UNITED STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-Q/A
AMENDMENT
NO. 1 TO FORM 10-Q
(Mark One)
x QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly
period ended June 30, 2015
or
o TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition
period from __________________ to __________________
Commission File
Number: 333-177786
REBEL
GROUP, INC.
(Exact name
of registrant as specified in its charter)
Florida |
|
45-3360079 |
(State or other jurisdiction of |
|
(I.R.S. Employer |
incorporation or organization) |
|
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)
Not Applicable
(Former name,
former address and former fiscal year, if changed since last report)
Indicate
by check mark whether the registrant (1) has 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 o
Indicate
by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o
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 |
Smaller reporting company |
x |
(Do not check if smaller reporting company) |
|
|
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes o No x
As of August 14, 2015, the registrant
had 238,000,118 shares of common stock, par value $.0001 per share, issued and outstanding.
EXPLANATION
NOTE
This Amendment No. 1 to the Quarterly
Report on Form 10-Q/A of Rebel Group, Inc. (the “Company”) for the six months ended June 30, 2015 is being filed to
include additional information in Item 4 in Part I of the Company’s Form 10-Q for the six months ended June 30, 2015 which
was filed with the Securities and Exchange Commission on August 14, 2015 (the “Form 10-Q”).
Except as described above, no other parts
of the Form 10-Q are being amended.
TABLE OF
CONTENTS
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Page No. |
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PART I – FINANCIAL INFORMATION |
|
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Item 1. |
Financial Statements |
3 |
|
|
|
|
Balance Sheets as of June 30, 2015 (Unaudited) and December 31, 2014 |
4 |
|
|
|
|
Unaudited Statements of Operations for the Six Months Ended June 30, 2015 and 2014 |
5 |
|
|
|
|
Unaudited Statements of Stockholders’ Equity as of June 30, 2015 |
6 |
|
|
|
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Unaudited Statements of Cash Flows for the Six Months Ended June 30, 2015 and 2014 |
7 |
|
|
|
|
Notes to Financial Statements (unaudited) |
8 |
|
|
|
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations. |
19 |
|
|
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Item 3. |
Quantitative and Qualitative Disclosures About Market Risk. |
21 |
|
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Item 4. |
Controls and Procedures. |
22 |
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PART II – OTHER INFORMATION |
|
|
|
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Item 1. |
Legal Proceedings. |
23 |
|
|
|
Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds. |
23 |
|
|
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Item 3. |
Defaults Upon Senior Securities. |
23 |
|
|
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Item 4. |
Mine Safety Disclosures |
23 |
|
|
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Item 6. |
Exhibits. |
23 |
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Signatures |
24 |
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|
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Certifications |
|
PART
I – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
REBEL GROUP, INC.
UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2015 AND 2014
(Stated in US Dollars)
INDEX TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
|
PAGES |
|
|
UNAUDITED CONSOLIDATED BALANCE SHEETS |
4 |
|
|
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME |
5 |
|
|
UNAUDITED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY |
6 |
|
|
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS |
7 |
|
|
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS |
8 – 15 |
REBEL GROUP, INC.
UNAUDITED CONSOLIDATED BALANCE SHEETS
(Stated in US Dollars)
| |
As of | |
| |
June
30,
2015 | | |
December 31, 2014 | |
ASSETS | |
| | |
| |
CURRENT ASSETS | |
| | |
| |
Cash and cash equivalents | |
$ | 36,009 | | |
$ | 135,034 | |
Trade and other receivables | |
| 663,499 | | |
| 14,734 | |
Note receivable (Note 3) | |
| 7,782,000 | | |
| - | |
Total current assets | |
| 8,481,508 | | |
| 149,768 | |
Property and equipment, net (Note 4) | |
| 53,999 | | |
| 64,463 | |
Intangible assets | |
| 149,782 | | |
| 152,519 | |
TOTAL ASSETS | |
$ | 8,685,289 | | |
$ | 366,750 | |
| |
| | | |
| | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | |
| | | |
| | |
CURRENT LIABILITIES | |
| | | |
| | |
Bank loan – short term portion (Note 5) | |
$ | 16,814 | | |
$ | 12,595 | |
Accruals and other payables | |
| 12,245 | | |
| 5,778 | |
Due to a shareholder (Note 6) | |
| 679,833 | | |
| 227,779 | |
Income tax payables | |
| - | | |
| 1,593 | |
Total current liabilities | |
| 708,892 | | |
| 247,745 | |
Bank loan (Note 5) | |
| 13,996 | | |
| 23,587 | |
Total liabilities | |
$ | 722,888 | | |
$ | 271,332 | |
| |
| | | |
| | |
STOCKHOLDERS’ EQUITY | |
| | | |
| | |
Capital stock (Note 7) | |
| | | |
| | |
Common stock:$0.0001 par value; 23,000,118 shares issued and outstanding* | |
| 2,300 | | |
| 2,300 | |
Additional paid-in capital | |
| 47,700 | | |
| 47,700 | |
Retained earnings | |
| 7,914,101 | | |
| 49,069 | |
Accumulated other comprehensive income | |
| (1,700 | ) | |
| (3,651 | ) |
Total stockholders’ equity | |
| 7,962,401 | | |
| 95,418 | |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | |
$ | 8,685,289 | | |
$ | 366,750 | |
*The number of shares of common stock
has been retroactively restated to reflect the 1-for-5 reverse stock split effected on July 9, 2014, and reflect the 1-for-20 reverse
stock split of its issued and outstanding common stock effected on December 5, 2014.
