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EX-31 - CHIEF EXECUTIVE OFFICER-SECTION 302 CERTIFICATION - Apollo Entertainment Group, Inc.ex_31-1.txt
EX-32 - CHIEF EXECUTIVE OFFICER-SECTION 906 CERTIFICATION - Apollo Entertainment Group, Inc.ex_32-1.txt
EX-32 - CHIEF FINANCIAL OFFICER-SECTION 906 CERTIFICATION - Apollo Entertainment Group, Inc.ex_32-2.txt
EX-31 - CHIEF FINANCIAL OFFICER-SECTION 302 CERTIFICATION - Apollo Entertainment Group, Inc.ex_31-2.txt


                     U.S. Securities and Exchange Commission
                             Washington, D.C. 20549

                                    FORM 10-Q
                                   (Mark One)

[X]   QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
      ACT OF 1934 for the quarterly period ending September 30, 2009

[ ]   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
      ACT OF 1934
                   For the transition period from _____to_____

                        Commission file number 333-153495

                        Apollo Entertainment Group, Inc.
                 ----------------------------------------------
                 (Name of Small Business Issuer in its Charter)

               Florida                               22-3962092
       ----------------------             -------------------------------
      (State of Incorporation)           (IRS Employer identification No.)

          20900 N.E. 30th Ave., 8th Floor, Aventura, FL        33180
          ---------------------------------------------      --------
             (Address of principal executive offices)       (Zip Code)

                    Issuer's telephone number, (786) 871-4858
                   -------------------------------------------

Indicate by check mark whether the registrant (1) filed all reports required to
be filed by Section 13 or 15(d) of the Exchange Act during the past 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 [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definitions of "accelerated
filer and large accelerated filer in Rule 12b-2 of the Exchange Act. (Check
one):

Large accelerated filer [ ]                   Accelerated filer [ ]
Non-accelerated filer [ ]                     Smaller reporting company [X]

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

                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                   PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Indicate by check mark whether the registrant (1) filed all reports required to
be filed by Section 13 or 15(d) of the Exchange Act subsequent to the
distribution of securities under a plan confirmed by the court. Yes [ ] No [ ]

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date. As of November 5, 2009 we had
16,644,659 shares of common stock issued and outstanding.


