10-K 1 mahi_10k-123111.htm FORM 10-K mahi_10k-123111.htm

U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549




FORM 10-K
(Mark One)

 
x  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the Fiscal Year Ended December 31, 2011
 
OR
 
¨  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 000-50655
 
Madison Avenue Holdings, Inc.

(Exact name of registrant as specified in its charter)

Delaware
20-0823997
(State or other jurisdiction of
(IRS. Employer
incorporation or organization)
Identification No.)


3505 Hart Avenue, Suite 201, Rosemead, CA
91770
   
(Address of principal executive offices)
(Zip Code)

Registrant's telephone number, including area code (626)-576-4333
 
Securities registered pursuant to Section 12(b) of the Act:   None.
 
Securities registered pursuant to Section 12(g) of the Act:   Common Stock, $.001 par value
 
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes o     No x
 
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Yes o     No x
 
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  o No  x
 
Indicate by check mark  if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.  x
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
 
Large accelerated filer
o
 
Accelerated filer 
 
o
           
Non-accelerated filer
o (Do not check if a smaller reporting company)
 
Smaller reporting company
 
x
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).  Yes x   No o
 
State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter.   N/A
 
Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date: there were 500,000 shares outstanding as of March 23, 2012.
 
Documents incorporated by reference: None
 
 

 
 
Madison Avenue Holdings, Inc.
 
Form 10-K
Fiscal Year Ended December 31, 2011
 
Table of Contents

   
Page
PART I
  1
     
Item 1.
Business
1
     
Item 1A.
Risk Factors
1
     
Item 1B
Unresolved Staff Comments
1
     
Item 2.
Properties
1
     
Item 3.
Legal Proceedings
1
     
Item 4.
Removed and Reserved
 
     
PART II
  2
     
Item 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
2
     
Item 6.
Selected Financial Data
2
     
Item7.
Management's Discussion and Analysis of Financial Condition and Results of Operations
2
     
Item 7A.
Quantitative and Qualitative Disclosures about Market Risk
3
     
Item 8.
Financial Statements and Supplementary Data
3
     
Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
3
     
Item 9A.
Controls and Procedures
3
     
Item 9B.
Other Information
4
     
PART III
  4
     
Item 10.
Directors,  Executive Officers and Corporate Governance
4
     
Item 11.
Executive Compensation
5
     
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
5
     
Item 13.
Certain Relationships and Related Transactions, and Director Independence
6
     
Item 14
Principal Accounting Fees and Services
6
     
PART IV
  7
     
Item 15.
Exhibits, Financial Statement Schedules
7
     
Signatures
8
   
Financial Statements
F-1
 
 
 
 

 
PART I

ITEM  1.  BUSINESS
 
GENERAL
 
Madison Avenue Holdings, Inc. ("MAHI") was incorporated on February 27, 2004 under the laws of the State of Delaware to engage in any lawful corporate undertaking, including, but not limited to, selected mergers and acquisitions. MAHI has been in the developmental stage since inception and its operations to date have been limited to issuing shares to its original shareholders.
 
On August 16, 2005, Acer Limited ("Acer"), a British Virgin Islands Company owned and controlled by Mr. Cesar Villavicencio which was then the  sole stockholder of MAHI, sold 475,000 shares of MAHI common stock to Mr. Alex Kam for a cash purchase price of $120,000. Such shares constituted 95% of the outstanding capital stock of MAHI. In connection with the sale, MAHI agreed that, in the event that MAHI successfully completes a merger with or acquisition of one or more business entities identified by Mr. Kam (a "Business Combination"), it will issue to Acer such number of shares of its common stock as shall, together with the 25,000 shares currently owned by Acer, constitute 5% of the total issued and outstanding shares of MAHI common stock immediately following consummation of the Business Combination. Also in connection with the sale, Mr. Cesar Villavicencio resigned as sole director and Chief Executive Officer of MAHI and Mr. Kam was elected to both of those positions, making Mr. Kam MAHI's sole director and sole executive officer.
 
On May 22, 2006, Mr. Kam entered into two separate share purchase agreements with each of Mr. Pan-Rong Liu ("Liu") and Mr. Seung Chi Tang ("Tang"). Under the share purchase agreements, Mr. Kam agreed to sell 118,750 shares of Common Stock to each of Liu and Tang. The purchase price for the Shares under each share purchase agreement was $160,000 and was paid in cash. The share purchase agreements were closed on June 13, 2006. The sale of the shares to Liu and Tang was made so that Liu and Tang would have a  proprietary  stake in MAHI and assist in locating and  negotiating with one or more  business  entities  for the  combination  of that  target company or those target companies with MAHI.
 
Since 2006 MAHI has attempted to locate and negotiate with one or more business entities for the combination of that target company or those target companies with MAHI. It is anticipated that each combination will take the form of a merger, stock-for-stock exchange or stock-for-assets exchange. In most instances the target company would wish to structure the Business Combination to be within the definition of a tax-free reorganization under Section 351 or Section 368 of the Internal Revenue Code of 1986, as amended.
 
