |
Finance
costs | |
| 728 | | |
| - | |
Income
from operations | |
| 10,739 | | |
| 61,370 | |
| |
| | | |
| | |
Other
income | |
| - | | |
| - | |
Income
before income tax | |
| 10,739 | | |
| 61,370 | |
| |
| | | |
| | |
Income
tax expenses (Note 8) | |
| - | | |
| 1,685 | |
Net
income | |
| 10,739 | | |
| 59,685 | |
| |
| | | |
| | |
Foreign
currency translation adjustments | |
| (1,705 | ) | |
| (2,875 | ) |
Comprehensive
income | |
$ | 9,034 | | |
$ | 56,810 | |
| |
| | | |
| | |
Earnings per share (Note 7) | |
| | | |
| | |
| |
| | | |
| | |
Basic
and diluted income per common share of the Company | |
$ | 50,000 | | |
$ | 50,000 | |
| |
| | | |
| | |
Basic
and diluted weighted average common shares outstanding | |
| 0.21 | | |
| 1.19 | |
See
accompanying notes to combined financial statements
REBEL
HOLDINGS LIMITED
COMBINED
STATEMENTS OF STOCKHOLDERS’ EQUITY
(Stated
in US Dollars)
| |
| | |
| | |
| | |
| | |
Accumulated
| | |
| |
| |
Common
Stock
| | |
| | |
other
| | |
| |
| |
The
Company
| | |
Pure
Heart
| | |
Retained | | |
comprehensive
| | |
| |
| |
Shares
| | |
Amount
| | |
Amount
| | |
earnings
| | |
income
| | |
Total
| |
| |
| | |
| | |
| | |
| | |
| | |
| |
Balance,
January 1, 2013 | |
| - | | |
$ | - | | |
$ | 23,310 | | |
$ | (21,355 | ) | |
$ | 929 | | |
$ | 2,884 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Foreign
currency adjustment | |
| - | | |
| - | | |
| - | | |
| - | | |
| (2,875 | ) | |
| (2,875 | ) |
Issuance
of shares | |
| - | | |
| - | | |
| 214,583 | | |
| - | | |
| - | | |
| - | |
Net
income | |
| - | | |
| - | | |
| - | | |
| 59,685 | | |
| - | | |
| 59,685 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Balance,
December 31, 2013 | |
| - | | |
$ | - | | |
$ | 237,893 | | |
$ | 38,330 | | |
$ | (1,946 | ) | |
$ | 274,277 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Foreign
currency adjustment | |
| - | | |
| - | | |
| - | | |
| - | | |
| (1,705 | ) | |
| (1,705 | ) |
Eliminated
on combination | |
| - | | |
| - | | |
| (237,893 | ) | |
| - | | |
| - | | |
| (237,893 | ) |
Issuance
of shares | |
| 50,000 | | |
| 50,000 | | |
| - | | |
| - | | |
| - | | |
| 50,000 | |
Net
income | |
| - | | |
| - | | |
| - | | |
| 10,739 | | |
| - | | |
| 10,739 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Balance,
December 31, 2014 | |
| 50,000 | | |
$ | 50,000 | | |
$ | - | | |
$ | 49,069 | | |
$ | (3,651 | ) | |
$ | 95,418 | |
See
accompanying notes to combined financial statements
REBEL
HOLDINGS LIMITED
COMBINED
STATEMENTS OF CASH FLOWS
(Stated
in US Dollars)
| |
For
the
year ended
December 31, 2014 | | |
For
the
year ended
December 31, 2013 | |
Cash flows from operating
activities: | |
| | |
| |
Net
income | |
$ | 10,739 | | |
$ | 59,685 | |
Adjustments to reconcile
net income to net cash provided by (used in) operating activities: | |
| | | |
| | |
Depreciation of
equipment | |
| 19,797 | | |
| - | |
Changes
in assets and liabilities: | |
| | | |
| | |
Trade
and other receivables | |
| 189,820 | | |
| (207,760 | ) |
Accruals
and other payables | |
| (104,403 | ) | |
| 111,811 | |
Income
tax payables | |
| - | | |
| 1,685 | |
Net
cash provided by (used in) operating activities | |
| 115,953 | | |
| (34,579 | ) |
| |
| | | |
| | |
Cash
flows from investing activities: | |
| | | |
| | |
Purchases of equipment | |
| (3,882 | ) | |
| (84,278 | ) |
Purchases
of intangible assets | |
| (52,587 | ) | |
| (108,036 | ) |
Net
