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 UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-K



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


For the Fiscal Year Ended December 31, 2013


Or


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


Commission File Number: 0-49854


OXFORD TECHNOLOGIES, INC.

(Exact name of registrant as specified in its charter)


DELAWARE                                                    04-3615974

(State or other jurisdiction of Incorporation or organization)                                  (I.R.S. Employer Identification No.)

                        

80 WALL STREET, SUITE 818, NEW YORK, NEW YORK             10005

 (Address of principal executive offices)                    (Zip Code)


(212) 809-1200

(Registrant's telephone number, including area code)


Securities registered pursuant to Section 12(b) of the Act:  None


Securities registered pursuant to Section 12(g) of the Act:


Common Stock, $.0001 Par Value

(Title of Class)


Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes [  ]    No [X]


Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes [  ]     No [X]


Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes [X]     No [   ]


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 the Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.    [X]


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


Large accelerated filer   [  ]     Accelerated filer      [  ]      Non-accelerated filer       [  ]      Smaller Reporting Company   [X]





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Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes [   ]     No    [X]


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 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: There is no trading market for the registrant's securities. Accordingly, no estimate as to the market value can be made.


Applicable Only to Corporate Issuers


Indicate the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: 18,564,002 shares of common stock as of March 17, 2014.



OXFORD TECHNOLOGIES INC.

 

 

 

 

 

Table of Contents

 

 

 

 

 

 

 

Page

PART I.

Item 1.     

Description of Business

3

Item 1A.  

Risk Factors

7

Item 1B.  

Unresolved Staff Comments

10

Item 2.      

Description of Properties

10

Item 3.

Legal Proceedings

 

10

Item 4.       

Mine Safety Disclosures

 

10

 

 

 

 

 

PART II.

Item 5.     

Market for Common Equity, Related Stockholder Matters and Issuer Purchase of Equity Securities

10

Item 6.     

Selected Financial Data

11

Item 7.    

Management's Discussion and Analysis or Plan of Operations

11

Item 8.     

Financial Statements and Supplementary Data

15

Item 8A.   

Quantitative and Qualitative Disclosures about Market Risk

15

Item 9.      

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

15

Item 9A.  

Controls and Procedures

15

Item 9B.   

Other Information

17

 

 

 

 

 

PART III.

Item 10.   

Directors and Executive Officers of the Registrant

17

Item 11.   

Executive Compensation

18

Item 12.    

Security Ownership of Certain Beneficial Owners and Management

19

Item 13.    

Certain Relationships and Related Transactions

19

Item 14.   

Principal Accountant Fees and Services

20

 

 

 

 

 

PART IV.

Item 15.  

Exhibits and Financial Statements Schedules

20

 

 

 

 

 

 

Signatures

 

22



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PART I



ITEM 1.  DESCRIPTION OF BUSINESS


Background


Oxford Technologies, Inc. (the "Company") was incorporated in the State of Delaware on March 8, 2002, as a blank check company for the purpose of either merging with or acquiring an operating company with operating history and assets.  In furtherance of our business plan, on June 10, 2002, we voluntarily filed a registration statement on Form 10-SB with the Securities and Exchange Commission to become a reporting company under the Securities and Exchange Act of 1934, as amended. The registration statement became effective on or about August 10, 2002.


On January 24, 2003, Waywood Investment Ltd. (“Waywood”) entered into a Stock Purchase Agreement with Great Admirer Limited, a Hong Kong corporation, ("Great Admirer"), pursuant to which Great Admirer acquired 85%, or 4,250,000 shares, of our then issued and outstanding common stock from Waywood.


On February 12, 2003, we entered into a share exchange agreement with Great Admirer, pursuant to which we issued 13,564,002 shares of our common stock to Great Admirer in exchange for all issued and outstanding capital shares of Axiom Manufacturing Services Limited on a one-to-one basis. Axiom Manufacturing Services Limited is an electronics manufacturing service provider in the United Kingdom and a subsidiary of Great Admirer. As a result of this transaction, Axiom Manufacturing Services Limited became our wholly-owned subsidiary, and the shareholders of Axiom Manufacturing Services Limited became our controlling shareholders. This transaction was accounted for as a reverse acquisition.