See accompanying notes to unaudited consolidated financial
statements
REBEL GROUP, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME
(Stated in US Dollars)
| |
For the | | |
For the | | |
For the | | |
For the | |
| |
Three
Months | | |
Three
Months | | |
Six
Months | | |
Six
Months | |
| |
Ended | | |
Ended | | |
Ended | | |
Ended | |
| |
June 30, | | |
June 30, | | |
June 30, | | |
June 30, | |
| |
2015 | | |
2014 | | |
2015 | | |
2014 | |
| |
| | |
| | |
| | |
| |
Revenues, net | |
$ | 348,313 | | |
$ | - | | |
$ | 348,470 | | |
$ | - | |
| |
| | | |
| | | |
| | | |
| | |
Cost and expenses | |
| | | |
| | | |
| | | |
| | |
Cost of sales | |
| 7,893 | | |
| - | | |
| 24,205 | | |
| - | |
Depreciation and amortization expenses | |
| 4,561 | | |
| 5,075 | | |
| 9,292 | | |
| 9,930 | |
General and administrative expenses | |
| 147,364 | | |
| 139,527 | | |
| 261,710 | | |
| 169,216 | |
Finance costs | |
| 1,396 | | |
| - | | |
| 2,625 | | |
| - | |
Income/ (loss) from operations | |
| 187,099 | | |
| (144,602 | ) | |
| 50,638 | | |
| (179,146 | ) |
| |
| | | |
| | | |
| | | |
| | |
Other income | |
| - | | |
| | | |
| - | | |
| | |
Gain on disposal of a subsidiary | |
| - | | |
| - | | |
| 6,782,000 | | |
| - | |
Interest income | |
| 19,602 | | |
| - | | |
| 32,394 | | |
| - | |
Total other income | |
| 19,602 | | |
| - | | |
| 6,814,394 | | |
| - | |
| |
| | | |
| | | |
| | | |
| | |
Income tax expenses | |
| - | | |
| - | | |
| - | | |
| - | |
Net income/ (loss) | |
| 206,701 | | |
| (144,602 | ) | |
| 6,865,032 | | |
| (179,146 | ) |
| |
| | | |
| | | |
| | | |
| | |
Foreign currency translation adjustments | |
| (3,709 | ) | |
| - | | |
| 1,951 | | |
| - | |
Comprehensive income/ (loss) | |
$ | 202,992 | | |
$ | (144,602 | ) | |
$ | 6,866,983 | | |
$ | (179,146 | ) |
| |
| | | |
| | | |
| | | |
| | |
Earnings per share (Note 8) | |
| | | |
| | | |
| | | |
| | |
| |
| | | |
| | | |
| | | |
| | |
Basic and diluted loss per common share | |
$ | 23,000,118 | | |
$ | 20,700,000 | | |
$ | 23,000,118 | | |
$ | 20,700,000 | |
| |
| | | |
| | | |
| | | |
| | |
Basic and diluted weighted average common shares outstanding | |
| 0.01 | | |
| (0.01 | ) | |
| 0.30 | | |
| (0.01 | ) |
*The number of shares of common stock
has been retroactively restated to reflect the 1-for-5 reverse stock split effected on July 9, 2014, and reflect the 1-for-20
reverse stock split of its issued and outstanding common stock effected on December 5, 2014.
