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EX-31.1 - CERTIFICATIONS BY THE CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER PURSUANT TO RULE 13A-14(A) OR 15D-14(A) UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002. - American Retail Group, Inc.f10q0912ex31i_americanretail.htm
EXCEL - IDEA: XBRL DOCUMENT - American Retail Group, Inc.Financial_Report.xls
EX-32.1 - CERTIFICATIONS BY THE CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002. - American Retail Group, Inc.f10q0912ex32i_americanretail.htm


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended September 30, 2012
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: 333-146758

AMERICAN RETAIL GROUP, INC.
 (Exact name of registrant as specified in its charter)
 
Nevada
 
13-1869744
(State or other jurisdiction of incorporation)
 
(IRS Employer Identification Number)

c/o Primary Capital LLC
80 Wall Street, 5th Floor
New York, New York 10005
(Address of principal executive offices)

(212) 300-0070
(Registrant’s telephone number, including area code)

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 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.  x Yes   o 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).  x Yes  o No 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer”, “accelerated filer” and smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  o
 
Accelerated filer 
o
Non-accelerated filer    o  (Do not check if a smaller reporting company)
 
Smaller reporting company
x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). x Yes   o No
 
As of November 13, 2012, there were outstanding 22,930,000 shares of the registrant’s common stock, par value $.0001.
 


 
 
 
 
 
TABLE OF CONTENTS
 
   
Page
PART I  
Financial Information
   
       
Item 1.
Financial Statements.
  1
       
 
Condensed Balance Sheets as of September 30, 2012 (Unaudited) and December 31, 2011
 
F-1
       
 
Condensed Statements of Operations for the nine and three months ended September 30, 2012 and 2011 (Unaudited)
 
F-2
       
 
Condensed Statements of Cash Flows for the nine months ended September 30, 2012 and 2011 (Unaudited)
 
F-3
       
 
Notes to Condensed Financial Statements (Unaudited)
 
F-4
       
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
 
2
       
Item 4.
Controls and Procedures
 
4
       
PART II
Other Information
   
       
Item 6.
Exhibits.
 
6
       
 
Signatures
 
7
       
 
Exhibits/Certifications
   
 
 
 

 
 
PART I-FINANCIAL INFORMATION

ITEM 1.     FINANCIAL STATEMENTS
 
AMERICAN RETAIL GROUP, INC.
CONDENSED BALANCE SHEETS
 
   
September 30,
   
December 31,
 
   
2012
   
2011
 
             
ASSETS
           
             
ASSETS:
           
Cash and cash equivalents
  $ -     $ -  
                 
TOTAL ASSETS
  $ -     $ -  
                 
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
               
                 
CURRENT LIABILITIES:
               
Accounts payable and accrued expenses
  $ 40,861     $ 34,866  
Notes Payable - related party
    1,201,000       1,201,000  
Accrued interest - related party
    141,093       50,343  
Loan payable - related party
    30,029       11,919  
                 
Total current liabilities
    1,412,983       1,298,128  
                 
Total liabilities
    1,412,983       1,298,128  
                 
STOCKHOLDERS' (DEFICIT)
               
Preferred stock, $.0001 par value, 10,000,000 shares authorized;
               
  -0- shares issued and outstanding
    -       -  
Common stock, $.0001 par value, 200,000,000 shares authorized;
               
 22,930,000 shares issued and outstanding at
               
  September 30, 2012 and December 31, 2011
    2,293       2,293  
Additional paid-in capital
    283,694       283,694  
Accumulated Deficit
    (1,698,970 )     (1,584,115 )
                 
Total stockholders' (deficit)
    (1,412,983 )     (1,298,128 )
                 
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT)
  $ -     $ -  
 
The accompanying notes are an integral part of these condensed financial statements.
 
 
F-1

 
 
AMERICAN RETAIL GROUP, INC.
CONDENCED STATEMENTS OF OPERATIONS
 
   
Nine Months Ended
September 30
   
Three Months Ended
September 30
 
   
2012
   
2011
   
2012
   
2011
 
                         
OPERATING EXPENSES:
                       
General and administrative expenses
    24,105       344,632       4,166       215,850  
                                 
      Total operating expenses
    24,105       344,632       4,166       215,850  
                                 
LOSS FROM  OPERATIONS
    (24,105 )     (344,632 )     (4,166 )     (215,850 )
                                 
OTHER EXPENSE
                               
  Interest expense
    (90,750 )     (89,910 )     (30,250 )     (30,025 )
                                 