PART I - FINANCIAL INFORMATION Item 1. Financial Statements. Unaudited Condensed Consolidated Balance Sheets as of September 30, 2009 and December 31, 2008 ........................ 3 Unaudited Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2009 and 2008 ..... 4 Condensed Consolidated Statement of Shareholders' Equity (Deficit) for the year ended December 31, 2008 and the Nine Months Ended September 30, 2009 (unaudited) ................ 5 Unaudited Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2009 and 2008 ............... 6 Notes to Unaudited Condensed Consolidated Financial Statements .. 7 Item 2. Management's Discussion and Analysis or Plan of Operation ....... 11 Item 3. Quantitative and Qualitative Disclosures about Market Risk ...... 12 Item 4. Controls and Procedures ......................................... 12 Item 4T. Controls and Procedures ......................................... 12 PART II - OTHER INFORMATION Item 1. Legal Proceedings ............................................... 13 Item 1A Risk Factors .................................................... 13 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds ..... 13 Item 3. Defaults Upon Senior Securities ................................. 13 Item 4. Submission of Matters to a Vote of Security Holders ............. 13 Item 5. Other information ............................................... 14 Item 6. Exhibits ........................................................ 14 Signatures ................................................................. 14 2
PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS APOLLO ENTERTAINMENT GROUP, INC. CONDENSED CONSOLIDATED BALANCE SHEETS September 30, December 31, 2009 2008 ------------- ------------ (unaudited) (audited) ASSETS Current Assets: Cash ......................................... $ 3,256 $ 2,884 Accounts receivable .......................... 6,113 12,077 Prepaid expenses ............................. 700 1,000 Inventory .................................... 380 5,518 --------- --------- Total Current Assets ....................... 10,449 21,479 Equipment, net ................................. 9,931 12,580 Due from related party ......................... 1,750 - --------- --------- Total Assets ................................. $ 22,130 $ 34,059 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable ............................. $ 32,354 $ 22,137 Accrued liabilities .......................... 1,230 1,251 Accrued wages ................................ 1,148 1,722 Accrued liabilities-related party ............ 136,862 58,119 --------- --------- Total Current Liabilities .................. 171,594 83,229 --------- --------- Total Liabilities ............................ 171,594 83,229 --------- --------- Stockholders' Equity Common stock, $.001 par value 100,000,000 authorized 16,644,625 and 13,110,150 issued and outstanding, respectively .............. 16,645 13,110 Additional Paid in Capital ................... 131,285 64,130 Accumulated deficit .......................... (297,394) (126,410) --------- --------- Total Stockholders' Equity ................. (149,464) (49,170) --------- --------- Total Liabilities and Stockholders' Equity ... $ 22,130 $ 34,059 ========= ========= See accompanying notes to financial statements 3
APOLLO ENTERTAINMENT GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) For the For the Three Months Nine Months Ended Ended September 30, September 30, 2009 2008 2009 2008 ------------ ------------ ------------ ------------ Revenue .......................... $ 13,782 $ 30,700 $ 77,615 $ 30,700 Cost of sales .................... 14,700 28,325 54,571 28,325 ------------ ------------ ------------ ------------ Gross profit ..................... (918) 2,375 23,044 2,375 General administrative expenses .. 59,280 67,253 194,021 67,253 ------------ ------------ ------------ ------------ Loss from operations ............. (60,198) (64,878) (170,977) (64,878) ------------ ------------ ------------ ------------ Income tax expense ............... - - - - Interest expense ................. - (674) (7) (674) ------------ ------------ ------------ ------------ Net Loss ......................... $ (60,198) $ (65,552) $ (170,984) $ (65,552) ============ ============ ============ ============ Basic and Diluted Loss per Common Share .......... $ (0.00) $ (0.01) $ (0.01) $ (0.03) ============ ============ ============ ============ Basic and Diluted Weighted Average Common Shares Outstanding ...... 16,644,625 6,000,000 15,383,816 2,169,963 ============ ============ ============ ============ See accompanying notes to financial statements 4