See accompanying notes to unaudited consolidated
financial statements
REBEL GROUP, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’EQUITY
(Stated in US Dollars)
| |
Common Stock | | |
| | |
Accumulated | | |
| |
| |
The Company | | |
Additional
Paid-in | | |
Pure
Heart | | |
Retained | | |
other
comprehensive
| | |
| |
| |
Shares | | |
Amount | | |
capital | | |
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 | | |
| - | | |
| - | | |
| 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 | |
| 23,000,118 | | |
| 2,300 | | |
| 47,700 | | |
| - | | |
| - | | |
| - | | |
| 50,000 | |
Net income | |
| - | | |
| - | | |
| - | | |
| - | | |
| 10,739 | | |
| - | | |
| 10,739 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Balance, December 31, 2014 | |
| 23,000,118 | | |
$ | 2,300 | | |
$ | 47,700 | | |
$ | - | | |
$ | 49,069 | | |
$ | (3,651 | ) | |
$ | 95,418 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net income | |
| - | | |
| - | | |
| - | | |
| - | | |
| 6,865,032 | | |
| - | | |
| 6,865,032 | |
Reverse acquisition | |
| - | | |
| - | | |
| - | | |
| - | | |
| 1,000,000 | | |
| - | | |
| 1,000,000 | |
Foreign currency adjustment | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 1,951 | | |
| 1,951 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Balance, June 30, 2015 | |
| 23,000,118 | | |
$ | 2,300 | | |
$ | 47,700 | | |
$ | - | | |
$ | 7,914,101 | | |
$ | (1,700 | ) | |
$ | 7,962,401 | |
*The number of shares of common stock
has been retroactively restated to reflect the 1-for-5 reverse stock split effected on July 9, 2014, and reflect the 1-for-20 reverse
stock split of its issued and outstanding common stock effected on December 5, 2014.
See accompanying notes to unaudited consolidated
financial statements
REBEL GROUP, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF CASH
FLOWS,
(Stated in US Dollars)
| |
Six Months | | |
Six Months | |
| |
Ended
| | |
Ended | |
| |
June 30,
2015 | | |
June 30,
2014 | |
Cash flows from operating activities: | |
| | |
| |
Net income/ (loss) | |
$ | 6,865,032 | | |
$ | (179,146 | ) |
Adjustments to reconcile net income to net cash provided by/ (used in) operating activities: | |
| | | |
| | |
Depreciation and amortization expense | |
| 9,292 | | |
| 9,930 | |
Gain on disposal of subsidiaries | |
| (6,782,000 | ) | |
| - | |
| |
| 92,324 | | |
| (169,216 | ) |
Changes in operating assets and liabilities: | |
| | | |
| | |
Increase in trade and other receivables | |
| (648,764 | ) | |
| (203,207 | ) |
Increase in accruals and other payables | |
| 6,467 | | |
| 11,694 | |
Increase in income tax payables | |
| 1,593 | | |
| - | |
Net cash used in operating activities | |
| (548,380 | ) | |
| (360,729 | ) |
| |
| | | |
| | |
Cash flows from financing activities: | |
| | | |
| | |
Bank loan repayment | |
| (5,372 | ) | |
| - | |
Due to a shareholder | |
| 452,054 | | |
| 341,258 | |
Net cash provided by financing activities | |
| 446,682 | | |
| 341,258 | |
| |
| | | |
| | |
Effect of foreign currency translation | |
| 2,673 | | |
| 2,662 | |
Decrease in cash and cash equivalents | |
| (101,698 | ) | |
| (19,471 | ) |
Cash and cash equivalents at beginning of year | |
| 135,034 | | |
| 70,437 | |
Cash and cash equivalents at end of year | |
$ | 36,009 | | |
$ | 53,628 | |
| |
| | | |
| | |
Supplemental cash flow disclosures: | |
| | | |
| | |
Cash paid for interest expense | |
$ | 2,052 | | |
$ | - | |
Cash paid for income taxes | |
$ | - | | |
$ | - | |
See accompanying notes to unaudited consolidated
financial statements
REBEL
GROUP, INC.
NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Stated
in US Dollars)
| 1. | Organization
and nature of operations |
Rebel
Group, Inc. (f/k/a Inception Technology Group, Inc., the “Company”) was incorporated under the laws of the State of
Florida on September 13, 2011. The Company organizes, promotes and hosts mixed martial arts (“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.
On
January 30, 2015, we completed the acquisition of Rebel Holdings Limited (“Rebel FC”) pursuant to a Share Exchange
Agreement. (“Share Exchange Agreement,” such transaction, the “Share Exchange Transaction”), whereby the
Company issued to the Rebel FC Stockholder an aggregate of 20,700,000 shares of its Common Stock, in exchange for 100% of the
equity interests of Rebel FC held by the Rebel FC Stockholder. The shares of our Common Stock received by the Rebel FC Stockholder
in the Share Exchange Transaction constitute approximately 90% of our issued and outstanding Common Stock giving effect to the
issuance of shares pursuant to the Share Exchange Agreement. As a result of the Share Exchange Transaction, Rebel FC, together
with its subsidiaries, Pure Heart Entertainment Pte Ltd. (“Pure Heart”) and SCA Capital Limited (“SCA Capital”),
became the Company’s wholly-owned subsidiaries. The acquisition was accounted for as a reverse merger and recapitalization
effected by the Share Exchange Transaction. Rebel FC 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.