No assurances can be given that MAHI will be successful in locating or negotiating with any target company.
 
MAHI has been formed to provide a method for a foreign or domestic private company to become a reporting company with a class of securities registered under the Securities Exchange Act of 1934 (the "Exchange Act").
 
A Business Combination with a target company would normally involve the transfer to the target company of the majority of the issued and outstanding common stock of MAHI and the substitution by the target company of its own management and board of directors for MAHI's current director and Chief Executive Officer.
 
The proposed business activities described herein classify MAHI as a "blank check" company. The Securities and Exchange Commission and certain states have enacted statutes, rules and regulations limiting the public sale of securities of blank check companies. MAHI does not intend to make any efforts to cause a market to develop in its securities until such time as MAHI has successfully implemented its business plan and it is no longer classified as a blank check company.
 
No assurances can be given that MAHI will be able to enter into any Business Combination, as to the terms of a business combination, or as to the nature of a target company.
 
ITEM 1A.  RISK FACTORS
 
Not applicable.
ITEM 1B.   UNRESOLVED STAFF COMMENTS
 
Not applicable.
 
ITEM  2.    PROPERTIES
 
MAHI has no properties and at this time has no agreements to acquire any properties. MAHI currently uses the offices of Alex Kam at no cost to MAHI. Mr. Kam has agreed to continue this arrangement until MAHI completes a Business Combination. Since MAHI presently has no business operations, it will not require any additional facilities until it completes a Business Combination.
 
ITEM  3.    LEGAL PROCEEDINGS
 
There are no legal proceedings pending or threatened by or against MAHI.
 
1

 
 
PART II
Item 5.   MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
 
(a)  MARKET PRICE. There is no trading market for MAHI's common stock at present and there has been no trading market to date. There is no assurance that a trading market will ever develop or, if such a market does develop, that it will continue.
 
(b)  HOLDERS. The issued and outstanding shares of the common stock of MAHI were issued in accordance with exemptions from registration under Section 4(2) of the Securities Act of 1933. As of  March 23, 2012, there were 500,000 shares of common stock outstanding. The par value per share is $.001. As of March 23, 2012, there are four holders of the common stock issued and outstanding.
 
(c)  DIVIDENDS. MAHI has not paid any dividends to date, and has no plans to do so in the foreseeable future.
 
(d)  SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS.
We currently do not have any equity compensation plans.
 
ITEM  6.    SELECTED FINANCIAL DATA
 
Not applicable.
 
ITEM  7.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
The purpose of MAHI is to seek, investigate and, if such investigation warrants, acquire an interest in a business entity which desires to seek the perceived advantages of a corporation which has a class of securities registered under the Exchange Act. MAHI will not restrict its search to any specific business, industry, or geographical location and MAHI may participate in a business venture of virtually any kind or nature. Management anticipates that it will be able to participate in only one potential business venture because MAHI has nominal assets and limited financial resources. This lack of diversification should be considered a substantial risk to the stockholders of MAHI because it will not permit MAHI to offset potential losses from one venture against gains from another.
 
MAHI may seek a business opportunity with entities which have recently commenced operations, or which wish to utilize the public marketplace in order to raise additional capital in order to expand into new products or markets, to develop a new product or service, or for other corporate purposes.
 
MAHI anticipates that the selection of a business opportunity in which to participate will be complex and extremely risky. MAHI has not conducted any research to confirm that there are business entities seeking the perceived benefits of a reporting corporation. Such perceived benefits may include facilitating or improving the terms on which additional equity financing may be sought, providing liquidity for incentive stock options or similar benefits to key employees, increasing the opportunity to use securities for acquisitions, providing liquidity for stockholders and other factors. Business opportunities may be available in many different industries and at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities difficult and complex.
 
MAHI has, and will continue to have, minimal capital with which to provide the owners of business entities with any cash or other assets; however, MAHI offers owners of acquisition candidates the opportunity to acquire a controlling ownership interest in a reporting company without the time required to become a reporting company by other means. MAHI has not conducted market research and is not aware of statistical data to support the perceived benefits of a business combination for the owners of a target company.
 
The analysis of new business opportunities will be undertaken by, or under the supervision of, the officers and sole director of MAHI, who are not professional business analysts. In analyzing prospective business opportunities, MAHI may consider such matters as the available technical, financial and managerial resources; working capital and other financial requirements; history of operations, if any; prospects for the future; nature of present and expected competition; the quality and experience of management services which may be available and the depth of that management; the potential for further research, development, or exploration; specific risk factors not now foreseeable, but which then may be anticipated to impact the proposed activities of MAHI; the potential for growth or expansion; the potential for profit; the perceived public recognition or acceptance of products, services, or trades; name identification; and other relevant factors. This discussion of the proposed criteria is not meant to be restrictive of the virtually unlimited discretion of MAHI to search for and enter into potential business opportunities.
 