APOLLO ENTERTAINMENT GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY FOR THE YEAR ENDED DECEMBER 31, 2008 AND THE NINE MONTHS ENDED SEPTEMBER 30, 2009 Total Common Stock Paid in Accumulated Stockholders' Shares Amount Capital Deficit Deficit ---------- ---------- ---------- ----------- ------------- Balance, Decemeber 31, 2007 ............ 100,000 100 139 (239) - Proceeds from Founders shares issued at par value of $.001 on June 25, 2008 4,700,000 4,700 - - 4,700 Issuance of shares of common stock at par value of $.001 for prepaid expenses on July 1, 2008 ....................... 1,200,000 1,200 - - 1,200 Issuance of shares of common stock for repayment of advances and debt ........ 7,090,150 7,090 63,811 - 70,901 Issuance of shares of common stock for services-related party ................ 20,000 20 180 - 200 Net Loss ............................... - - - (126,171) (126,171) ---------- ---------- ---------- ---------- ---------- Balance, December 31, 2008 (audited) ... 13,110,150 13,110 64,130 (126,410) (49,170) Issuance of common stock for repayment of advances and services related party 3,534,475 3,535 67,155 - 70,690 Net Loss ............................... - - - (170,984) (170,984) ---------- ---------- ---------- ---------- ---------- Balance September 30, 2009 (unaudited) . 16,644,625 $ 16,645 $ 131,285 $ (297,394) $ (149,464) ========== ========== ========== ========== ========== See accompanying notes to financial statements 5
APOLLO ENTERTAINMENT GROUP, INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS For the Nine Months Ended September 30, 2009 2008 --------- --------- OPERATING ACTIVITIES: Net loss ............................................. $(170,984) $ (65,552) Adjustments to reconcile net income (loss) to net cash Provided (used) by operating activities: Amortization of prepaid expenses ..................... 300 100 Accrued interest payable-related party ............... 674 Depreciation ......................................... 3,210 - Stock issued for services ............................ 1,000 - Stock issued for related party services, expenses, and accrued liabilities .............................. 38,600 - Changes in Assets and Liabilities: Accounts receivable ................................ 5,964 (13,353) Due from related party ............................. (1,750) Inventory .......................................... 5,138 (10,400) Accounts payable ................................... 10,217 22,622 Accrued wages ...................................... (574) 20,087 Accrued liabilities ................................ (21) - Accrued liabilities-related party .................. 55,270 22,867 --------- --------- Net Cash Used by Operating Activities ............ (53,630) (22,955) --------- --------- INVESTING ACTIVITIES Purchase of equipment ................................ - (6,650) --------- --------- Net Cash Used in Investing Activities ............ - (6,650) --------- --------- FINANCING ACTIVITIES: Proceeds from issuance of common stock Proceeds from issuance of common stock ............... - 4,700 Proceeds from note payable-related party ............. - 45,300 Proceeds from related party advances ................. 54,002 - --------- --------- Net Cash Provided by Financing Activities ........ 54,002 50,000 --------- --------- Net Increase in Cash ................................. 372 20,395 --------- --------- Cash at Beginning of Period .......................... 2,884 - --------- --------- Cash at End of Period ................................ $ 3,256 $ 20,395 ========= ========= Supplemental Disclosures: Cash paid for income taxes ........................... $ - $ - ========= ========= Cash paid for interest ............................... $ - $ - ========= ========= See accompanying notes to financial statements 6
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, NATURE OF OPERATIONS AND USE OF ESTIMATES: NATURE OF BUSINESS AND BASIS OF PRESENTATION Apollo Entertainment Group, Inc. ("the Company" or "Apollo") was incorporated in the State of Florida on April 12, 2007 under the name Pop Starz Publishing Corp. as a wholly owned subsidiary of Pop Starz Records, Inc. On June 24, 2008, the Company changed its name to Apollo Entertainment Group, Inc. Additionally, on the same date, the authorized number of shares was increased from 10,000 to 100,000,000 and the par value of the common stock was changed from $.01 to $.001. The Company, through its subsidiary, Alpha Music Mfg. Corp., offers the services of Audio CD/CD Rom duplication and replication, DVD duplication, and vinyl record pressing throughout the United States. Apollo is a holding corporation. All of our operations are conducted through our subsidiary, Alpha Music Mfg. Corp. which is a Florida corporation, incorporated on June 24, 2008. The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). Management has evaluated subsequent events, and the impact on the reported results and disclosures, through October 22, 2009, which is the date these financial statements were prepared for filing with the Securities and Exchange Commission. PRINCIPLES OF CONSOLIDATION The consolidated financial statements include the accounts of Apollo Entertainment Group, Inc. and its wholly owned subsidiary Alpha Music Mfg. Corp. All intercompany accounts and transactions have been eliminated in consolidation. USE OF