Also
on January 30, 2015, we transferred 100% equity interests of Moxian Intellectual Property Limited (“Moxian IP), our subsidiary,
to Moxian, Inc. (“MOXC”) pursuant to the Equity Transfer Agreement. As a result of the Equity Transfer Transaction,
Moxian IP ceased to be a subsidiary of the Company.
Rebel
FC, 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 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 MMA events.
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.
REBEL
GROUP, INC.
NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Stated
in US Dollars)
| 2. | Summary
of principal accounting policies |
| | The
accompanying unaudited consolidated 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 consolidation. |
| | The
Company's unaudited consolidated financial statements have been presented on the basis
that it is a going concern, which contemplates the realization of assets and the satisfaction
of liabilities in the normal course of business. The fiscal year end is December 31. |
| | 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. |
| | 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. |
Fair
value of financial instruments
The
carrying values of the Company’s financial instruments, including cash and cash equivalents, trade and other receivable,
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 unaudited consolidated 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 judgment 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 statements of operations. The adoption of ASC 740 did not have a significant effect on the unaudited consolidated financial
statements.
REBEL
GROUP, INC.
NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Stated
in US Dollars)
| 2. | Summary
of principal accounting policies (Continued) |
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.
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:
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
GROUP, INC.
NOTES
TO UNAUDITED CONSOLIDATED 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
GROUP, INC.
NOTES
TO UNAUDITED CONSOLIDATED 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 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 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 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
GROUP, INC.
NOTES
TO UNAUDITED CONSOLIDATED 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 unaudited consolidated collateralized
financing entity at fair value in the unaudited consolidated 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 unaudited consolidated collateralized financing entity to eliminate that difference. When the measurement alternative
is not elected for a unaudited consolidated 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 unaudited consolidated
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 unaudited consolidated collateralized financing
entity should be reflected in earnings and attributed to the reporting entity in the unaudited consolidated 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), 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
GROUP, INC.
NOTES
TO UNAUDITED CONSOLIDATED 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 financial statements
have not previously been issued.
On January 30, 2015, MOXC
issued a convertible promissory note to the Company at $7,782,000 (the “MOXC Note”). The MOXC Note will become due
and payable on October 30, 2015 and accrues interest at 1% per annum. Under the MOXC Note, MOXC has the option to convert any and
all amounts due under the MOXC Note into the shares of MOXC’s shares of common stock at the conversion price of $1.00 per
share (“Conversion Price”), if the VWAP of MOXC’s Common Stock for 30 trading days immediately prior to the date
of conversion is higher than the Conversion Price. MOXC also has a right of first refusal to purchase the shares issuable upon
conversion of the MOXC Note at the price of 80% of the VWAP for 30 trading days immediately prior to the date of the proposed repurchase
by MOXC.
|
Gain
on disposal of subsidiary: |
|
Consideration
transferred | |
$ | 6,782,000 | |
|
Less:
fair value of identifiable net assets acquired | |
| - | |
|
| |
$ | 6,782,000 | |
|
| |
As
of | |
|
| |
June
30,
2015 | | |
December
31, 2014 | |
|
| |
| | |
| |
|
Equipment | |
$ | 84,260 | | |
$ | 84,260 | |
|
Less:
accumulated depreciation and amortization | |
| 30,261 | | |
| 19,797 | |
|
Total
property and equipment, net | |
$ | 53,999 | | |
$ | 64,463 | |
The
depreciation expenses for the six months ended June 30, 2015 and 2014 were $9,292 and $9,930, respectively.
REBEL
GROUP, INC.
NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Stated
in US Dollars)
|
| |
As
of | |
|
| |
June
30,
2015 | | |
December
31, 2014 | |
|
| |
| | |
| |
|
Repayable
within one year | |
$ | 16,814 | | |
$ | 12,595 | |
|
Repayable
after one year | |
| 13,996 | | |
| 23,587 | |
|
Total
bank loan | |
$ | 30,810 | | |
$ | 36,182 | |
The
interest expenses for the six months ended June 30, 2015 and 2014 were $2,052 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.
As
of June 30, 2015 and December 31, 2014, the due to shareholder is $679,833 and $227,779 respectively. The amount is unsecured,
interest free and has no fixed terms of repayment.
Prior
to April 16, 2013, the authorized capital stock of the Company consisted of 250,000,000 shares of Common Stock with a par value
of $0.0001. The Company issued 9,000,000 shares of our Common Stock to Marilyn Stark (the “Stark”), our former CEO
and former sold Director, on September 13, 2011 for cash in the amount of $9,000 (per share price of $0.001).
REBEL
GROUP, INC.
NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Stated
in US Dollars)
| 7. | Shareholders’
equity (Continued) |
The
Company sold 2,500,000 shares of Common Stock to a group of Investors on March 14, 2012 for cash in the amount of $37,500 (per
share price of $0.015).