It is anticipated that any securities issued in any Business Combination would be issued in reliance upon exemption from registration under applicable federal and state securities laws. In some circumstances, however, as a negotiated element of its transaction, MAHI may agree to register all or a part of such securities immediately after the transaction is consummated or at specified times thereafter. If such registration occurs, it will be undertaken by the surviving entity after MAHI has entered into an agreement for a Business Combination or has consummated a Business Combination and MAHI is no longer considered a blank check company. The issuance of additional securities and their potential sale into any trading market which may develop in the securities of MAHI may depress the market value of the securities of MAHI in the future if such a market develops, of which there is no assurance.
 
 
2

 
 
While the terms of a Business Combination cannot be predicted, it is anticipated that the parties to the Business Combination would desire to avoid the creation of a taxable event and therefore structure the transaction as a tax-free reorganization under Section 351 or 368 of the Internal Revenue Code of 1986, as amended.
 
Depending upon, among other things, the target company's assets and liabilities, the stockholders of MAHI will in all likelihood hold a substantially lesser percentage ownership interest in MAHI following any Business Combination. The percentage of ownership may be subject to significant reduction in the event MAHI acquires a target company with substantial assets. Except for Acer, any Business Combination effected by MAHI can be expected to have a significant dilutive effect on the percentage of shares held by the stockholders of MAHI at such time.
 
MAHI will participate in a Business Combination only after the negotiation and execution of appropriate agreements. Although the terms of such agreements cannot be predicted, generally such agreements would require certain representations and warranties of the parties thereto, would specify certain events of default, would detail the terms of closing and the conditions which must be satisfied by the parties prior to and after such closing and would include miscellaneous other terms.
 
If MAHI stops or becomes unable to continue to pay its operating expenses, MAHI may not be able to timely make its periodic reports required under the Exchange Act nor to continue to search for an acquisition target.
 
Off-Balance Sheet Arrangements
 
MAHI does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.
 
Going Concern
 
The financial statements included in this filing have been prepared in conformity with generally accepted accounting principles that contemplate the continuance of us as a going concern. MAHI's cash is inadequate to pay all of the costs associated with our operations. Management intends to use borrowings and security sales to mitigate the effects of its cash position; however, no assurance can be given that debt or equity financing, if and when required, will be available. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets and classification of liabilities that might be necessary should MAHI be unable to continue its existence.
 
Item 7A.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 
Not applicable.
 
ITEM 8.     FINANCIAL  STATEMENTS AND SUPPLEMENTARY DATA
 
MAHI's financial statements for the years ended December 31, 2011 and 2010, including the notes thereto, together with the report of independent certified public accountants thereon, are presented beginning at page F-1.
 
ITEM  9.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
 
MAHI has not changed its independent accountants since its formation and the Company has had no disagreements with its independent accountants on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure.
 
ITEM  9A. CONTROLS AND PROCEDURES
 
(a)   Disclosure Controls and Procedures.
 
Mr. Alex Kam, our chief executive officer and Mr. Pan-Rong Liu, our chief financial officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of December 31, 2011. Based on this evaluation, our officers concluded that, as of December 31, 2011, our disclosure controls and procedures were effective and adequately designed to ensure that the information required to be disclosed by us in the reports we submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the applicable rules and forms and that such information was accumulated and communicated to our chief executive officer and chief financial officer, in a manner that allowed for timely decisions regarding required disclosure.
 
 
3

 
 
(b)   Internal Control over Financial Reporting
 
Management is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined in Exchange Act Rules 13a-15(f). The Company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Because of its inherent limitations, internal controls over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may be inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.
 
Management assessed our internal control over financial reporting as of December 31, 2011, the end of our fiscal year.  Management’s assessment included evaluation of the design and operating effectiveness of key financial reporting controls, process documentation, accounting policies, and our overall control environment. Based on our assessment, management has concluded that our internal control over financial reporting was effective as of December 31, 2011 to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with U.S. generally accepted accounting principles.
 
This Annual Report does not include an attestation report of the Company’s registered public accounting firm, regarding internal control over financial reporting.  
 
(c)   Changes in Internal Control over Financial Reporting
 
During the period ended December 31, 2011, there has been no change in internal control over financial reporting that has materially affected, or is reasonably likely to materially affect our internal control over financial reporting.

ITEM 9B.  OTHER INFORMATION
 
None.
 
 
Part III

ITEM 10.  DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
 
Set forth below are the names of the sole director and the executive officers of MAHI, all positions and offices they hold with MAHI, the period during which they have served as such, and their business experience during at least the last five years.
 
       
Positions and Offices Held
 
Name
 
Age
 
With Registrant
 
Alex Kam
 
57
 
Chief Executive Officer,
 
       
President, Secretary and Director
 
           
Pan-Rong Liu
  
53
  
Chief Financial Officer
 
           
 
Alex Kam. Mr. Kam is the Chief Executive Officer and the sole director of MAHI. Mr. Kam has extensive experience in international trade between the U.S.and China. He established ACE Wholesale in 1981 and has served as President of ACE Wholesale since that time. ACE Wholesale has operations in Hong Kong and China, and focuses primarily on the import and export of electronic items. Since 1981, he has also served as Executive Vice President of the ACE Group, President of Marido Industrial Corporation, and President of Leman Development Corporation. Additionally, Mr. Kam also founded United National Bank in Monterey Park in 1986 and served as a director of the bank until the bank was sold in 1992. Mr. Kam has a Masters of Science degree from the University of California at Los Angeles.
 
