10-K 1 madison20141231_10k.htm FORM 10-K

 U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 


FORM 10-K

(Mark One)


  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the Fiscal Year Ended December 31, 2014

 

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 ☐     No ☒

 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes ☐     No ☒

 

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 ☒     No ☐

 

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   No  

 

 
 

 

  

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. ☒

 

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

 

Accelerated filer 

 

 

 

 

 

 

 

Non-accelerated filer

 (Do not check if a smaller reporting company)

 

Smaller reporting company

 

 

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

 

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter.   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 30, 2015.

 

Documents incorporated by reference: None

  

 
 

 

 

Madison Avenue Holdings, Inc.

 

Form 10-K

Fiscal Year Ended December 31, 2014

 

Table of Contents

 

 

 

Page

PART I

 

 

 

 

 

Item 1.

Business

  1

 

 

 

Item 1A.

Risk Factors

  1

 

 

 

Item 1B

Unresolved Staff Comments

  1

 

 

 

Item 2.

Properties

  2

 

 

 

Item 3.

Legal Proceedings

  2

 

 

 

Item 4.

Mine Safety Disclosures

  2

 

 

 

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

  4

 

 

 

Item 9B.

Other Information

  4

 

 

 

PART III

 

 

 

 

 

Item 10.

Directors,  Executive Officers and Corporate Governance

  4

 

 

 

Item 11.

Executive Compensation

  6

 

 

 

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

  6

 

 

 

Item 13.

Certain Relationships and Related Transactions, and Director Independence

  6

 

 

 

Item 14

Principal Accounting Fees and Services

  6

 

 

 

PART IV

 

  6

 

 

 

Item 15.

Exhibits, Financial Statement Schedules

  8

 

 

 

Signatures

  9

 

 

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.

  

 
1

 

 

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.

 

ITEM 4.    MINE SAFETY DISCLOSURES

 

Not applicable.

 

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 30, 2015, there were 500,000 shares of common stock outstanding. The par value per share is $.001. As of March 30, 2015, 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.

   

 
2

 

 

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.

  

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 year ended December 31, 2014, 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.

  

 
3

 

 

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, 2014. Based on this evaluation, our officers concluded that, as of December 31, 2014, 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.

  

(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, 2014, 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, 2014 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, 2014, 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

 

58

 

Chief Executive Officer,

 

 

 

 

President, Secretary and Director

 

 

 

 

 

Pan-Rong Liu

  

54

  

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.

 

 
4

 

  

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.

 

Director Independence

 

Our securities are not listed on a national securities exchange or in an inter-dealer quotation system which has requirements that directors be independent.  We do not have majority of independent directors.

  

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.

  

 
5

 

 

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.

 

Name and Address of Beneficial Owner of Class

 

Amount of Beneficial Ownership

   

Percentage

 
                 

Alex Kam

1641 W. Main St., #408,

Alhambra, CA 91801

    237,500       47.5

%

                 

Pan-Rong Liu

13728 Proctor Avenue,

#G, La Puente, CA 91746

    118,750       23.75

%

                 

Seung Chi Tang

311 Altern St, Arcadia, CA 91006

    118,750       23.75

%

                 

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       5

%

 

 

(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, 2014 and 2013.

 

 
6

 

  

The following table sets forth the aggregate fees billed to MAHI for the fiscal years ended December 31, 2014 and December 31, 2013 by Studer:

 

   

Fiscal Year

Ended

December 31, 2014

   

Fiscal Year

Ended

December 31, 2013

 
                 

Audit fees

  $ 6,500     $ 6,500  

Audit-related fees

           

Tax fees

           

All 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.

  

 
7

 

 

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 year ended December 31, 2014, including the notes thereto, together with the report of independent certified public accountants thereon, are presented beginning at page F-1.

  

 
8

 

 

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 30, 2015

 

/s/ Alex Kam

 

 

 

Alex Kam

 

 

 

Chief Executive Officer and

 

 

 

President(principal executive officer)

 

 

 

 

Date: March 30, 2015

 

 

 

 

 

  /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 30, 2015

 

/s/ Alex Kam

 

 

Alex Kam

 

 

Sole Director

   

 
9

 

 

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, 2014 and 2013

F-3

   

Statements of Operations for the years ended December 31, 2014 and 2013 and for the period February 27, 2004 (date of inception) to December 31, 2014

F-4
   

Statements of Changes in Stockholders’ Equity (Deficiency) for the years ended December 31, 2014 and 2013 and for the period February 27, 2004 (date of inception) to December 31, 2014

F-5
   

Statements of Cash Flows for the years ended December 31, 2014 and 2013 and for the period February 27, 2004 (date of inception) to December 31, 2014

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, 2014 and 2013 and the related statements of operations, changes in stockholders’ equity (deficiency), and cash flows for the years ended December 31, 2014 and 2013 and for the period February 27, 2004 (date of inception) to December 31, 2014. 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, 2014 and 2013 and the results of its operations and its cash flows for the years ended December 31, 2014 and 2013 and for the period February 27, 2004 (date of inception) to December 31, 2014 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 30th, 2015

  

 
F-2

 

 

MADISON AVENUE HOLDINGS INC.