On
February 27, 2013, Stark entered into a Securities Purchase Agreement with (the “Purchase Agreement”) with three accredited
investors (the “Purchasers”), pursuant to which Stark sold to the Purchasers her 9,000,000 shares of Common Stock
of the Company.
On
April 16, 2013, the Company amended its Articles of Incorporation to implement a 20-for-1 Forward Split. As a result of the Forward
Split, the number of outstanding Common Stock increased from 11,500,000 shares to 230,000,000 shares and the par value of Common
Stock remains the same.
On
April 25, 2013, the Company entered into a Share Exchange Agreement with Moxian BVI and Medicode Group Limited, the sole stockholder
of Moxian BVI (the “Moxian Stockholder”), pursuant to which .the Company acquired the operating business of Moxian
BVI and its subsidiaries and the Company ceased being a shell company as such term is defined under Rule 12b-2 under the Exchange
Act. Since the incorporation of the business of Moxian BVI, the Company changed its business to develop social network platform
that integrates social media and business into one single platform.
On
July 9, 2014, the Company amended its Articles of Incorporation (the “Amendments”) to implement a 1-for-5 reverse
split of its issued and outstanding common stock.
On
July 23, 2014, the Financial Industry Regulatory Authority approved and declared the Amendments to be effective. As a result,
230,000,000 shares of Common Stock prior to the Reverse Split decreased and without any further action from the Company’s
stockholders, to 46,000,000 shares of common stock. The Reverse Split will not alter the total number of the authorized shares
or the par value of the shares of the Company.
On
December 5, 2014, the Company implemented a 1-for-20 reverse stock split of its issued and outstanding common stock, par value
$0.0001 per share. As a result, the number of total outstanding shares become 2,300,118.
On
January 30, 2015, the Company, Rebel FC and the stockholder of Rebel FC who owned 100% of Rebel FC (the “Rebel FC Stockholder”)
entered into and consummated transactions pursuant to a Share Exchange Agreement, whereby the Company issued to the Rebel FC Stockholder
an aggregate of 20,700,000 shares of its Common Stock, in exchange for 100% of the equity interests of Rebel FC held by the Rebel
FC Stockholder. The shares of our Common Stock received by the Rebel FC Stockholder in the Share Exchange Transaction constitute
approximately 90% of our issued and outstanding Common Stock giving effect to the issuance of shares pursuant to the Share Exchange
Agreement. As a result of the Share Exchange Transaction, Rebel FC, together with its subsidiaries, Pure Heart and SCA Capital,
became the Company’s wholly-owned subsidiaries.
As of the date of this report,
there were 23,000,118 shares of common stock issued and outstanding.
There are no warrants or options
outstanding to acquire any additional shares of common stock of the Company.
REBEL
GROUP, INC.
NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Stated
in US Dollars)
|
| |
For
the six months ended June 30, | |
|
| |
2015 | | |
2014 | |
|
| |
| | |
| |
|
Net
income/ (loss) attributable to ordinary shareholders for computing basic net loss per ordinary share | |
$ | 6,865,032 | | |
$ | (179,146 | ) |
|
| |
| | | |
| | |
|
Weighted-average
shares of common stock outstanding in computing net loss per common stock of the Company | |
| | | |
| | |
|
Basic | |
| 23,000,118 | | |
| 20,700,000 | |
|
Dilutive
shares | |
| - | | |
| - | |
|
Diluted | |
| 23,000,118 | | |
| 20,700,000 | |
|
| |
| | | |
| | |
|
Basic
earnings per share | |
$ | 0.30 | | |
| (0.01 | ) |
|
Diluted
earnings per share | |
$ | 0.30 | | |
| (0.01 | ) |
*
The number of shares of common stock has been retroactively restated to reflect the 1-for-5 reverse stock split effected on July
9, 2014, and reflect the 1-for-20 reverse stock split of its issued and outstanding common stock effected on December 5, 2014.
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%. No income tax expenses for the six
months ended June 30, 2015 and 2014.
| 10. | Commitments
and contingencies |
Operating
Lease
Significant commitment as
of June 30, 2015 are as follows:
|
Twelve
months ended June 30, | |
| |
|
2016 | |
$ | 25,001 | |
|
2017 | |
| - | |
|
2018 | |
| - | |
|
Thereafter | |
| - | |
|
Total
minimum lease payments | |
$ | 25,001 | |
Legal
Proceeding
There
has been no legal proceeding in which the Company is a party for the six months ended June 30, 2015.
REBEL
GROUP, INC.
NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Stated
in US Dollars)
On August 14, 2015, due to
the VWAP of 30 trading days of MOXC prior to August 14, 2015 is higher than $1.00, which triggered the clause of conversion under
the MOXC Note, MOXC elected to convert the amount of $3,891,000 under the MOXC Note into 3,891,000 shares of common stock of MOXC
at the conversion price of $1.00.