cash used in investing activities | |
| (56,469 | ) | |
| (192,314 | ) |
| |
| | | |
| | |
Cash
flows from financing activities: | |
| | | |
| | |
Proceeds from share issuance | |
| 7,893 | | |
| 215,751 | |
Bank loan borrowing | |
| 37,789 | | |
| - | |
Bank loan repayment | |
| (1,674 | ) | |
| - | |
Due
to a shareholder | |
| (34,670 | ) | |
| 79,909 | |
Net
cash provided by investing activities | |
| 9,338 | | |
| 295,660 | |
| |
| | | |
| | |
Effect of exchange rate
changes on cash | |
| (4,225 | ) | |
| (1,033 | ) |
| |
| | | |
| | |
Increase in cash and
cash equivalents | |
| 64,597 | | |
| 67,734 | |
| |
| | | |
| | |
Cash and cash equivalents
at beginning of year | |
| 70,438 | | |
| 2,704 | |
| |
| | | |
| | |
Cash
and cash equivalents at end of year | |
$ | 135,035 | | |
$ | 70,438 | |
| |
| | | |
| | |
Supplemental disclosures
of cash flow information: | |
| | | |
| | |
Interest
paid | |
$ | 728 | | |
$ | - | |
Tax
paid | |
$ | - | | |
$ | - | |
See
accompanying notes to combined financial statements
REBEL
HOLDINGS LIMITED
NOTES
TO COMBINED FINANCIAL STATEMENTS
(Stated
in US Dollars)
| 1. | Organization
and nature of operations |
Rebel
Holdings Limited (“Rebel FC,” together with Pure Heart Entertainment Ptd Ltd., and SCA Capital Limited, the “Company”),
which utilizes the trade name of Rebel Fighting Championship, was incorporated on October 28, 2014 in British Virgin Islands and
engages in hosting and promoting MMA events since its corporation.
Pure
Heart Entertainment Pte Ltd. (“Pure Heart”) was incorporated under the laws of the Singapore on August 24, 2000 under
the name “Sook Kee Coffeeshop Pte. Ltd.” Effective on November 27, 2002, it changed its name to “Asia Pacific
Export International Pte Ltd.” It later changed its name from “Asia Pacific Export International Pte Ltd.” to
“Pure Heart Entertainment Pte Ltd.” on June 7, 2013. As of October 30, 2014, it became a wholly owned subsidiary of
Rebel FC. Pure Heart is an operating subsidiary of the Company and is dedicated to hosting and promoting mixed martial arts (“MMA”)
events.
SCA Capital Limited (“SCA
Capital”), a British Virgin Islands company, was incorporated on January 7, 2011 and holds the intellectual property rights
relating to the Rebel FC business. On October 28, 2014, SCA Capital became the wholly-owned subsidiary of Rebel FC.
The
Company organizes, promotes and hosts MMA events featuring top level athletic talent. With assistance from contracted production
crews, the Company also produces and distributes, through the internet and social media, and sells the rights to distribute to
television stations, videos of its MMA events. The Company seeks to promote MMA in Asian countries through hosting events that
attract talented fighters from all over the world.
| 2. | Summary
of principal accounting policies |
Basis
of presentation
The accompanying combined
financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United
States of America and reflect the activities of the following subsidiaries. All material intercompany transactions and balances
have been eliminated in the combination.
Transactions between entities
under common control are accounted for in accordance with the guidance on common control transactions in ASC 805-50. Thus, the
financial statements of the commonly controlled entities would be combined, retrospectively, as if the transaction had occurred
at the beginning of the period.