Axiom Manufacturing Services Limited (“Axiom”) was incorporated in South Wales, United Kingdom on September 3, 1980, under the name of Aiwa (UK) Ltd., as a wholly-owned subsidiary of Aiwa Co., Ltd. of Japan, to engage in the business of consumer electronics manufacturing.  The name of Aiwa (UK) Ltd. was changed in June 1997 to Aiwa Wales Manufacturing Limited ("AWM"), which was changed again to Axiom Manufacturing Services Limited on April 10, 2002, as a result of the Acquisition of AWM by Great Admirer. Whatever organizational and acquisition costs incurred by Aiwa/Axiom were recorded on the books of Axiom.


Axiom was acquired by Great Admirer on April 10, 2002. Great Admirer was a non-operating shell company and incurred minimal costs to acquire Axiom, and therefore there was no need for adjustment for any costs incurred by Great Admirer to be "pushed down" in the accounts of Axiom.  Additionally, prior to the sale of Aiwa (UK) Ltd., now Axiom, Sony/Aiwa forgave US $11,864,000 of inter-company debt which Axiom recorded as paid-in capital under US GAAP and Sony/Aiwa did not incur any other costs that were required to be "pushed down" to Axiom for the completion of this transaction.


Prior to the acquisition by Great Admirer in April 2002, Axiom had been a wholly-owned subsidiary of Aiwa Europe Ltd., which was itself a wholly-owned subsidiary of Aiwa Co, Limited which was effectively acquired by Sony Corporation on October 1, 2002. As the sole original equipment manufacturer of Aiwa's own-brand consumer electronics products in Europe, Axiom was responsible for manufacturing Aiwa brand consumer electronics products, primarily audio and visual products, on behalf of Aiwa Co. of Japan, for distribution in the UK, France, Germany, Netherlands and Poland.


Axiom, as a subsidiary of Aiwa Europe Ltd., was a redundant manufacturing facility in Europe and Sony/Aiwa Company arranged for its sale to Great Admirer. Sony/Aiwa, rather than abandoning the facility, considered the need of the local economy and thus arranged for the transfer of ownership.


This transaction was accounted for as a reverse acquisition, whereby, under accounting principles generally accepted in the United States of America, after completion of the merger, Oxford filed prior historical financial information of Axiom, on a stand-alone basis, for the year prior to the acquisition (12/31/2002). The continuing operations of the Registrant reflect the consolidated operations of Oxford and its wholly-owned subsidiary, Axiom, commencing on January 1, 2003. The acquisition of Axiom by Great Admirer was treated as a reverse merger in accordance with purchase accounting under ASC 805.


Axiom (formerly Aiwa Wales Manufacturing Limited) was responsible for manufacturing Aiwa brand consumer electronics products, primarily audio and visual products on behalf of Aiwa Japan, for distribution in Europe. In December 2000, due to a gradually decreasing profit margin, Axiom began to provide electronic manufacturing services (EMS) to third parties. In July 2001, Aiwa brand products were terminated and Axiom became entirely an EMS provider in the markets of telecommunication equipment, computer and related products, video, audio, and entertainment products, industrial control equipment, testing and instrumentation products and medical devices.  Axiom offers its



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customers comprehensive and integrated design and manufacturing services, from initial product design to volume production, direct order fulfillment and aftermarket support.


The Company established Axiom MS Limited (“AMS”) on July 29, 2008. AMS was incorporated on July 29, 2008 to seek new business opportunities.


Axiom’s principal office and manufacturing facility is located at Technology Park, Newbridge, South Wales, United Kingdom. AMS is the owner of the above mentioned facility.


In January 2011 the Company transferred all of its 13,564,002 shares in Axiom Manufacturing Services Limited to Axiom MS Limited. In exchange Axiom MS Limited issued 700 shares of its common stock to Oxford Technologies, Inc.