Pan-Rong Liu. Mr. Liu was appointed to the Chief Financial Officer of MAHI pursuant to a Written Consent of Directors dated August 31, 2006 and the appointment effected from September 1, 2006. Mr. Liu was born on November 24, 1956 in China, and obtained his PHD in Agriculture at the Auburn University in Alabama in 1988. He started T&L Trading in 1990. T&L Trading is a live seafood wholesaler and distributes seafood to markets and restaurants.
 
Director Qualifications
 
The Company’s Board of Directors believes that our director’s experience, qualifications, attributes, or skills on an individual basis lead to the conclusion that such director should serve in such capacity. Among the attributes or skills common to all of the Company’s are their ability to review critically and to evaluate, question, and discuss information provided to them, to interact effectively with the officers and employees of the Company, as well as service providers, counsel, and the Company’s independent registered public accounting firm, and to exercise effective and independent business judgment in the performance of their duties as directors.
 
 
4

 
 
Family Relationships
 
There is no family relationship between Mr. Liu and the Company current sole director and Chief Executive Officer, Mr. Kam.
 
Audit Committee and Financial Expert
 
MAHI does not have an Audit Committee. Mr. Kam, the sole director, performs some of the same functions of an Audit Committee, such as: recommending a firm of independent certified public accountants to audit the annual financial statements; reviewing the independent auditors’ independence, the financial statements and their audit report; and reviewing management's administration of the system of internal accounting controls. MAHI does not currently have a written audit committee charter or similar document.
 
MAHI has no audit committee financial expert. MAHI believes the cost related to retaining an audit committee financial expert at this time is prohibitive. Further, because MAHI has no business operations, management believes the services of an audit committee financial expert are not warranted.
 
Code of Ethics
 
A code of ethics relates to written standards that are reasonably designed to deter wrongdoing and to promote:
 
1.     Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;
 
2.     Full, fair, accurate, timely and understandable disclosure in reports and documents that are filed with, or submitted to, the Commission and in other public communications made by an issuer;
 
3.     Compliance with applicable governmental laws, rules and regulations;
 
4.     The prompt internal reporting of violations of the code to an appropriate person or persons identified in the code; and
 
5.     Accountability for adherence to the code.
 
MAHI has not adopted a corporate code of ethics that applies to its principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions
 
The decision to not adopt such a code of ethics resulted from MAHI's having only two officers and one director, management believe that the limited interaction which occurs from having a sole director and two officers eliminates the current need for such a code, in that violations of such a code would be reported to the parties generating the violation.
  
Nominating Committee
 
MAHI does not have a Nominating Committee or Nominating Committee Charter. Alex Kam, MAHI's sole director performs some of the functions associated with a Nominating Committee. MAHI has elected not to have a Nominating Committee in that it is a development stage company with limited operations and resources.
 
ITEM 11.   EXECUTIVE COMPENSATION
 
Mr. Kam has not received any compensation for his services rendered to MAHI, has not received such compensation in the past, and is not accruing any compensation pursuant to any agreement with MAHI. However, he anticipates receiving benefits as beneficial stockholder of MAHI. Mr. Liu has agreed to allocate a limited portion of his time to the activities of MAHI without compensation.
 
No retirement, pension, profit sharing, stock option or insurance programs or other similar programs have been adopted by MAHI for the benefit of its employees.
 
Employment Agreements
 
MAHI has not entered into any employment agreements with executive officers or other employees to date.

ITEM 12.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
 
The following table sets forth each person known by MAHI to be the beneficial owner of five percent or more of the common stock of MAHI and the sole director and two officers of MAHI. Each such person has sole voting and investment power with respect to the shares shown.
 
 
5

 
 
 
 
Name and Address of Beneficial Owner
of Class
 
Amount of Beneficial Ownership
   
Percentage
 
             
Alex Kam
   
237,500
     
47.5
%
1641 W. Main St., #408,
               
Alhambra, CA 91801
               
                 
Pan-Rong Liu
   
118,750
     
23.75
%
13728 Proctor Avenue,
               
#G, La Puente, CA 91746
               
                 
Seung Chi Tang
   
118,750
     
23.75
%
311 Altern St, Arcadia, CA 91006
               
                 
Acer Limited
               
344 East 50th Street
               
New York, NY 10022
   
25,000
     
5
%
                 
Cesar Villavicencio(1)
               
344 East 50th Street
               
New York, NY 10022
   
25,000
(1)
   
5
%(1)


(1)
Includes 25,000 shares owned by Acer Limited, a British Virgin Islands corporation which is owned and controlled by Mr. Villavicencio.