Revenue
recognition
Revenue
are recognized when persuasive evidence of an arrangement exists; delivery has occurred or services have been rendered; the price
is fixed or determinable; and collectability is reasonably assured.
Use
of estimates
The
preparation of the combined financial statements in conformity with generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets
and liabilities at the date of the combined financial statements, and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Cash
and cash equivalents
The
Company considers all short-term highly liquid investments that are readily convertible to known amounts of cash and have original
maturities of three months or less to be cash equivalents.
REBEL
HOLDINGS LIMITED
NOTES
TO COMBINED FINANCIAL STATEMENTS
(Stated
in US Dollars)
| 2. | Summary
of principal accounting policies (Continued) |
Fair
value of financial instruments
The
carrying values of the Company’s financial instruments, including cash and cash equivalents, trade and other receivables,
deposits, trade and other payables approximate their fair values due to the short-term maturity of such instruments. The carrying
amounts of borrowings approximate their fair values because the applicable interest rates approximate current market rates.
Income
taxes
The
Company utilizes FASB Accounting Standard Codification Topic 740 (“ASC 740”) “Income taxes” (formerly
known as SFAS No. 109, "Accounting for Income Taxes"), which requires the recognition of deferred tax assets and liabilities
for the expected future tax consequences of events that have been included in the combined financial statements or tax returns.
Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax
bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory
tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established,
when necessary, to reduce deferred tax assets to the amount expected to be realized.
ASC
740 “Income taxes” (formerly known as Interpretation No. 48, Accounting for Uncertainty in Income Taxes, an interpretation
of Statement of Financial Accounting Standards No. 109 (“FIN 48”)) clarifies the accounting for uncertainty in
tax positions. This interpretation requires that an entity recognizes in the combined financial statements the impact of a tax
position, if that position is more likely than not of being sustained upon examination, based on the technical merits of the position.
Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes
in recognition or measurement are reflected in the period in which the change in judgement occurs. The Company has elected to
classify interest and penalties related to unrecognized tax benefits, if and when required, as part of income tax expense in the
combined statements of operations. The adoption of ASC 740 did not have a significant effect on the combined financial statements.
Earnings
per share
Basic
earnings per share is based on the weighted average number of common shares outstanding during the period while the effects of
potential common shares outstanding during the period are included in diluted earnings per share. The average market
price during the year is used to compute equivalent shares.
FASB
Accounting Standard Codification Topic 260 (“ASC 260”), “Earnings Per Share,” requires that employee equity
share options, non-vested shares and similar equity instruments granted to employees be treated as potential common shares in
computing diluted earnings per share. Diluted earnings per share should be based on the actual number of options or shares granted
and not yet forfeited, unless doing so would be anti-dilutive. The Company uses the “treasury stock” method for equity
instruments granted in share-based payment transactions provided in ASC 260 to determine diluted earnings per share.
REBEL
HOLDINGS LIMITED
NOTES
TO COMBINED FINANCIAL STATEMENTS
(Stated
in US Dollars)
| 2. | Summary
of principal accounting policies (Continued) |
Plant
and equipment
Plant
and equipment are recorded at cost. Significant additions or improvements extending useful lives of assets are capitalized. Maintenance
and repairs are charged to expense as incurred. Depreciation is computed using the straight-line method over the estimated useful
lives as follows:
Equipment
3
- 5 years
Intangible
assets
Intangible
assets are cost of record master and website. They are carried at cost and not amortized. The Company reviews identifiable amortizable
intangible assets to be held and used for impairment whenever events or changes in circumstances indicate that the carrying value
of the assets may not be recoverable. Determination of recoverability is based on the lowest level of identifiable estimated undiscounted
cash flows resulting from use of the asset and its eventual disposition. Measurement of any impairment loss is based on the excess
of the carrying value of the asset over its fair value.