ESTIMATES The preparation of financial statements, in conformity with accounting principals generally accepted in the United States of America requires management to make estimates and assumptions, which 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. RECENT ACCOUNTING PRONOUNCEMENTS NEW ACCOUNTING PRONOUNCEMENTS In December 2007, the FASB issued FASB ASC 805-10 (Prior authoritative literature: FASB Statement 141 (R), "Business Combinations," which replaces FASB Statement No. 141). FASB ASC 805-10 is effective for the Company April 1, 2009 and establishes principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, any non controlling interest in the acquiree and the goodwill acquired. The Statement also establishes disclosure requirements which will enable users to evaluate the nature and financial effects of the business combination. FASB ASC 805-10 will change how business combinations are accounted for and will impact financial statements both on the acquisition date and in subsequent periods. The adoption of FASB ASC 805-10 did not have an impact on the Company's financial position and results of operations although it may have a material impact on accounting for business combinations in the future which cannot currently be determined. 7
In April 2009, the FASB issued FASB ASC 805-10-05 (Prior authoritative literature: FSP 141(R)-1 "Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Arises from Contingencies"). For business combinations, the standard requires the acquirer to recognize at fair value an asset acquired or liability assumed from a contingency if the acquisition date fair value can be determined during the measurement period. FASB ASC 805-10-05 is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008, with early adoption prohibited. The Company adopted these provisions at the beginning of the fiscal year April 1, 2009. FASB ASC 805-10-05 will be applied prospectively for acquisitions in fiscal 2010 or thereafter. In May 2009, the FASB issued FASC Topic 855, Subsequent Events, formerly SFAS 165 ("FASC 855"), which requires entities to disclose the date through which they have evaluated subsequent events and whether the date corresponds with the release of their financial statements. FASC 855 is effective for interim and annual periods ending after June 15, 2009. We adopted FASC 855 for reporting in second quarter 2009. Adoption of FASC 855 did not have a material impact on our Consolidated Financial Statements. In June 2009, the FASB issued Accounting Standards Update ("ASU") 2009-01, Topic 105 - Generally Accepted Accounting Principles ("ASU 2009-01"), which superseded all accounting standards in U.S. GAAP, aside from those issued by the SEC. ASU 2009-01 is effective for reporting periods ending after September 15, 2009. We adopted ASU 2009-01 for reporting in the second quarter 2009. The codification does not change or alter existing GAAP. Adoption of ASU 2009-01 did not have a material impact on our Consolidated Financial Statements. FASB ASC 820-10-65-4 (Prior authoritative literature: FASB Staff Position No. FAS 157-4), "Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions that Are Not Orderly," provides additional guidance for estimating fair value in accordance with ASC 820 when the volume and level of activity for the asset or liability have significantly decreased. FASB ASC 820-10-65-4 also provides guidance for determining when a transaction is an orderly one. The Company adopted FASB ASC 820-10-65-4 during the quarter ended June 30, 2009 and the adoption did not have a significant impact on the Company's Consolidated Financial Statements. In August 2009, the FASB issued ASU 2009-05, Fair Value Measurement and Disclosures: Measuring Liabilities at Fair Value ("ASU 2009-05"), which provides clarification on measuring liabilities at fair value when a quoted price in an active market is not available. ASU 2009-05 is effective for the first reporting period beginning after issuance. We do not expect adoption of ASU 2009-05 to have a material impact on our Consolidated Financial Statements. CONTROL BY PRINCIPAL STOCKHOLDERS The directors, executive officers and their affiliates or related parties, own beneficially and in the aggregate, the majority of the voting power of the outstanding shares of the common stock of the Company. Accordingly, the directors, executive officers and their affiliates, if they voted their shares uniformly, would have the ability to control the approval of most corporate actions, including increasing the authorized capital stock of the Company and the dissolution, merger or sale of the Company's assets or business. See Note 5 Subsequent Events. NOTE 2: RELATED PARTY TRANSACTIONS On June 25, 2008, the Company entered into a convertible note payable with the Tucker Family Spendthrift Trust in the amount of $45,300. The convertible note payable bears interest at the rate of 8% per annum, and was due on June 25, 2009. The note holder had the right to convert the note payable into shares of common stock at the rate of $.01 of principal for each share of common stock. On October 14, 2008, the holder made the election to convert the note payable to shares of common stock, and therefore, the Company issued 4,530,000 shares of common stock to the Tucker Family Spendthrift Trust. 8