(A Development Stage Company)

Balance Sheets

 

   

December 31,

   

December 31,

 
   

2014

   

2013

 
                 

Assets

               
                 

Current assets:

               

Cash and cash equivalents

  $ -     $ -  

Prepaid expenses

    2,000       3,000  
                 

Total current assets

    2,000       3,000  
                 

Other assets

    -       -  
                 

Total assets

  $ 2,000     $ 3,000  
                 

Liabilities and Stockholders' Equity (Deficiency)

               
                 

Current liabilities:

               

Accounts payable and accrued expenses

  $ -     $ 1,000  
                 

Total current liabilities

    -       1,000  
                 

Other liabilities

    -       -  
                 

Total liabilities

    -       1,000  
                 

Commitments and contingencies

               
                 

Stockholders' equity (deficiency):

               

Common stock, $.001 par value; 10,000,000 shares authorized, 500,000 shares issued and outstanding

    500       500  

Additional paid-in capital

    177,864       157,329  

Deficit accumulated during the development stage

    (176,364 )     (155,829 )
                 

Total stockholders' equity (deficiency)

    2,000       2,000  
                 

Total liabilities and stockholders' equity (deficiency)

  $ 2,000     $ 3,000  

 

 

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, 2014

   

December 31, 2013

   

December 31, 2014)

 
                         

Revenues

  $ -     $ -     $ -  
                         

Expenses:

                       

General and administrative

    20,535       20,410       176,364  
                         

Total expenses

    20,535       20,410       176,364  
                         

Net loss

  $ (20,535 )   $ (20,410 )   $ (176,364 )
                         

Net loss per share, basic and diluted

  $ (0.04 )   $ (0.04 )        
                         

Weighted average number of common shares 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 (Deficiency)

 

                           

Deficit

         
                           

Accumulated

    Total  
                   

Additional

   

During the

   

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  
                                         

Company expenses paid by stockholders during 2012

    -       -       16,980       -       16,980  
                                         

Net loss for the year ended December 31, 2012

    -       -       -       (19,160 )     (19,160 )
                                         

Balances, December 31, 2012

    500,000       500       134,739       (135,419 )     (180 )
                                         

Company expenses paid by stockholders during 2013

    -       -       22,590       -       22,590  
                                         

Net loss for the year ended December 31, 2013

    -       -       -       (20,410 )     (20,410 )
                                         

Balances, December 31, 2013

    500,000     $ 500     $ 157,329     $ (155,829 )   $ 2,000  
                                         

Company expenses paid by stockholders during 2014

    -       -       20,535       -       20,535  
                                         

Net loss for the year ended December 31, 2014

    -       -       -       (20,535 )     (20,535 )
                                         

Balances, December 31, 2014

    500,000     $ 500     $ 177,864     $ (176,364 )   $ 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, 2014

   

December 31, 2013

   

December 31, 2014)

 

Cash flows from operating activities:

                       

Net loss

  $ (20,535 )   $ (20,410 )   $ (176,364 )

Changes in operating assets and liabilities:

                       

Prepaid expenses

    1,000       (1,000 )     (2,000 )

Accounts payable and accrued expenses

    (1,000 )     (1,180 )     -  
                         

Net cash used in operating activities

    (20,535 )     (22,590 )     (178,364 )
                         

Cash flows from investing activities

    -       -       -  
                         

Cash flows from financing activities:

                       

Proceeds from sale of common stock

    -       -       500  

Capital contributions

    20,535       22,590       177,864  
                         

Net cash provided by financing activities

    20,535       22,590       178,364  
                         

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, 2014 and 2013 and

For the Period February 27, 2004 (Inception) to December 31, 2014

 

 

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, 2014, the Company had no cash and for the period February 27, 2004 (inception) to December 31, 2014, the Company incurred a net loss of $176,364. 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, 2014 and 2013 and

For the Period February 27, 2004 (Inception) to December 31, 2014

 

 

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.

 

Recent Accounting Pronouncements -

 

In July 2013, the FASB issued ASU 2013-11, “Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists.” The objective of this guidance is to clarify the balance sheet presentation of an unrecognized tax benefit and to resolve the diversity in practice that had developed in the absence of any on-point GAAP. This ASU applies to all entities with unrecognized tax benefits that also have tax loss or tax credit carryforwards in the same tax jurisdiction as of the reporting date. The ASU is effective for public entities for fiscal years beginning after December 15, 2013, and interim periods therein. The adoption of this guidance did not have a material impact on the Company’s financial statements.