TOTAL OTHER EXPENSE
    (90,750 )     (89,910 )     (30,250 )     (30,025 )
                                 
NET LOSS APPLICABLE TO COMMON STOCKHOLDERS
    (114,855 )     (434,542 )     (34,416 )     (245,875 )
                                 
BASIC LOSS PER COMMON SHARE
  $ (0.01 )   $ (0.02 )   $ (0.00 )   $ (0.01 )
                                 
WEIGHTED AVERAGE SHARES OUTSTANDING
    22,930,000       24,478,606       22,930,000       28,930,000  
 
The accompanying notes are an integral part of these condenced financial statements.
 
 
F-2

 
 
AMERICAN RETAIL GROUP, INC.
CONDENCED STATEMENTS OF CASH FLOWS
 
   
Nine Months Ended
September 30
 
   
2012
   
2011
 
             
CASH FLOW FROM OPERATING ACTIVITIES
           
Net loss
  $ (114,855 )   $ (434,542 )
                 
Adjustments to reconcile net loss to net cash
               
(used in) operating activities:
               
                 
   Expenses paid by related party
            215,802  
                 
Changes in operating assets and liabilities
               
    Accounts payable and accrued expenses
    5,995       (16,691 )
    Accrued interest
    90,750       30,025  
                 
Net cash used in operating activities
    (18,110 )     (205,406 )
                 
CASH FLOWS FROM INVESTING ACTIVITIES:
               
   Acquisition of subsidiary
            (225,000 )
                 
   Net cash used in investing activities
    -       (225,000 )
                 
CASH FLOWS FROM FINANCING ACTIVITIES:
               
    Repayment of Note payable
    -       (100,000 )
    Capital contribution
            59,885  
    Loan from related party
    18,110       -  
                 
   Net cash provided by financing activities
    18,110       (40,115 )
                 
NET  DECREASE IN CASH
               
AND CASH EQUIVALENTS
    -       (470,521 )
                 
CASH AND CASH EQUIVALENTS -
               
BEGINNING OF PERIOD
    -       470,521  
                 
CASH AND CASH EQUIVALENTS -
               
END OF  PERIOD
  $ -     $ -  
 
The accompanying notes are an integral part of these condenced financial statements.
 
 
F-3

 
 
AMERICAN RETAIL GROUP, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2012
(UNAUDITED)
 
Note 1 - Organization and Operations

American Retail Group, Inc., formerly known as Resource Acquisition Group, Inc. (the “Company”), is a Nevada corporation organized on January 27, 1934.  
 
Effective February 11, 2011 the Company acquired 100% of the stock of  American Retail Group, Inc., a Nevada corporation (“ARG”), which at that time owned 100% of the outstanding equity of  TOO “SM Market Retail” (“SM Market”), a limited liability company organized under the laws of Kazakhstan (the “2011 Share Exchange”). Pursuant to the share exchange agreement, on February 11, 2011, stockholders of ARG transferred 100% of the outstanding shares of its common stock held by them, in exchange for an aggregate of 20,000,000 newly issued shares of the Company’s common stock. The shares of common stock of the Company acquired by the stockholders of ARG constituted approximately 96.1% of the Company’s issued and outstanding common stock after giving effect to the 2011 Share Exchange.

American Retail Group, Inc. was incorporated in Las Vegas, Nevada on February 16, 2010. Effective March 10, 2010, the Company consummated a share exchange with the owners of SM Market (the “2010 Share Exchange”). As a result of the share exchange, ARG acquired all of the outstanding equity of SM Market in exchange for issuance of 12,000,000 shares of its common stock (the “Shares”).

Effective April 1, 2011, ARG merged with and into the Company. In connection with the merger the name of the Company was changed from Resource Acquisition Group, Inc. to American Retail Group, Inc.

On July 22, 2011, the Company and the former owners of SM Market entered into a Rescission Agreement whereby the parties agreed to rescind the 2010 Share Exchange and to release each other from any potential claims (the “Rescission”). The parties have determined that it is in their best interest to rescind the 2010 Share Exchange and unwind the transaction. Under the Rescission Agreement, all outstanding equity of SM Market will be returned to the former owners of SM Market and the Shares will be returned to the Company. In connection with the rescission of the 2010 Share Exchange, El Investment Corp. agreed to return to the Company for cancellation 11,201,603 shares of common stock held by it. The Rescission was completed on September 2, 2011.