During the period from July through October 2008 the Tucker Family Spendthrift Trust advanced the Company funds totaling $28,978. On October 14, 2008, the Company issued 2,560,150 shares to the Tucker Family Spendthrift Trust as repayment of advances made to the Company through that date. Through November and December 2008, the Tucker Family Spendthrift advanced the Company an additional $3,789. During the nine months ended September 30, 2009 the Tucker Family Spendthrift Trust advanced the Company $51,330. In February 2009 and June 2009, the Company issued shares totaling 1,319,475 shares as repayment toward the advances. The Company also issued 625,000 shares to the Tucker Family Spendthrift Trust for accrued rent and rent expense during June 2009. At September 30, 2009 and December 31, 2008, Accrued liabilities-related party consists of the following: September 30, December 31, 2009 2008 ------------- ------------ Accrued wages and officers compensation ...... $100,985 $ 45,715 Accrued rent ................................. 1,000 6,000 Accrued interest payable ..................... 1,117 1,117 Due to the Tucker Family Spendthrift Trust ... 33,760 5,287 -------- -------- $136,862 $ 58,119 ======== ======== NOTE 3: STOCKHOLDERS' EQUITY At September 30, 2009, the authorized capital of the Company consists of 100,000,000 shares of common stock with a par value of $.001. There were 16,644,625 shares of common stock issued and outstanding at September 30, 2009. On September 15, 2008, the Company filed an S-1 registration statement with the Securities and Exchange Commission registering 4,553,081 shares of Apollo's common stock which were held by Pop Starz Records, Inc. the former Parent of the Company. These registered shares were distributed by Pop Starz Records, Inc. to the shareholders of Pop Starz Records, Inc. At the time of the distribution, Pop Starz Records, Inc. ceased to be the Company's parent. The registration statement was declared effective on October 3, 2008. NOTE 4: GOING CONCERN The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company does not have sufficient working capital for its planned activity, which raises substantial doubt about its ability to continue as a going concern. Continuation of the company as a going concern is dependent upon obtaining additional working capital and the management of the Company has developed a strategy, which it believes will accomplish this objective through cash flows from operations, short-term loans from its shareholders and additional equity investments, which will enable the Company to continue operations for the coming year. 9
NOTE 5: SUBSEQUENT EVENTS Subsequent to September 30, 2009, the Tucker Family Spendthrift Trust has advanced our subsidiary Alpha Music Mfg. Corp. approximately $20,000. Alpha also received advances of $10,000 from its officers. During October, 2009 our subsidiary Alpha Music Mfg. Corp. entered into an agreement with their leaseholder to accept the sum of $9,300 as payment in full on the past due rent balance of $13,307. Additionally, the landlord agreed to reduce the monthly rent expense from $2,961 to $2,200 per month for the remaining term of the lease. On October 19, 2009, pursuant to a Stock Purchase and Sale Agreement sellers holding 15,950,237 shares of our common stock, including our majority shareholder who beneficially held 14,736,903 shares of common stock sold their shares of common stock for $261,365. In connection with the sale of the shares, our sole officer and director resigned her positions with the Company and appointed a new President, Chief Executive Officer, Secretary and Treasurer, and Director. Also on that date, in connection with the sale of the voting control of the common shares of the Company, the name of the Company was changed to Apollo Capital, Inc. In relation to the change in control, as a post closing obligation of the sale of the common stock, the Company has agreed to spin off its holdings in Alpha Music Mfg. Corp. to those pre-closing shareholders of record of the Company at the close of business on (1) clearance day by the Securities and Exchange Commission of Alpha's S-1 Registration Statement, or (2) December 31, 2009, whichever is later. The company will spin off the shares on the basis of one Alpha share for every one Apollo share beneficially owned prior to the change in control. In relation to the aforementioned sale, the Company entered into an employment agreement with Sigfried M. Klein which provides for an annual salary of $36,000 payable monthly. Previously, the Company had entered into employment agreements with Linford Ellis, Kathleen Ellis and a consulting agreement with Jeffrey Collins. Mr. Ellis