Description of the Business


The Company, through its subsidiary Axiom, provides electronics manufacturing services in the business to business or business to industry sectors and to original equipment manufacturers in the following market sectors:


O

Medical devices

O

Industrial control equipment

O

Domestic appliances

O

Computer and related products

O

Testing and instrumentation products


As a result of efficiently managing costs and assets, Axiom is able to offer its customers an outsourcing solution that represents a lower total cost of acquisition than that typically provided by the OEM's own manufacturing operation. OEM's contract with Axiom is for Axiom to build their products or to obtain services related to product development and prototyping, volume manufacturing or aftermarket support.  In many cases Axiom builds products that carry the brand name of its customers and substantially all of Axiom's manufacturing services are provided on a turnkey basis where Axiom purchases customer specific components from suppliers, assembles the components onto printed circuit boards, performs post production testing and provides the customer with production process and test documentation. Axiom also provides manufacturing services on a consignment basis where material is free issued by the customer for Axiom to build into finished printed circuit boards or products. Axiom offers its customers flexible just in time delivery programs which allow product shipments to be closely coordinated with the customers' inventory requirements.  Additionally Axiom completes the assembly of final product for its customers by integrating the manufactured printed circuit boards into the customers’ finished products.


Axiom operates in several sectors within the electronics and technology markets with most of its customers being located within the United Kingdom.


The Company's Services


The Company believes that demand from OEM's for an integrated outsourcing solution is increasing and that more and more OEM's are looking for a collaborative relationship. By providing a total solution that includes a full range of services allowing it to take customer products from initial design through production to testing, distribution and after- market support, we believe that the Company is well placed to provide the partnership solution OEM's require. The service offered includes:


Engineering and Design The Company offers engineering, design, prototyping and related services that help its customers design their products for optimal manufacturing and testing. The Company's electrical, mechanical and packaging engineers provide customers with circuit design, printed circuit board layout, mechanical and test fixture design services. The Company also provides design for procurement, design for manufacture and design for test services. The Company's design for procurement service identifies areas where the overall cost of the customers' products can be reduced through lower material costs and effective inventory management. The Company's design for manufacture service seeks to achieve defect-free and cost-effective product designs, reduce the product development cycle, create high initial production yields and establish superior product quality. The design for test service focuses on achieving the highest level of fault detection and isolation before products are shipped.


Materials Procurement and Management   Materials procurement and management consists of planning, purchasing, expediting and warehousing of components and materials. The Company's inventory management and volume procurement capability contributes to cost reductions and reduces overall cycle times.


Product Assembly and System Integration  The Company offers assembly and manufacturing services which include assembly of electronic subsystems of final product as well as final assemblies incorporating printed circuit board



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assemblies, complex electromechanical subassemblies, enclosures, power supplies and other components. In addition, the Company's ability to build and configure product to order enables it to postpone final configuration of the customers' product until the end-user specifications are received, thus reducing finished inventory levels for both the Company and its customers. The Company builds a wide range of final products and believes it is well placed to take advantage of the anticipated acceleration in outsourcing of final product assembly and integration.


Testing The Company offers computer-aided testing of assembled printed circuit boards, subassemblies and finished product, which contributes significantly to its ability to deliver high-quality products on a consistent basis. Its test capabilities include manufacturing defect analysis, in circuit tests to check the integrity of the circuits within the board, and functional tests using its own custom designed test equipment and software or equipment and software supplied by its customers. The Company can also provide environmental stress tests of circuit boards and finished products and works with its customers to develop test strategies.


Logistics and Distribution The Company configures and ships customers' products, provides final product packaging and distribution services for completed products as well as direct order fulfillment. It is increasingly delivering final product directly to its customers' distribution channels and to its customers' end-users. The Company believes that these services complement its comprehensive manufacturing solution, and enables its customers to be more responsive to changing market demands and enables them to get their product to market more efficiently and at a lower total cost.


After-Market Services The Company provides a range of after-market services, including repair, refurbishment, re-manufacturing, system upgrades and spare part manufacture. These services are supported by specific information systems and testing technologies and can be tailored to meet the requirements of each customer.