ITEM 13.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
 
None.
 
ITEM 14.   PRINCIPAL ACCOUNTING FEES AND SERVICES
 
MAHI has selected Michael T. Studer CPA P.C. (“Studer”) as our independent auditor for the fiscal years ended December 31, 2011 and 2010.
 
The following table sets forth the aggregate fees billed to MAHI for the fiscal years ended December 31, 2011 and December 31, 2010 by Studer:
 
    Fiscal Year
Ended
December 31, 2011
    Fiscal Year
Ended
December 31, 2010
 
                 
Audit fees
 $  
6,500
  $  
6,500
 
Audit-related fees
   
     
 
Tax fees
   
     
 
Al other fees
   
     
 

Audit fees consist of fees for services billed by Studer related to the audits of MAHI’s annual financial statements and the review of financial statements included in MAHI’s quarterly reports on SEC Form 10-Q. Audit-related fees consist primarily of fees billed in each of the last two fiscal years for assurance and related services by the principal accountants that are reasonably related to the performance of the audit or review of MAHI's financial statements and are not reported under Item 9 (e)(1) of Schedule 14A. Tax fees consist of fees billed in each of the last two fiscal years for professional services rendered by the principal accountants for tax compliance, tax advice, and tax planning.
  
Effective May 6, 2003, the Securities and Exchange Commission adopted rules that require that before our auditor is engaged by us or our subsidiaries to render any auditing or permitted non-audit related service, the engagement be:
 
-approved by our audit committee; or
 
-entered into pursuant to pre-approval policies and procedures established by the audit committee, provided the policies and procedures are detailed as to the particular service, the audit committee is informed of each service, and such policies and procedures do not include delegation of the audit committee's responsibilities to management.
 
We do not have an audit committee. Our board pre-approves all services provided by our independent auditors. The pre-approval process has just been implemented in response to the new rules. Therefore, ours sole director does not have records of what percentages of the above fees were pre-approved. However, all of the above services and fees were reviewed and approved by the entire board of directors either before or after the respective services were rendered.
 
6

 
 
PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
 
EXHIBIT NUMBER
 
DESCRIPTION
 
3.1
 
Certificate of Incorporation (1)
     
3.2
 
By-Laws (2)
     
10.1
 
Stock Purchase Agreement, dated July 8, 2005, among Madison Ave. Holdings, Inc., Acer Limited and Alex Kam. (3)
     
10.2
 
Stock Purchase Agreement, dated May 22, 2006, among Alex Kam and Pan-Rong Liu.(4)
     
10.3
 
Stock Purchase Agreement, dated May 22, 2006, among Alex Kam and Seung Chi Tang. (5)
     
31.1
 
Certification of Alex Kam pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002;
     
31.2
 
Certification of Pan-Rong Liu pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002;
     
32.1
  
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
     
101.INS**
 
XBRL Instance
     
101.SCH**  
XBRL Taxonomy Extension Schema
     
101.CAL**
 
XBRL Taxonomy Extension Calculation
     
101.DEF**
 
XBRL Taxonomy Extension Definition
     
101.LAB**
 
XBRL Taxonomy Extension Labels
     
101.PRE**  
XBRL Taxonomy Extension Presentation
     
** XBRL  
Information is furnished and not filed or a part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.
 
(1) Incorporated by reference to Exhibit 3.1 to the Registrant’s Registration Statement on Form 10-SB filed by the Company with the Securities and Exchange Commission (the “Commission”) on March 29, 2004 (the” Form 10-SB”).
 
(2) Incorporated by reference to Exhibit 3.2 to the Form 10-SB.

(3) Incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K, filed with the Commission on August 25, 2005.

(4) Incorporated by reference to Exhibit 10.1 to the Statement on Schedule 13D, filed by Pan-Rong Liu with the Commission on July 7, 2006.
 
(5) Incorporated by reference to Exhibit 10.2 to the Statement on Schedule 13D, filed by Seung Chi Tang with the Commission on July 7, 2006.
 
MAHI 's financial statements for the years ended December 31, 2011 and 2010, including the notes thereto, together with the report of independent certified public accountants thereon, are presented beginning at page F-1.
 
 
7

 
SIGNATURES
   
 
 Pursuant to the requirements of Section 13 or 15(d) 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.
 
 
Madison Avenue Holdings, Inc.
     