As a result of the Rescission, the Company ceased to be engaged in the supermarket business in Kazakhstan and returned to be a shell company as such term is defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended. At this time, the Company’s purpose is to seek, investigate, and if such investigation warrants, acquire an interest in business opportunities presented to it by persons or firms who or which desire to seek the perceived advantages of an Exchange Act registered corporation. The Company will not restrict its search to any specific business, industry, or geographical location and the Company may participate in a business venture of virtually any kind or nature.

Note 2 – Basis of Presentation
 
The accompanying unaudited consolidated financial statements of the Company reflects all material adjustments consisting of only normal recurring adjustments which, in the opinion of management, are necessary for a fair presentation of results for the interim periods.  Certain information and footnote disclosures required under accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission, although the Company believes that the disclosures are adequate to make the information presented not misleading.  These consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2011 as filed with the Securities and Exchange Commission.
 
 
F-4

 
 
AMERICAN RETAIL GROUP, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2012
(UNAUDITED)
 
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent 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.  Estimates that are particularly susceptible to change include assumptions used in determining the fair value of securities owned and non-readily marketable securities.
 
The results of operations for the nine and three months ended September 30, 2012 are not necessarily indicative of the results to be expected for the entire year or for any other period.
 
Note 3 – Going Concern

As shown in the accompanying financial statements, the Company had no cash, a deficit working capital, an accumulated deficit, a total deficit, and a net loss through September 30, 2012, which raise substantial doubt about the Company’s ability to continue as a going concern.

The Company’s future success is dependent upon, among other things, its ability to raise additional capital or to secure a future business combination.  There is no guarantee that the Company will be able to raise enough capital or generate revenues to sustain its operations.  Management believes they can raise the appropriate funds needed to support their business plan and acquire an operating company with positive cash flow.

The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amount and classification of liabilities that might be necessary in the event the Company cannot continue in existence. Management intends to seek new capital from owners and related parties to provide needed funds.

Note 4 – Related Party Transactions

On July 12, 2010, ARG issued to certain investors 10% secured convertible notes in the aggregate principal amount of $1,201,000, equal to the cash proceeds of the issuance. The maturity date of the notes was January 12, 2012.

On July 5, 2011, the Company defaulted on its 10% secured convertible notes in the aggregate principal amount of $1,201,000 as the then primary subsidiary of the Company, SM Market, failed to pay its debts as they were becoming due as a result of the management of SM Market starting the unwinding of its operations. As a result of the default, the notes became due and payable at 150% of the principal amount.

In August 2011, Ms. Soledad Bayazit, the Company’s Chief Executive Officer and sole director, purchased all the outstanding notes from the noteholders for the aggregate amount of $1,201,000.

Interest expense on the Note payable – related party aggregated $90,750 and $30,250 for the nine and three months ended September 30, 2012, respectively.

During the nine month period ended September 30, 2012, to finance our operations our chief executive officer has extended loans to us in the total amount of $18,110. The balance of $30,029 remains outstanding and payable on demand without interest.

Note 5 – Income Taxes

In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based on the assessment, management has established a full valuation allowance against all of the deferred tax assets for every period because it is more likely than not that all of the deferred tax assets will not be realized.

Note 6 – Subsequent Events

The Company has evaluated all subsequent events that occurred up to the time of the Company's issuance of its financial statements.
 
 
F-5

 
 
ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
 
FORWARD-LOOKING STATEMENTS
 
CERTAIN STATEMENTS IN THIS REPORT, INCLUDING STATEMENTS IN THE FOLLOWING DISCUSSION, ARE WHAT ARE KNOWN AS "FORWARD-LOOKING STATEMENTS", WHICH ARE BASICALLY STATEMENTS ABOUT THE FUTURE. FOR THAT REASON, THESE STATEMENTS INVOLVE RISK AND UNCERTAINTY SINCE NO ONE CAN ACCURATELY PREDICT THE FUTURE. WORDS SUCH AS "PLANS", "INTENDS", "WILL", "HOPES", "SEEKS", "ANTICIPATES", "EXPECTS "AND THE LIKE OFTEN IDENTIFY SUCH FORWARD-LOOKING STATEMENTS, BUT ARE NOT THE ONLY INDICATION THAT A STATEMENT IS A FORWARD-LOOKING STATEMENT. SUCH FORWARD-LOOKING STATEMENTS INCLUDE STATEMENTS CONCERNING OUR PLANS AND OBJECTIVES WITH RESPECT TO THE PRESENT AND FUTURE OPERATIONS OF THE COMPANY, AND STATEMENTS WHICH EXPRESS OR IMPLY THAT SUCH PRESENT AND FUTURE OPERATIONS WILL OR MAY PRODUCE REVENUES, INCOME OR PROFITS. NUMEROUS FACTORS AND FUTURE EVENTS COULD CAUSE THE COMPANY TO CHANGE SUCH PLANS AND OBJECTIVES OR FAIL TO SUCCESSFULLY IMPLEMENT SUCH PLANS OR ACHIEVE SUCH OBJECTIVES, OR CAUSE SUCH PRESENT AND FUTURE OPERATIONS TO FAIL TO PRODUCE REVENUES, INCOME OR PROFITS. THEREFORE, THE READER IS ADVISED THAT THE FOLLOWING DISCUSSION SHOULD BE CONSIDERED IN LIGHT OF THE DISCUSSION OF RISKS AND OTHER FACTORS CONTAINED IN THIS REPORT AND IN THE COMPANY'S OTHER FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION. NO STATEMENTS CONTAINED IN THE FOLLOWING DISCUSSION SHOULD BE CONSTRUED AS A GUARANTEE OR ASSURANCE OF FUTURE PERFORMANCE OR FUTURE RESULTS.
  
Overview

American Retail Group, Inc., formerly known as Resource Acquisition Group, Inc. (the “Company”), is a Nevada corporation organized on January 27, 1934.  
 
Effective February 11, 2011 the Company acquired 100% of the stock of  American Retail Group, Inc., a Nevada corporation (“ARG”), which at that time owned 100% of the outstanding equity of  TOO “SM Market Retail” (“SM Market”), a limited liability company organized under the laws of Kazakhstan (the “2011 Share Exchange”). Pursuant to the share exchange agreement, on February 11, 2011, stockholders of ARG transferred 100% of the outstanding shares of its common stock held by them, in exchange for an aggregate of 20,000,000 newly issued shares of the Company’s common stock. The shares of common stock of the Company acquired by the stockholders of ARG constituted approximately 96.1% of the Company’s issued and outstanding common stock after giving effect to the 2011 Share Exchange.

American Retail Group, Inc. was incorporated in Las Vegas, Nevada on February 16, 2010. Effective March 10, 2010, the Company consummated a share exchange with the owners of SM Market (the “2010 Share Exchange”). As a result of the share exchange, ARG acquired all of the outstanding equity of SM Market in exchange for issuance of 12,000,000 shares of its common stock (the “Shares”).

Effective April 1, 2011, ARG merged with and into the Company. In connection with the merger the name of the Company was changed from Resource Acquisition Group, Inc. to American Retail Group, Inc.

On July 22, 2011, the Company and the former owners of SM Market entered into a Rescission Agreement whereby the parties agreed to rescind the 2010 Share Exchange and to release each other from any potential claims (the “Rescission”). The parties have determined that it is in their best interest to rescind the 2010 Share Exchange and unwind the transaction. Under the Rescission Agreement, all outstanding equity of SM Market was to be returned to the former owners of SM Market and the Shares were to be returned to the Company. In connection with the rescission of the 2010 Share Exchange, El Investment Corp. agreed to return to the Company for cancellation 11,201,603 shares of common stock held by it. The Rescission was completed on September 2, 2011.
 
 
2

 
 
As a result of the Rescission, the Company ceased to be engaged in the supermarket business in Kazakhstan and returned to be a shell company as such term is defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended.
 
Plan of Operations

At this time, the Company’s purpose is to seek, investigate, and if such investigation warrants, acquire an interest in business opportunities presented to it by persons or firms who or which desire to seek the perceived advantages of an Exchange Act registered corporation. The Company will not restrict its search to any specific business, industry, or geographical location and the Company may participate in a business venture of virtually any kind or nature.  This discussion of the proposed business is purposefully general and is not meant to be restrictive of the Company’s virtually unlimited discretion to search for and enter into potential business opportunities. Management anticipates that it may be able to participate in only one potential business venture because the Company has nominal assets and limited financial resources. This lack of diversification should be considered a substantial risk to shareholders of the Company because it will not permit the Company to offset potential losses from one venture against gains from another.

The Company 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. The Company may acquire assets and establish wholly-owned subsidiaries in various businesses or acquire existing businesses as subsidiaries

Results of Operations
 
We did not have any revenues during the nine and three month periods ended September 30, 2012 and 2011.