 

In May 2014, the FASB and IASB jointly issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606).” The intent of this guidance is to provide greater comparability for financial statement users by eliminating inconsistencies in current revenue recognition GAAP. Specifically, an entity should recognize revenue based on the transaction price, which is the amount of consideration the entity expects to be entitled to in exchange for transferring promised goods or services. A single principles-based, five-step revenue model must be applied to all contracts with customers. For public entities, the ASU is effective for annual and interim periods beginning after December 15, 2016. Early application is not permitted. The adoption of this guidance is not expected to have a material impact on the Company’s financial statements.

 

 
F-8 

 

 

MADISON AVENUE HOLDINGS INC.

(A Development Stage Company)

Notes to Financial Statements

For the Years Ended December 31, 2014 and 2013 and

For the Period February 27, 2004 (Inception) to December 31, 2014

 

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

 

In June 2014, The Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-10, “Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation” (“ASU 2014-10”). ASU 2014-10 removes the financial reporting distinction between development stage entities and other reporting entities and eliminates the requirements for development stage entities to (1) present inception-to-date information in the statements of income, cash flows, and shareholder equity, (2) label the financial statements as those of a development stage entity, (3) disclose a description of the development stage activities in which the entity is engaged, and (4) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage. The Company is required to adopt this new standard on a retrospective basis for the year ending December 31, 2015, and interim periods therein; however, early application is permitted. Other than simplifying the presentation of the financial statements and disclosures needed to be made by the Company, the Company believes that the adoption of ASU 2014-10 will not materially affect its future financial statements.

 

In June 2014, the FASB issued ASU 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 (a consensus of the FASB Emerging Issues Task Force).” The ASU clarifies that entities should treat performance targets that can be met after the requisite service period of a share-based payment award as performance conditions that affect vesting. Therefore, an entity would not record compensation expense (measured as of the grant date without taking into account the effect of the performance target) related to an award for which transfer to the employee is contingent on the entity’s satisfaction of a performance target until it becomes probable that the performance target will be met. No new disclosures are required under the ASU. The ASU is effective for all entities for reporting periods beginning after December 15, 2015. Early adoption is permitted. The adoption of this guidance is not expected to have a material impact on the Company’s financial statements.

 

 
F-9 

 

 

MADISON AVENUE HOLDINGS INC.

(A Development Stage Company)

Notes to Financial Statements

For the Years Ended December 31, 2014 and 2013 and

For the Period February 27, 2004 (Inception) to December 31, 2014



 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

 

In January 2015, the FASB issued ASU 2015-01, “Income Statement - Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items.” This ASU eliminates the separate presentation of extraordinary items but does not change the requirement to disclose material items that are unusual or infrequent in nature. The ASU is effective for fiscal years beginning after December 15, 2015, as well as interim periods within those fiscal years. The ASU may be applied retrospectively to all prior periods presented in the financial statements, and early adoption is permitted provided that the guidance is applied from the beginning of the fiscal year of adoption. The adoption of this guidance is not expected to have a material impact on the Company’s future financial statements.

 

Certain other accounting pronouncements have been issued by the FASB and other standard setting organizations which are not yet effective and therefore have not yet been adopted by the Company. The impact on the Company’s financial position and results of operations from adoption of these standards is not expected to be material.

 

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-10

 

 

MADISON AVENUE HOLDINGS INC.

(A Development Stage Company)

Notes to Financial Statements

For the Years Ended December 31, 2014 and 2013 and

For the Period February 27, 2004 (Inception) to December 31, 2014

 

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 2014, the Second Stockholder, Third Stockholder and Fourth Stockholder made capital contributions to the Company of $156,169.

 

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, 2014

   

Year ended

December 31, 2013

   

Cumulative during the development stage (February 27, 2004 to December 31, 2014)

 
                         

Expected tax at 34%

  $ (6,982 )   $ (6,940 )   $ (59,964 )
                         

Increase in valuation allowance

    6,982       6,940       59,964  
                         

Income tax provision

  $ -     $ -     $ -  

 

Significant components of the Company's deferred income tax assets are as follows:

 

 

   

December 31, 

2014

   

December 31,

2013

 
                 

Net operating loss carryforward

  $ 59,964     $ 52,982  
                 

Less valuation allowance

    (59,964 )     (52,982 )
                 

Income tax provision

  $ -     $ -  

 

 
F-11

 

 

MADISON AVENUE HOLDINGS INC.

(A Development Stage Company)

Notes to Financial Statements

For the Years Ended December 31, 2014 and 2013 and

For the Period February 27, 2004 (Inception) to December 31, 2014

 

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 $59,964 attributable to the future utilization of the $176,364 net operating loss carryforward as of December 31, 2014 will be realized. Accordingly, the Company has provided a 100% allowance against the deferred tax asset in the financial statements at December 31, 2014. 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, 2031, 2032,2033 and 2034 in the amounts of $7,297, $12,450, $9,621, $20,306, $16,739, $15,325, $16,318, $18,203, $19,160, $20,410 and $20,535, 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-12