Website
development costs
The
Company recognized the costs associated with developing a website in accordance with ASC 350-50 “Website Development Cost”
that codified the American Institute of Certified Public Accountants (“AICPA”) Statement of Position (“SOP”)
NO. 98-1, “Accounting for the Costs of Computer Software Developed or Obtained for Internal Use”. Relating to website
development costs the Company follows the guidance pursuant to the Emerging Issues Task Force (EITF) NO. 00-2, “Accounting
for Website Development Costs”. The website development costs are divided into three stages, planning, development and production.
The development stage can further be classified as application and infrastructure development, graphics development and content
development. In short, website development cost for internal use should be capitalized except content input and data conversion
costs in content development stage.
Costs
associated with the website consist primarily of website development costs paid to third parties. These capitalized costs will
be amortized based on their estimated useful life over three years upon the website becoming operational. Internal costs related
to the development of website content will be charged to operations as incurred. Web-site development costs related to the customers
are charged to cost of sales.
Comprehensive
income
The
Company has adopted FASB Accounting Standard Codification Topic 220 (“ASC 220”) “Comprehensive income”
(formerly known as SFAS No. 130, “Reporting Comprehensive Income”), which establishes standards for reporting and
display of comprehensive income, its components and accumulated balances. Accumulated other comprehensive income represents the
accumulated balance of foreign currency translation adjustments of the Company.
REBEL
HOLDINGS LIMITED
NOTES
TO COMBINED FINANCIAL STATEMENTS
(Stated
in US Dollars)
| 2. | Summary
of principal accounting policies (continued) |
Recently
issued accounting pronouncements
The
FASB has issued Accounting Standards Update (ASU) No. 2014-06, Technical Corrections and Improvements Related to Glossary Terms.
The amendments in this ASU relate to glossary terms and cover a wide range of Topics in the FASB’s Accounting Standards
Codification™ (Codification). These amendments are presented in four sections:
1.
Deletion of Master Glossary Terms (Section A) arising because of terms that were carried forward from source literature (e.g.,
FASB Statements, EITF Issues, and so forth) to the Codification but were not utilized in the Codification.
2.
Addition of Master Glossary Term Links (Section B) arising from Master Glossary terms whose links did not carry forward to the
Codification.
3.
Duplicate Master Glossary Terms (Section C) arising from Master Glossary terms that appear multiple times in the Master Glossary
with similar, but not identical, definitions.
4.
Other Technical Corrections Related to Glossary Terms (Section D) arising from miscellaneous changes to update Master Glossary
terms.
The
amendments do not have transition guidance and are effective upon issuance for both public entities and nonpublic entities.
The
FASB has issued Accounting Standards Update (ASU) No. 2014-08, Presentation of Financial Statements (Topic 205) and Property,
Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. The
amendments in the ASU change the criteria for reporting discontinued operations while enhancing disclosures in this area. It also
addresses sources of confusion and inconsistent application related to financial reporting of discontinued operations guidance
in U.S. GAAP.
Under
the new guidance, only disposals representing a strategic shift in operations should be presented as discontinued operations.
Those strategic shifts should have a major effect on the organization’s operations and financial results. Examples include
a disposal of a major geographic area, a major line of business, or a major equity method investment.
In
addition, the new guidance requires expanded disclosures about discontinued operations that will provide financial statement users
with more information about the assets, liabilities, income, and expenses of discontinued operations.
The
new guidance also requires disclosure of the pre-tax income attributable to a disposal of a significant part of an organization
that does not qualify for discontinued operations reporting. This disclosure will provide users with information about the ongoing
trends in a reporting organization’s results from continuing operations.
REBEL
HOLDINGS LIMITED
NOTES
TO COMBINED FINANCIAL STATEMENTS
(Stated
in US Dollars)
| 2. | Summary
of principal accounting policies (Continued) |
Recently
issued accounting pronouncements (Continued)
The
amendments in this ASU enhance convergence between U.S. GAAP and International Financial Reporting Standards (IFRS). Part of the
new definition of discontinued operation is based on elements of the definition of discontinued operations in IFRS 5, Non-Current
Assets Held for Sale and Discontinued Operations.
The
amendments in the ASU are effective in the first quarter of 2015 for public organizations with calendar year ends. For most nonpublic
organizations, it is effective for annual combined financial statements with fiscal years beginning on or after December 15, 2014.