 
By:
 
Date: March 23, 2012
 
/s/ Alex Kam
   
 Alex Kam
   
 Chief Executive Officer and
   
 President(principal executive officer)
     
Date: March 23, 2012
   
   
  /s/ Pan-Rong Liu
   
  Pan-Rong Liu
   
  Chief Financial Officer (principal
   
  financial officer and principal accounting
   
  officer)

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Date: March 23, 2012
/s/ Alex Kam
 
Alex Kam
 
Sole Director
 
 
8

 
 
MADISON AVENUE HOLDINGS INC.
(A Development Stage Company)
Index to Financial Statements
 
  Page
   
Report of Independent Registered Public Accounting Firm
F-2
   
Financial Statements:
 
   
Balance Sheets as of December 31, 2011 and 2010
F-3
   
Statements of Operations for the years ended
 
December 31, 2011 and 2010 and for the period
 
February 27, 2004 (date of inception) to
 
December 31, 2011
F-4
   
Statements of Changes in Stockholders’ Equity for
 
the years ended December 31, 2011 and 2010 and
 
for the period February 27, 2004 (date of inception)
 
to December 31, 2011
F-5
   
Statements of Cash Flows for the years ended
 
December 31, 2011 and 2010 and for the period
 
February 27, 2004 (date of inception) to
 
December 31, 2011
F-6
   
Notes to Financial Statements
F-7
 
 
F-1

 
 
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of
Madison Avenue Holdings Inc.

I have audited the accompanying balance sheets of Madison Avenue Holdings Inc. (the Company), a development stage company, as of December 31, 2011 and 2010 and the related statements of operations, changes in stockholders’ equity, and cash flows for the years ended December 31, 2011 and 2010 and for the period February 27, 2004 (date of inception) to December 31, 2011.  These financial statements are the responsibility of the Company’s management.  My responsibility is to express an opinion on these financial statements based on my audit.

I conducted my audit in accordance with standards of the Public Company Accounting Oversight Board (United States).  Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  I believe that my audit provides a reasonable basis for my opinion.

In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Madison Avenue Holdings Inc., a development stage company, as of December 31, 2011 and 2010 and the results of its operations and its cash flows for the years ended December 31, 2011 and 2010 and for the period February 27, 2004 (date of inception) to December 31, 2011 in conformity with accounting principles generally accepted in the United States.

The accompanying financial statements referred to above have been prepared assuming that the Company will continue as a going concern.  As discussed in Note 2 to the financial statements, the Company’s present financial situation raises substantial doubt about its ability to continue as a going concern.  Management’s plans in regard to this matter are also described in Note 2.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 
/s/ Michael T. Studer CPA P.C.                                  


Freeport, New York
March 23, 2012

 
F-2

 
 
MADISON AVENUE HOLDINGS INC.
(A Development Stage Company)
Balance Sheets
 
   
December 31,
   
December 31,
 
   
2011
   
2010
 
             
Assets
           
             
Current assets:
           
Cash and cash equivalents
  $ -     $ -  
Prepaid expenses
    2,000       2,000  
                 
Total current assets
    2,000       2,000  
                 
Other assets
    -       -  
                 
Total assets
  $ 2,000     $ 2,000  
                 
Liabilities and Stockholders' Equity (Deficiency)
               
                 
Current liabilities:
               
Accounts payable and accrued expenses
  $ -     $ 455  
                 
Total current liabilities
    -       455  
                 
Other liabilities
    -       -  
                 
Total liabilities
    -       455  
                 
Commitments and contingencies
               
                 
Stockholders' equity:
               
Common stock, $.001 par value; 10,000,000 shares authorized, 500,000 shares issued and outstanding
    500       500  
Additional paid-in capital
    117,759       99,101  
Deficit accumulated during the development stage
    (116,259 )     (98,056 )
                 
Total stockholders' equity
    2,000       1,545  
                 
Total liabilities and stockholders' equity
  $ 2,000     $ 2,000  
 
See notes to financial statements.
 
 
F-3

 
 
MADISON AVENUE HOLDINGS INC.
(A Development Stage Company)
Statements of Operations
 
               
Cumulative
 
               
During the
 
               
Development
 
               
Stage
 
               
(February 27,
 
   
Year ended
   
Year ended
   
2004 to
 
   
December 31, 2011
   
December 31, 2010
   
December 31, 2011)
 
                   
Revenues
  $ -     $ -     $ -  
                         
Expenses:
                       
General and administrative
    18,203       16,318       116,259  
                         
Total expenses
    18,203       16,318       116,259  
                         
Net loss
  $ (18,203 )   $ (16,318 )   $ (116,259 )
                         
Net loss per share, basic and diluted
  $ (0.04 )   $ (0.03 )        
                         
Weighted average number of commonshares outstanding, basic and diluted
    500,000       500,000          
 
See notes to financial statements.
 