Except the above, there were
no events or transactions other than those disclosed in this report, if any, that would require recognition or disclosure in our
Financial Statements for the six months ended June 30, 2015.
ITEM 2. MANAGEMENT DISCUSSION
AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
The following discussion of our
financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial
statements and the notes to those financial statements appearing elsewhere in this Report.
Certain statements in this Report
constitute forward-looking statements. These forward-looking statements include statements, which involve risks and uncertainties,
regarding, among other things, (a) our projected sales, profitability, and cash flows, (b) our growth strategy, (c) anticipated
trends in our industry, (d) our future financing plans, and (e) our anticipated needs for, and use of, working capital. They are
generally identifiable by use of the words “may,” “will,” “should,” “anticipate,”
“estimate,” “plan,” “potential,” “project,” “continuing,” “ongoing,”
“expects,” “management believes,” “we believe,” “we intend,” or the negative of
these words or other variations on these words or comparable terminology. In light of these risks and uncertainties, there can
be no assurance that the forward-looking statements contained in this filing will in fact occur. You should not place undue reliance
on these forward-looking statements.
The forward-looking statements
speak only as of the date on which they are made, and, except to the extent required by federal securities laws, we undertake no
obligation to update any forward-looking statements to reflect events or circumstances after the date on which the statements are
made or to reflect the occurrence of unanticipated events.
The "Company", "we,"
"us," and "our," refer to (i) Rebel Group, Inc., a Florida corporation (“REBL”), (ii) Rebel Holdings
Limited, a company incorporated under the laws of British Virgin Island sand a wholly-owned subsidiary of REBL (“Rebel FC”);
(iii) Pure Heart Entertainment Pte. Ltd., a company incorporated under the laws of Singapore and a wholly-owned subsidiary of Rebel
FC (“Pure Heart,”); (iv) SCA Capital Limited, a company incorporated under the laws of British Virgin Island and a
wholly-owned subsidiary of Rebel FC (“SCA Capital”).
Overview
The Company,
through Rebel Holdings Limited (“Rebel FC”), 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. MMA is unarmed
combat involving the use of a combination of techniques from different disciplines of martial arts, including, without limitation,
grappling, submission holds, kicking and striking. The styles of martial arts range from Brazilian Jiu-Jitsu, Judo, Karate, Boxing,
Muay Thai, Wrestling, Jeet Kune Do, Taekwondo, Sanshou and various other forms of martial arts. Unlike boxing, where athletes can
only strike with their fists and only above the belt, the fighters in MMA can use punches, kicks, elbows, knee strikes, takedowns
and submissions to win a contest.
As of June
30, 2015 and December 31, 2014, our retained earnings were $7,914,101 and $49,069, respectively. Our stockholders’ equity
were $7,962,401 and $95,418, for June 30, 2015 and December 31, 2014, respectively.
Recent Development
On August 14,
2015, due to the VWAP of 30 trading days of MOXC prior to August 14, 2015 is higher than $1.00, which triggered the clause of conversion
under the MOXC Note, MOXC elected to convert the amount of $3,891,000 under the MOXC Note into 3,891,000 shares of common stock
of MOXC at the conversion price of $1.00.
Results of Operations
For the three months ended
June 30, 2015 compared with the three months ended June 30, 2014
Gross Revenues
The Company
received sales revenues of $348,313 in the three months ended June 30, 2015 compared to $Nil being generated in the three months
ended June 30, 2014.
The Company’s
sales revenue of $ 348,313 in the three months ended June 30, 2015 primarily comes from royalty fee received and management fee
received. In carrying out the event in Singapore, the Company incurred cost of $7,893, the cost were primarily incurred by expense
in rental of event venue, and other miscellaneous cost.
Operating Expenses
Operating expenses
for the three months ended June 30, 2015 and three months ended June 30, 2014 were $147,364 and $139,527, 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 (Loss)
Net profit (loss) for the three
months ended June 30, 2015 and three months ended June 30, 2014, were $206,701, and ($144,602), respectively. Basic and diluted
net income (loss) per share amounted $0.01 and ($0.01) respectively for the three months ended June 30, 2015 and three months ended
June 30, 2014.
For the six months ended June
30, 2015 compared with the six months ended June 30, 2014
Gross Revenues
The Company received sales revenues
of $348,470 in the six months ended June 30, 2015 compared to $Nil being generated in the six months ended June 30, 2014.
The Company’s sales revenue
of $348,470 in the six months ended June 30, 2015 primarily comes from royalty fee received and management fee received. In carrying
out the event in Singapore, the Company incurred cost of $24,205, the cost were primarily incurred by expense in video recording,
rental of event venue, and other miscellaneous cost.