was to receive a salary of $4,000 per month, Ms. Ellis a salary of $2,000 per month while Mr. Collins was to receive a fee of $1,000 per month. The employment and consulting are "at will" and may be terminated on 60 days notice by either party. As an inducement for each individual to join Alpha, we issued Mr. Collins 600,000 shares of our common stock and Mr. and Mrs. Ellis each received 300,000 shares of common stock. The shares of common stock were to est ratably over a period of three years and were subject to forfeiture if either employee or consultant did not remain with Alpha for a period of three years. In relation to the aforementioned change in control, and subsequent spin-off the Company entered into agreements with the employees and the consultant whereby they became fully vested in their shares of common stock at the close of business on the day prior to the closing of the Stock Purchase and Sale Agreement, and upon completion of the spin off, all accrued compensation due to them shall be forgiven. Additionally, the employees and consultant also agreed to waive their right to exchange their shares of Apollo for shares in Alpha as consideration for Apollo cancelling all debt owed to Apollo by Alpha. 10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION This Quarterly Report on Form 10-Q contains "forward-looking statements" within the meaning of the "safe harbor" provision of the Private Securities Litigation Reform Act of 1995 regarding future events and the future results of Apollo Entertainment Group, Inc. that are based on current expectations, estimates, forecasts, and projections as well as the beliefs and assumptions of Apollo Entertainment Group, Inc.'s management. Words such as "outlook", "believes", "expects", "appears", "may", "will", "should", "anticipates" or the negative thereof or comparable terminology, are intended to identify such forward-looking statements. These forward-looking statements are only predictions and are subject to risks, uncertainties and assumptions that are difficult to predict. Therefore actual results may differ materially and adversely from those expressed in any forward-looking statements. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this Quarterly Report. Apollo Entertainment Group, Inc. undertakes no obligation to revise or update publicly any forward-looking statements for any reason. GENERAL The following is management's discussion and analysis of certain significant factors affecting the Company's financial position and operating results during the periods included in the accompanying condensed financial statements. Except for the historical information contained herein, the matters set forth in this report are forward-looking statements. Apollo Entertainment Group, Inc was formed in April 2007, as a wholly owned subsidiary of Pop Starz Records, Inc. Pop Starz Records, Inc., the Parent of Apollo Entertainment Group, Inc. announced its intention to spin off Apollo through the payment of a stock dividend at the rate of one share of Apollo for each three shares of Pop Starz Records, Inc. As of this date, Apollo ceased being a subsidiary of Pop Starz Records, Inc. The Company, through its subsidiary, Alpha Music Mfg. Corp., offers the services of Audio CD/CD Rom duplication and replication, audio cassette duplication, DVD duplication, and vinyl record pressing throughout the United States. RESULTS OF OPERATIONS For the three months ended September 30, 2009 we reported revenues and cost of sales of $13,782 and $14,700. For the nine months ended September 30, 2009 we reported revenues and cost of sales of $77,615 and $30,700. There were no comparable revenues or cost of sales reported in the same periods of the prior year as we were in the development stage through July 2008. General and Administrative expenses reported for the three and nine months ended September 30, 2009 were $59,280 and $194,021, respectively. The Company was incorporated in April 2007, and from that date, through July 2008, there was no other activity, therefore, there were no similar expenses in the same period of the prior year. General and Administrative expenses for the three and nine month periods ended September 30, 2009 consisted primarily of legal and accounting fees, wages and salaries, and rent expense. LIQUIDITY At September 30, 2009, we have a deficit in working capital of $149,464, and an accumulated deficit of $297,394. We commenced our primary operations in July 2008. Due to our operating loss, and accumulated deficit, our independent auditor has raised doubts about our ability to continue as a going concern in their report for the year ended December 31, 2008. Management believes that we will be able satisfy our ongoing operations, however, if revenues from operations are not sufficient, to meet these obligations, management will seek additional funding from related party advances or third party financing. There can be no assurance that any financing will be available, or if available, on terms acceptable to us. 11