Early adoption is permitted.
The
FASB has issued Accounting Standards Update (ASU) No. 2014-12, Compensation – Stock Compensation (Topic 718): Accounting
for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service
Period. The issue is the result of a consensus of the FASB Emerging Issues Task Force.
The
amendments in the ASU require that a performance target that affects vesting and that could be achieved after the requisite service
period be treated as a performance condition. A reporting entity should apply existing guidance in Topic 718, Compensation –
Stock Compensation, as it relates to awards with performance conditions that affect vesting to account for such awards. The performance
target should not be reflected in estimating the grant-date fair value of the award. Compensation cost should be recognized in
the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost
attributable to the period(s) for which the requisite service has already been rendered. If the performance target becomes probable
of being achieved before the end of the requisite service period, the remaining unrecognized compensation cost should be recognized
prospectively over the remaining requisite service period. The total amount of compensation cost recognized during and after the
requisite service period should reflect the number of awards that are expected to vest and should be adjusted to reflect those
awards that ultimately vest. The requisite service period ends when the employee can cease rendering service and still be eligible
to vest in the award if the performance target is achieved.
The
amendments in this ASU are effective for annual periods and interim periods within those annual periods beginning after December
15, 2015. Earlier adoption is permitted. The effective date is the same for both public business entities and all other entities.
Entities
may apply the amendments in this ASU either: (a) prospectively to all awards granted or modified after the effective date; or
(b) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period
presented in the combined financial statements and to all new or modified awards thereafter. If retrospective transition is adopted,
the cumulative effect of applying this ASU as of the beginning of the earliest annual period presented in the combined financial
statements should be recognized as an adjustment to the opening retained earnings balance at that date. In addition, if retrospective
transition is adopted, an entity may use hindsight in measuring and recognizing the compensation cost.
REBEL
HOLDINGS LIMITED
NOTES
TO COMBINED FINANCIAL STATEMENTS
(Stated
in US Dollars)
| 2. | Summary
of principal accounting policies (Continued) |
Recently
issued accounting pronouncements (Continued)
The
FASB has issued Accounting Standards Update (ASU) No. 2014-13, Consolidation (Topic 810): Measuring the Financial Assets and the
Financial Liabilities of a Consolidated Collateralized Financing Entity. The amendments in this ASU will apply to a reporting
entity that is required to consolidate a collateralized financing entity under the Variable Interest Entities guidance when: (1)
the reporting entity measures all of the financial assets and the financial liabilities of that combined collateralized financing
entity at fair value in the combined financial statements based on other Codification Topics; and (2) the changes in the fair
values of those financial assets and financial liabilities are reflected in earnings.
The
amendments in this ASU are effective for public business entities for annual periods, and interim periods within those annual
periods, beginning after December 15, 2015. For entities other than public business entities, the amendments are effective for
annual periods ending after December 15, 2016, and interim periods beginning after December 15, 2016. Early adoption is permitted
as of the beginning of an annual period.
The
fair value of the financial assets of a collateralized financing entity, as determined under GAAP, may differ from the fair value
of its financial liabilities even when the financial liabilities have recourse only to the financial assets. Before this ASU,
there was no specific guidance in GAAP on how a reporting entity should account for that difference.
The
amendments in this ASU provide an alternative to Topic 820 Fair Value Measurement for measuring the financial assets and the financial
liabilities of a combined collateralized financing entity to eliminate that difference. When the measurement alternative is not
elected for a combined collateralized financing entity within the scope of this ASU, the amendments clarify that: (1) the fair
value of the financial assets and the fair value of the financial liabilities of the combined collateralized financing entity
should be measured using the requirements of Topic 820; and (2) any differences in the fair value of the financial assets and
the fair value of the financial liabilities of that combined collateralized financing entity should be reflected in earnings and
attributed to the reporting entity in the combined statement of income (loss).