Operating Expenses
Operating expenses for the six months
ended June 30, 2015 and six months ended June 30, 2014 were $261,710 and $169,216, respectively. The expenses consisted of filing
fees, professional fees, payroll and benefits and other general expenses.
Net Profit (Loss)
Net profit
(loss) for the six months ended June 30, 2015 and six months ended June 2014, were $6,865,032 and ($179,146), respectively. Basic
and diluted net income (loss) per share amounted $0.30 and ($0.01) respectively for the six months ended June 30, 2015 and six
months ended June 30, 2014.
Liquidity and Capital Resources
As of June
30, 2015, we had working capital of $7,772,616 consisting of cash on hand of $36,009 as compared to working capital of $991,653
and cash on hand of $Nil as of June 30, 2014.
Net cash used in operating activities
for the three months ended June 30, 2015 was $368,801 as compared to net cash used in operating activities of $302,735 for the
three months ended June 30, 2014. 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 three months ended June 30, 2015 was due to an increase of trade and other receivables.
Net cash provided by financing activities
for the three months ended June 30, 2015 was $397,966 as compared to $292,839 for the three months ended June 30, 2014. The cash
provided by financing activities for the three months ended June 30, 2015 are mainly from amount due to a shareholder.
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 consolidated financial statements, and the future adoption
of recently issued accounting pronouncements, which we do not expect will have a material impact on our consolidated financial
statements.
Off-Balance Sheet Arrangements
As of June 30, 2015, we did not
have any off-balance sheet arrangements.
ITEM 3. QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK.
Pursuant to Item 305(e) of Regulation
S-K (§ 229.305(e)), the Company is not required to provide the information required by this Item as it is a “smaller
reporting company,” as defined by Rule 229.10(f)(1).
ITEM 4. CONTROLS AND PROCEDURES
Disclosures Control and Procedures
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 amended (“Exchange
Act”) 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 June 30, 2015, our CEO evaluated
the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act),
as of the end of the period covered by this Quarterly Report on Form 10-Q. Disclosure controls and procedure include, without
limitations, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports
that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management as appropriate
to allow timely decisions regarding required disclosure. Our Management is responsible for monitoring the process pursuant to
which information is gathered and analyze such information to determine the extent to which such information requires disclosure
in the reports filed with the Securities and Exchange Commission. Based on such evaluation, our CEO has concluded that as of June
30, 2015, the disclosure controls and procedure of the Company were effective.
As of June
30, 2015, management assessed the effectiveness of our internal control over financial reporting based on the criteria for effective
internal control over financial reporting established in by the Committee of Sponsoring Organizations of the Treadway Commission’s
2013 Internal Control - Integrated Framework 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 were: (1) lack of a functioning audit committee due to a lack of a majority of independent
members and a lack of a majority of outside directors on our board of directors, resulting in ineffective oversight in the establishment
and monitoring of required internal controls and procedures; (2) inadequate segregation of duties consistent with control objectives;
and (3) ineffective controls over period end financial disclosure and reporting processes. The aforementioned material weaknesses
were identified by our Chief Executive Officer in connection with the review of our financial statements as of June 30, 2015.
Management
believes that the material weaknesses set forth in items (1), (2) and (3) 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 on
our board of directors 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.
Management’s Remediation
Initiatives
In an effort
to remediate the identified material weaknesses and other deficiencies and enhance our internal controls, we have initiated, or
plan to initiate, the following series of measures:
We will create
a position to segregate duties consistent with control objectives and will increase our personnel resources and technical accounting
expertise within the accounting function when funds are available to us. And, we plan to appoint one or more outside directors
to our board of directors who shall be appointed to an audit committee resulting in a fully functioning audit committee who will
undertake the oversight in the establishment and monitoring of required internal controls and procedures such as reviewing and
approving estimates and assumptions made by management when funds are available to us.
Management believes that the appointment
of one or more outside directors, who shall be appointed to a fully functioning audit committee, will remedy the lack of a functioning
audit committee and a lack of a majority of outside directors on our Board.
We anticipate
that these initiatives will be at least partially, if not fully, implemented by December 2015. Additionally, we plan to test our
updated controls and remediate our deficiencies by December 2015.
Changes in internal controls
over financial reporting
There was no change in our internal
controls over financial reporting that occurred during the period covered by this report, which has materially affected, or is
reasonably likely to materially affect, our internal controls over financial reporting.
PART II -
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
None.
ITEM 1A. RISK FACTORS.
Not applicable to a smaller reporting
company.
ITEM 2. UNREGISTERED SALES
OF EQUITY SECURITIES AND USE OF PROCEEDS.
None.
ITEM 3. DEFAULTS UPON SENIOR
SECURITIES.
None.
ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable.