 
F-4

 
 
MADISON AVENUE HOLDINGS INC.
(A Development Stage Company)
Statements of Changes in Stockholders' Equity
 
               
Additional
   
Deficit
Accumulated
During the
   
Total
Stockholders'
 
   
Common Stock
   
Paid-In
   
Development
    Equity  
   
Shares
   
Amount
   
Capital
   
Stage
   
 (Deficiency)
 
                               
Sale of common stock to a corporation controlled by the president and director of the Company in March 2004
    500,000     $ 500     $ -     $ -     $ 500  
                                         
Company expenses paid by sole stockholder in March 2004
    -       -       3,951       -       3,951  
                                         
Capital contribution from sole stockholder in May 2004
    -       -       2,000       -       2,000  
                                         
Net loss for the period February 27, 2004 to December 31, 2004
    -       -       -       (7,297 )     (7,297 )
                                         
Balances, December 31, 2004
    500,000       500       5,951       (7,297 )     (846 )
                                         
Capital contributions from stockholders in February, April, July and September 2005
    -       -       8,000       -       8,000  
                                         
Company expenses paid by majority stockholder in October 2005
    -       -       319       -       319  
                                         
Net loss for the year ended December 31, 2005
    -       -       -       (12,450 )     (12,450 )
                                         
Balances, December 31, 2005
    500,000       500       14,270       (19,747 )     (4,977 )
                                         
Company expenses paid by stockholders during 2006
    -       -       11,782       -       11,782  
                                         
Net loss for the year ended December 31, 2006
    -       -       -       (9,621 )     (9,621 )
                                         
Balances, December 31, 2006
    500,000       500       26,052       (29,368 )     (2,816 )
                                         
Company expenses paid by stockholders during 2007
    -       -       21,042       -       21,042  
                                         
Net loss for the year ended December 31, 2007
    -       -       -       (20,306 )     (20,306 )
                                         
Balances, December 31, 2007
    500,000       500       47,094       (49,674 )     (2,080 )
                                         
Company expenses paid by stockholders during 2008
    -       -       17,364       -       17,364  
                                         
Net loss for the year ended December 31, 2008
    -       -       -       (16,739 )     (16,739 )
                                         
Balances, December 31, 2008
    500,000       500       64,458       (66,413 )     (1,455 )
                                         
Company expenses paid by stockholders during 2009
    -       -       16,992       -       16,992  
                                         
Net loss for the year ended December 31, 2009
    -       -       -       (15,325 )     (15,325 )
                                         
Balances, December 31, 2009
    500,000       500       81,450       (81,738 )     212  
                                         
Company expenses paid by stockholders during 2010
    -       -       17,651       -       17,651  
                                         
Net loss for the year ended December 31, 2010
    -       -       -       (16,318 )     (16,318 )
                                         
Balances, December 31, 2010
    500,000       500       99,101       (98,056 )     1,545  
                                         
Company expenses paid by stockholders during 2011
    -       -       18,658       -       18,658  
                                         
Net loss for the year ended December 31, 2011
    -       -       -       (18,203 )     (18,203 )
                                         
Balances, December 31, 2011
    500,000     $ 500     $ 117,759     $ (116,259 )   $ 2,000  
 
See notes to financial statements.
 
 
F-5

 
 
 
MADISON AVENUE HOLDINGS INC.
(A Development Stage Company)
Statements of Cash Flows
 
               
Cumulative
 
               
During the
 
               
Development
 
               
Stage
 
               
(February 27,
 
   
Year ended
   
Year ended
   
2004 to
 
   
December 31, 2011
   
December 31, 2010
   
December 31, 2011)
 
Cash flows from operating activities:
                 
Net loss
  $ (18,203 )   $ (16,318 )   $ (116,259 )
Changes in operating assets and liabilities:
                       
Prepaid expenses
    -       (333 )     (2,000 )
Accounts payable and accrued expenses
    (455 )     (1,000 )     -  
                         
Net cash used in operating activities
    (18,658 )     (17,651 )     (118,259 )
                         
Cash flows from investing activities
    -       -       -  
                         
Cash flows from financing activities:
                       
Proceeds from sale of common stock
    -       -       500  
Capital contributions
    18,658       17,651       117,759  
                         
Net cash provided by financing activities
    18,658       17,651       118,259  
 
                       
Net increase in cash
    -       -       -  
                         
Cash and cash equivalents, beginning of period
    -       -       -  
 
                       
Cash and cash equivalents, end of period
  $ -     $ -     $ -  
                         
Supplemental disclosures of cash flow information:
                 
Interest paid
  $ -     $ -     $ -  
                         
Income taxes paid
  $ -     $ -     $ -  
 
See notes to financial statements.
 
 
F-6

 
 
MADISON AVENUE HOLDINGS INC.
 (A Development Stage Company)
Notes to Financial Statements
For the Years Ended December 31, 2011 and 2010 and
For the Period February 27, 2004 (Inception) to December 31, 2011


NOTE 1 – ORGANIZATION

Madison Avenue Holdings Inc. (the “Company”) was incorporated in the State of Delaware on February 27, 2004.  The Company has no products or services; the Company is seeking a business to merge with or acquire.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation – The Company has been presented as a “development stage enterprise” in accordance with Accounting Standards Codification (“ASC”) 915, “Development Stage Entities”.  Since inception, the Company’s activities have been limited to organizational efforts, obtaining initial financing, and making filings with the Securities and Exchange Commission.

At December 31, 2011, the Company had no cash and for the period February 27, 2004 (inception) to December 31, 2011, the Company incurred a net loss of $116,259.  These factors create uncertainty as to the Company’s ability to continue as a going concern.  The Company is making efforts to acquire a business with assets and operations.  However, there is no assurance that the Company will be successful in accomplishing this objective.  The financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.