The
Financial Accounting Standards Board (FASB) has issued Accounting Standards Update (ASU) No. 2014-15, Presentation of Financial
Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a
Going Concern. ASU 2014-15 is intended to define management’s responsibility to evaluate whether there is substantial doubt
about an organization’s ability to continue as a going concern and to provide related footnote disclosures.
Under
Generally Accepted Accounting Principles (GAAP), combined financial statements are prepared under the presumption that the reporting
organization will continue to operate as a going concern, except in limited circumstances. Financial reporting under this presumption
is commonly referred to as the going concern basis of accounting. The going concern basis of accounting is critical to financial
reporting because it establishes the fundamental basis for measuring and classifying assets and liabilities.
REBEL
HOLDINGS LIMITED
NOTES
TO COMBINED FINANCIAL STATEMENTS
(Stated
in US Dollars)
| 2. | Summary
of principal accounting policies (Continued) |
Recently
issued accounting pronouncements (Continued)
Currently,
GAAP lacks guidance about management’s responsibility to evaluate whether there is substantial doubt about the organization’s
ability to continue as a going concern or to provide related footnote disclosures.
This
ASU provides guidance to an organization’s management, with principles and definitions that are intended to reduce diversity
in the timing and content of disclosures that are commonly provided by organizations today in the financial statement footnotes.
The
amendments are effective for annual periods ending after December 15, 2016, and interim periods within annual periods beginning
after December 15, 2016. Early application is permitted for annual or interim reporting periods for which the combined financial
statements have not previously been issued.
|
| |
As
of | |
|
| |
December
31, 2014 | | |
December
31, 2013 | |
|
| |
| | |
| |
|
Equipment | |
$ | 84,260 | | |
$ | 83,125 | |
|
Less: accumulated
depreciation | |
| 19,797 | | |
| - | |
|
Total
property and equipment, net | |
$ | 64,463 | | |
$ | 83,125 | |
The
depreciation expenses for the years ended December 31, 2014 and 2013 were $19,797 and nil, respectively.
|
| |
As
of | |
|
| |
December
31, 2014 | | |
December
31, 2013 | |
|
| |
| | |
| |
|
Repayable
within one year | |
$ | 12,595 | | |
$ | - | |
|
Repayable
after one year | |
| 23,587 | | |
| - | |
|
Total
bank loan | |
$ | 36,182 | | |
$ | - | |
The
interest expenses for the years ended December 31, 2014 and 2013 were $728 and nil, respectively.
On
August 15, 2014, Pure Heart and DBS Bank entered into a banking facility (the “Banking Facility”), pursuant to which
DBS Bank disbursed Singapore dollar $50,000 to Pure Heart for working capital. The interest rate of the loan is 6.00% per annum
on monthly outstanding balance. The term for the banking facility is three years. Pure Heart shall repay in 36 installments for
Singapore dollar $1,522 each month. Mr. Leong Khian Kiee and Mr. Leong Aan Yee, Justin, the directors of Pure Heart personally
guaranteed the Banking Facility jointly and severally.
REBEL
HOLDINGS LIMITED
NOTES
TO COMBINED FINANCIAL STATEMENTS
(Stated
in US Dollars)
As
of December 31, 2014 and December 31, 2013, the due to shareholder is $240,374 and $78,816 respectively. The amount is unsecured,
interest free and has no fixed terms of repayment.
The
authorized capital of Rebel FC consists of 50,000 ordinary shares, par value $1.00 per share, with 50,000 shares of ordinary shares
issued and outstanding. The Company issued 25,000 shares and 25,000 shares respectively of $1.00 each of the common stock on October
28, 2014 to Mr. Leong Aan Yee, Justin (Justin) and Mr. Leong Khian Kiee (K. K.) for cash. As of October 30, 2014, Justin and K.
K. have transferred all of their shares to Total Glory International Limited for the total consideration of $50,000.
The
paid in capital of Pure Heart consists of 300,000 shares of common stock, par value Singapore dollar $1.00 per share, with 300,000
shares of common stock issued and outstanding. Prior to December 28, 2013, Mr. Leong Aan Yee, Justin and Mr. Leong Khian Kiee
held 15,000 shares and 15,000 shares respectively. On December 28, 2013, the Company issued 210,000 shares and 60,000 shares respectively
at 1 Singapore dollar per share to Justin and K. K. for cash, respectively. As of October 30, 2014, Justin and K. K. have transferred
all of their shares to Rebel FC for the consideration of 1 Singapore dollar per share. Thereafter, Pure Heart became the wholly
owned subsidiary of Rebel FC.