We incurred operating expenses of $4,166 and $24,105 for the three and nine month periods ended September 30, 2012, respectively. This compares to $215,850 and $344,632 in expenses during the three and nine month periods, which ended September 30, 2011. The operating expenses incurred in 2011 were primarily due to professional fees in connection with the 2011 Share Exchange.

The Company incurred interest expense in the amount of $30,250 and $90,750 for the three and nine month periods ended September 30, 2012, respectively, on the notes to a related party. This compares to $30,025 and $89,910 in interest expense for the three and nine month periods ended September 30, 2011, respectively, on the convertible notes.

The Company realized a net loss of $34,416 and $114,855 for the three and nine month periods ended September 30, 2012, respectively. This compares to $245,875 and $434,542 in net loss during the three and nine month periods ended September 30, 2011, respectively.
 
Liquidity and Capital Resources
 
As of September 30, 2012 we had $0 in cash. We have financed our operations primarily with the proceeds from the issuance to investors of bridge convertible notes in the aggregate principal amount of $1,201,000 in 2010. In connection with the Rescission, our chief executive officer has purchased from the investors all the outstanding notes. During the nine month period ended September 30, 2012 and up to the date of this report, to finance our operations our chief executive officer has extended loans to us in the total amount of $18,110. The balance of $30,029 remains outstanding and payable on demand without interest.

We believe we cannot satisfy our cash requirements for the next twelve months with our current cash and need to obtain additional financing. We cannot assure investors that adequate financing will be available. In the absence of such financing, we may be unable to proceed with our plan of operations.
 
 
3

 
 
Contractual Obligations

At September 30, 2012, our significant contractual obligations were the 10% bridge convertible notes in the aggregate principal amount of $1,201,000 due on January 12, 2012. All the notes are in default. In August 2011, all the notes were purchased from the investors by the Company’s Chief Executive Officer and sole director.
 
Off-Balance Sheet Arrangements

We do not maintain any off-balance sheet arrangements, transactions, obligations or other relationships with unconsolidated entities that would be expected to have a material current or future effect upon our financial condition or results of operations.
 
Critical Accounting Policies and Estimates
 
Going concern

As shown in the accompanying financial statements, the Company had limited cash, a deficit working capital, an accumulated deficit, a total deficit, and a net loss through March 31, 2012, which raise substantial doubt about the Company’s ability to continue as a going concern.

The Company’s future success is dependent upon, among other things, its ability to raise additional capital or to secure a future business combination. There is no guarantee that the Company will be able to raise enough capital or generate revenues to sustain its operations.  Management believes they can raise the appropriate funds needed to support their business plan and acquire an operating company with positive cash flow.

The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amount and classification of liabilities that might be necessary in the event the Company cannot continue in existence. Management intends to seek new capital from owners and related parties to provide needed funds.
 
ITEM 4T.   CONTROLS AND PROCEDURES.

Disclosure Controls and Procedures

The Securities and Exchange Commission defines the term “disclosure controls and procedures” to mean controls and other procedures of an issuer that are designed to ensure that information required to be disclosed in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Securities Exchange Act of 1934 is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.  The Company maintains such a system of controls and procedures in an effort to ensure that all information which it is required to disclose in the reports it files under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified under the SEC's rules and forms and that information required to be disclosed is accumulated and communicated to principal executive and principal financial officers to allow timely decisions regarding disclosure.
 
 
4

 
 
As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures.  Based on this evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this report.
  
Changes in Internal Controls over Financial Reporting

No change in our system of internal control over financial reporting occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
 
 
5

 
 
PART II-OTHER INFORMATION

ITEM 6.   EXHIBITS.

(a) The following exhibits are filed herewith:
 
31.1
Certifications by the Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
   
32.1
Certifications by the Chief Executive Officer and Chief Financial Officer 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 Document.
   
101.SCH
XBRL Schema Document
   
101.CAL
XBRL Calculation Linkbase Document
   
101.DEF
XBRL Definition Linkbase Document
   
101.LAB
XBRL Label Linkbase Document
   
101.PRE
XBRL Presentation Linkbase Document
 
 
6

 
 
SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 
AMERICAN RETAIL GROUP, INC.
 
       
Date:  November 14, 2012
By:
/s/ Soledad Bayazit
 
   
Chief Executive Officer, Chief Financial Officer and Director
(Principal Executive Officer, Principal Financial Officer and
Principal Accounting Officer)
 
 
 
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