Cash and cash equivalents – For purposes of the balance sheet and statement of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents.

Use of estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.

Fair value of financial instruments – The Company’s financial instruments consist of accounts payable and accrued expenses, which approximate fair value because of their short maturity.
 
 
F-7

 

MADISON AVENUE HOLDINGS INC.
 (A Development Stage Company)
Notes to Financial Statements
For the Years Ended December 31, 2011 and 2010 and
For the Period February 27, 2004 (Inception) to December 31, 2011


NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Income taxes – Income taxes are accounted for under the assets and liability method.  Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards.   Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled.

Net loss per common share – Basic and diluted net loss per common share has been calculated based upon the weighted average number of common shares outstanding.

Concentration of credit risk – The Company has no off-balance-sheet concentrations of credit risk such as foreign exchange contracts, options contracts or other foreign hedging arrangements.  The Company maintains its cash balance with one financial institution, in the form of a demand deposit account.


NOTE 3 – STOCKHOLDERS’ EQUITY

In March 2004, the Company sold 500,000 shares of its common stock at a price of $.001 per share, or $500 total, to a corporation (the “First Stockholder”) controlled by the then president and director of the Company.  From March 2004 to September 2005, the First Stockholder made additional capital contributions to the Company of $13,951.

In August 2005, the First Stockholder of the Company sold 475,000 shares of Company common stock to an unrelated third party (the “Second Stockholder”).  The Company agreed under the related Stock Purchase Agreement that, in exchange for the First Stockholder’s efforts in procuring the Second Stockholder’s services to identify merger or acquisition targets for the Company; in the event that the Company successfully completes a merger or acquisition of one or more business entities identified by the new 95% Second Stockholder (the “Business Combination”), the Company will issue such number of new shares of the common stock of the Company to the First Stockholder so that it will continue to retain 5% of equity ownership in the Company immediately after the close of any Business Combination.   From October 2005 to June 2006, the Second Stockholder made additional capital contributions to the Company of $7,744.
 
 
F-8

 
 
MADISON AVENUE HOLDINGS INC.
 (A Development Stage Company)
Notes to Financial Statements
For the Years Ended December 31, 2011 and 2010 and
For the Period February 27, 2004 (Inception) to December 31, 2011


NOTE 3 – STOCKHOLDERS’ EQUITY (continued)

In June 2006, the Second Stockholder sold a total of 237,500 shares of Company common stock to two unrelated third parties (the “Third Stockholder” and the “Fourth Stockholder”), 118,750 shares to each of them.  From September 2006 to December 2011, the Second Stockholder, Third Stockholder and Fourth Stockholder made capital contributions to the Company of $96,064.


NOTE 4 – INCOME TAXES

The provision for (benefit from) income taxes differs from the amount computed by applying the statutory United States federal income tax rate of 34% to income (loss) before income taxes. The sources of the difference are as follows:
 
     
Year ended
December 31, 2011
     
Year ended
December 31, 2010
   
Cumulative during
the development stage (February 27, 2004 to
December 31, 2011)
 
Expected tax at 34%
  $ (6,189 )   $ (5,548 )   $ (39,528 )
                         
Increase in valuation allowance
    6,189       5,548       39,528  
                         
Income tax provision
  $ -     $ -     $ -  
 
Significant components of the Company’s deferred income tax assets are as follows:

   
December 31, 2011
   
December 31, 2010
 
Net operating loss carryforward
  $ 39,528     $ 33,339  
                 
Less valuation allowance
    (39,528 )     (33,339 )
                 
Income tax provision
  $ -     $ -  

 
F-9

 

MADISON AVENUE HOLDINGS INC.
 (A Development Stage Company)
Notes to Financial Statements
For the Years Ended December 31, 2011 and 2010 and
For the Period February 27, 2004 (Inception) to December 31, 2011

NOTE 4 – INCOME TAXES (continued)

Based on management ‘s present assessment, the Company has not yet determined it to be more likely than not that a deferred tax asset of $39,528 attributable to the future utilization of the $116,259 net operating loss carryforward as of December 31, 2011 will be realized.  Accordingly, the Company has provided a 100% allowance against the deferred tax asset in the financial statements at December 31, 2011.  The Company will continue to review this valuation allowance and make adjustments as appropriate.  The net operating loss carryforward expires in years 2024, 2025, 2026, 2027, 2028, 2029,   2030 and 2031 in the amounts of $7,297, $12,450, $9,621, $20,306, $16,739, $15,325, $16,318 and 18,203 respectively.

Current tax laws limit the amount of loss available to be offset against future taxable income when a substantial change in ownership occurs.  Therefore, the amount available to offset future taxable income may be limited.

NOTE 5 – COMMITMENTS AND CONTINGENCIES

All activities of the Company are being conducted by the officers and directors from either their homes or their business offices at no cost to the Company.  The officers and directors have agreed to continue this arrangement until the Company completes a business combination.

F-10