The
authorized capital of SCA Capital is 50,000 ordinary shares, at no par value, with 10,000 shares of ordinary shares issued and
outstanding.
There
are no warrants or options outstanding to acquire any additional shares of common stock of the Company.
|
| |
For
the years ended
December 31, | |
|
| |
2014 | | |
2013 | |
|
| |
| | |
| |
|
Net
income attributable to ordinary shareholders for computing basic net loss per common share | |
$ | 10,739 | | |
$ | 59,685 | |
|
| |
| | | |
| | |
|
Weighted-average
shares of common stock outstanding in computing net loss per common stock of the Company | |
| | | |
| | |
|
Basic | |
| 50,000 | | |
| 50,000 | |
|
Dilutive
shares | |
| - | | |
| - | |
|
Diluted | |
| 50,000 | | |
| 50,000 | |
|
| |
| | | |
| | |
|
Basic
earnings per share | |
$ | 0.21 | | |
$ | 1.19 | |
|
Diluted
earnings per share | |
$ | 0.21 | | |
$ | 1.19 | |
REBEL
HOLDINGS LIMITED
NOTES
TO COMBINED FINANCIAL STATEMENTS
(Stated
in US Dollars)
Rebel
FC and SCA Capital are incorporated in the British Virgin Islands and are not subject to income taxes under the current laws of
the British Virgin Islands.
Pure
Heart was incorporated in Singapore and is subject to Singapore corporate income tax at 17%. The following is the reconciliation
between income before income taxes and income tax expenses:
|
| |
For
the years ended
December 31, | |
|
| |
2014 | | |
2013 | |
|
| |
| | |
| |
|
Income
before income taxes | |
$ | 10,739 | | |
$ | 61,370 | |
|
Income
tax computed at statutory Corporate Income Tax rate (17%) | |
| 2,685 | | |
| 15,343 | |
|
Exempt
income and others | |
| (2,685 | ) | |
| (13,658 | ) |
|
| |
| | | |
| | |
|
Income
tax expenses | |
$ | - | | |
$ | 1,685 | |
|
8. |
Commitments and contingencies |
Operating
Lease
Significant
commitment as at December 31, 2014 are as follows:
|
Twelve months ended December 31, | |
| |
|
2015 | |
$ | 30,079 | |
|
2016 | |
| 2,423 | |
|
2017 | |
| - | |
|
Thereafter | |
| - | |
|
Total
minimum lease payments | |
$ | 32,502 | |
Legal
Proceeding
There
has been no legal proceeding in which the Company is a party for the year ended December 31, 2014.
REBEL
HOLDINGS LIMITED
NOTES
TO COMBINED FINANCIAL STATEMENTS
(Stated
in US Dollars)
On
January 30, 2015, Rebel Group, Inc. (“REBL”), a Florida corporation completed the acquisition of the Company pursuant
to the Share Exchange Agreement. The acquisition was accounted for as a reverse merger and recapitalization effected by a Share
Exchange Transaction. The Company is considered the acquirer for accounting and financial reporting purposes. The assets and liabilities
of the acquired entity have been brought forward at their book value and no goodwill has been recognized. As a result of the share
exchange transaction, Rebel FC, together with its subsidiaries, Pure Heart and SCA Capital, became REBL’s wholly-owned subsidiaries.
There
were no events or transactions other than those disclosed in this report, if any, that would require recognition or disclosure
in our combined financial statements for the year ended December 31, 2014.
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
|
REBEL GROUP, INC. |
|
|
Date: March 30, 2015 |
By: |
/s/
Aan Yee Leong, Justin |
|
|
Aan Yee Leong, Justin |
|
|
Chief Executive Officer |
21
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