CAPITAL RESOURCES At September 30, 2009 our current assets consist of cash, accounts receivable, prepaid expenses, and inventory totaling $10,449 as compared to $21,479 at December 31, 2008. Our current liabilities consist of accounts payable, accrued wages and accrued liabilities-related party, $171,594 as compared to $83,229 at December 31, 2008. The increase in the liabilities and the decrease in our current assets is due to our current operations being insufficient to fund our operations. Unless we secure additional financing, of which there can be no assurance, or begin to generate revenues in excess of expenses, we may not be able to meet our obligations as they become due. OFF BALANCE SHEET ARRANGEMENTS We do not have any off balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK CASH AND CASH EQUIVALENTS In the future, we plan to invest our cash and cash equivalents in short-term, fixed rate, highly rated and highly liquid instruments which are reinvested when they mature throughout the year. As of September 30, 2009, we had no cash and cash equivalents subject to any market risk. The Company does not issue or invest in financial instruments or their derivatives for trading or speculative purposes. Although the Company has outstanding debt and related interest expense, market risk of interest rate exposure is currently not material. ITEM 4. CONTROLS AND PROCEDURES. DISCLOSURE CONTROLS AND PROCEDURES Our principal executive and financial officer, based on her evaluation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d(e)) as of the end of the period covered by the Quarterly Report on Form 10-Q has concluded that (i) our disclosure controls and procedures are effective for ensuring that information required to be disclosed by us in reports that we file or submit under the Securities Exchange Act of 1934 is recorded, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms and (ii) our disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us under the Securities Exchange Act of 1934 is accumulated and communicated to our management, including our principal executive and financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosures. ITEM 4T. CONTROLS AND PROCEDURES. MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING Management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act. Our management conducted an evaluation of the effectiveness of our internal control over financial reporting. Based on this evaluation under the, our management concluded that our internal control over financial reporting was effective as of September 30, 2009. 12
This report does not include an attestation report of the company's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the company to provide only management's report in this report. CHANGES IN INTERNAL CONTROLS OVER FINANCIAL REPORTING There were no changes in our internal control over financial reporting that occurred during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. LIMITATIONS Our management, including our Principal Executive Officer and Principal Financial Officer, does not expect that our disclosure controls or internal controls over financial reporting will prevent all errors or all instances of fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system's objectives will be met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and any design may not succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures. Because of the inherent limitation of a cost-effective control system, misstatements due to error or fraud may occur and not be detected. PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS. The Company is not a party to any pending material legal proceedings. ITEM 1A. RISK FACTORS As a smaller reporting company we are not required to provide the information required by this Item. ITEM 2. UNREGISTERED SALE OF EQUITY SECURITIES AND USE OF PROCEEDS. None. ITEM 3. DEFAULTS UPON SENIOR SECURITIES. None. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. No matter was submitted to a vote of the security holders, through the solicitation of proxies or otherwise, during the quarter of the fiscal year covered by this report. 13
ITEM 5. OTHER INFORMATION. Effective October 19, 2009, we moved our corporate address to 20900 N.E. 30th Ave., Aventura, Florida 33180. Our new corporate telephone number is (786) 871-4858. ITEM 6. EXHIBITS (a) Exhibits Exhibit No. Description 31.1 Chief Executive Officer-Section 302 Certification pursuant to Sarbanes-Oxley Act. 31.2 Chief Financial Officer-Section 302 Certification pursuant to Sarbanes-Oxley Act. 32.1 Chief Executive Officer-Section 906 Certification pursuant to Sarbanes-Oxley Act. 32.2 Chief Financial Officer-Section 906 Certification pursuant to Sarbanes-Oxley Act. SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Dated: November 5, 2009 Apollo Entertainment Group, Inc. By: /s/ Anthony Finn -------------------- Anthony Finn Title: Chief Executive Officer 1