ITEM 5. OTHER INFORMATION.
On June 30,
2015, the Board of Directors (“Board”) of the Company added a directorship of the Board and appointed Mr. Ong Chow
Hong as the new director of the Company. Below is the biography of Mr. Ong:
Mr. Ong
Chow Hong, age 75, has held the positions of Chief Accountant, Chief Internal Auditor and Director (Audit & Systems) in
the Port of Singapore Authority (“PSA”) for 15 years. He was the General Manager of SPECS Consultants Pte Ltd, the
consulting agency of the PSA. Previously he worked in the Internal Audit Department of ESSO Berhad in Kuala Lumpur, Malaysia and
in a public accountants firm in Perth, Australia. He had also held the position of CEO of Superior Multi-Packaging Ltd, Singapore.
Mr. Ong served
as a director and Chairman of Audit Committee of the public-listed companies of Vicom Ltd from 1980 to 2008. He also held position
as a director in Superior Multi-Packaging Ltd and Airocean Ltd. in Singapore. He was a director of Cisco Recall Pte Ltd, a joint
venture of Cisco Pte Ltd, Singapore and Bramble Ltd of Australia from 1998 to 2004. He was also a director of Hoover Stainless
Pte Ltd, Singapore from 1997 to 2003.
Mr. Ong served
as a Councilor and Chairman of Audit Committee of Aljunied Town Council, Singapore. He served as a member of Audit Committee of
National Council of Social Service, Singapore. He was also the Chairman of Audit Committee of Orchid Country Club, Singapore.
Mr. Ong was
conferred the National Public Administration Medal (Bronze) for his service in the Port Singapore Authority and the Friend of Labour
Award by Singapore Labour Foundation (SLF) for his contributions in Vicom Ltd.
Mr. Ong held
a diploma in Accountancy from the Perth Technical College, Australia. He was a Fellow of Certified Public Accountants (Australia).
ITEM 6. EXHIBITS.
31.1 |
Rule 13(a)-14(a)/15(d)-14(a) Certification of principal executive and financial officer |
|
|
32.1 |
Section 1350 Certification of principal executive officer and principal financial and accounting officer |
|
|
101* |
XBRL data files of Financial Statements and Notes contained in this Quarterly Report on Form 10-Q. |
* In accordance with Regulation
S-T, the Interactive Data Files in Exhibit 101 to the Quarterly Report on Form 10-Q shall be deemed “furnished” and
not “filed.”
SIGNATURES
Pursuant to the requirements of
the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
|
Rebel Group, Inc. |
|
|
|
Date: September 23, 2015 |
By: |
/s/
Aan Yee Leong, Justin |
|
|
Aan Yee Leong, Justin |
|
|
President, Chief Executive Officer, Director |
|
|
Principal Executive Officer, |
|
|
Principal Financial and Accounting Officer |
24
Exhibit 31.1
CERTIFICATION
I,
Aan Yee Leong, Justin hereby certify that:
|
1. |
I
have reviewed this Quarterly Report on Form 10-Q/A for the quarter ended June 30, 2015 of Rebel Group, Inc.; |
|
2. |
Based
on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect
to the period covered by this report; |
|
3. |
Based
on my knowledge, the financial statements, and other financial information included in this report, fairly present in all
material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods
presented in this report; |
|
4. |
The
registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange
Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,
to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this report is being prepared;
b) Designed
such internal control over financial reporting, or caused such internal control over financial reporting to be designed under
our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated
the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation;
and
d) Disclosed
in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's
most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal
control over financial reporting; and
|
5. |
The
registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over
financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing
the equivalent functions): |
a) all
significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which
are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information;
and
b) any
fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal
control over financial reporting
Date: September 23,
2015 |
By: |
/s/
Aan Yee Leong, Justin |
|
|
Aan Yee Leong, Justin |
|
|
President and Chief Executive Officer |
|
|
(principal executive and financial officer) |
Exhibit
32.1
CERTIFICATION
PURSUANT TO
18
U.S.C. SECTION 1350,
AS
ADOPTED PURSUANT TO
SECTION
906 OF THE SARBANES-OXLEY ACT OF 2002
In
connection with the Quarterly Report of Rebel Group, Inc. (the “Company”) on Form 10-Q/A for the period ending
June 30, 2015 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), The undersigned
hereby certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act
of 2002, that, to the best of my knowledge and belief:
(1) The
Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The
information contained in the Report fairly presents, in all material respects, the financial condition and result of operations
of the Company.
Dated:
September 23, 2015 |
By: |
/s/ Aan Yee Leong, Justin |
|
|
Aan Yee Leong, Justin |
|
|
President and Chief Executive Officer |
A
signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise
adopting the signature that appears in typed form within the electronic version of this written statement has been provided to
the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
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