Business Strategy


The goal of the Company is to be the electronics manufacturing services outsourcing provider for leading original equipment manufacturers in high growth segments of the electronics industry. To meet this goal, the Company intends to implement the following strategies: Maintain and develop close, long-term relationships with customers.  The Company's core strategy is to maintain and establish long-term relationships with leading original equipment manufacturers in expanding industries by becoming an integral part of its customers' manufacturing operations. To this end, the Company works closely with its customers throughout the design, manufacturing and distribution process, where the Company offers a flexible and responsive service.  The Company develops strong customer relationships through dedicated account management teams who respond to frequently changing customer design specifications and production requirements.


Focus on high-end products in high growth sectors.  The Company as a relative newcomer to the OEM market place has positioned itself as a supplier of low volume, high added value services in niche markets. Its customers typically fall in the consumer, industrial, military, office equipment and medical sectors with the products manufactured ranging from easy to assemble low cost high volume products for the consumer market to complicated, state of the art, mission critical electronic hardware. The Company's ability to offer both of these services enables it to maintain and expand its customer base.


Deliver complete high and low volume manufacturing solutions globally. The Company believes original equipment manufacturers increasingly require a wide range of specialized engineering and manufacturing services in order that they can reduce their costs and accelerate their time to market and time to volume production. Building on its integrated engineering and manufacturing capabilities, the Company offers services from initial product design and test to final product assembly and distribution to the original equipment manufacturers' customers. This full service capability allows the Company to offer its customers the flexibility to move quickly from design and new product introduction to commercial production and distribution.


Enhance the Company's integrated design, manufacturing and related services. The Company intends to continue to enhance its service offerings to meet the needs of its customers and to control and manage more effectively the supply chain. The Company has expanded its engineering and design capabilities and invested in its new product introduction services and believes that its ability to support customers in these areas provides it with an insight into its customers' future manufacturing requirements.


Generating increased levels of business from the Company's existing customers and expansion of its customer base. The Company believes that organically growing the level of business from its existing customers and expanding its customer base are critical to its future success. The Company continually evaluates the requirements of its existing customers, and looks for opportunities to provide them with additional services thereby strengthening the relationship and increasing the customers' dependence on the Company thus creating long-term business relationships.


The Company pursues new customers by focusing marketing efforts on selected sectors and customers, and increasing its brand awareness to win new business.



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Marketing and Customers


The Company's customer base is primarily in the United Kingdom.  The Company markets its services through selective media advertising, telemarketing, leveraging its contacts in the supply chain and direct contact by sales staff. The following table shows the percentages of the Company's sales by industry sector for the last two years.


Year ended December 31,

2013

2012

 

%

%

 

 

 

Consumer

8.4

8.2

Marine

5.1

6.2

Aerospace / Defence

26.4

8.9

Medical

22.1

38.4

Industrial

38.0

38.3

 

 

 

Total

100.0

100.0



The Company uses a number of database products to identify market sectors and customers and then uses an external telemarketing company to identify the decision makers for a direct approach from the Company's sales force.


Suppliers


The Company maintains a network of suppliers of components and other material used in assembling products, and procures components when a purchase order or forecast is received from a customer. The majority of components are industry standard and available from a number of alternative suppliers but a number of custom-made components are used and in this case a supplier may be the single source of supply. For the years ended December 31, 2013, and 2012, there was one supplier who accounted for 9% (10% 2012) of the Company's purchases.


The Company procures components only when a purchase order has been received from the customer. Although the Company may experience component shortages and long lead times on some components from time to time, the Company has generally been able to reduce the impact of these shortages by working with customers to reschedule deliveries and by purchasing components from alternative sources of supply albeit at slightly higher prices.


Research and Development


For the year ended December 31, 2013, there were research and development expenses of $0.05 million. The Company has plans to conduct more product research and development activities in the next twelve months on a similar level.


Order Backlog


The Company does not believe that a backlog as of any particular date is indicative of future results, because customers may cancel or reschedule deliveries during the agreement term to reflect changes in the customer’s needs. In light of industry practice and our experience, we do not believe that such agreements are meaningful for determining backlog amounts.


Patents and Trademarks


The Company does not own any patents or trademarks.


Competition


The electronic manufacturing services industry is highly competitive. A number of the Company's competitors are substantially larger, have greater financial, operating, manufacturing and marketing resources and have a broader geographic breadth and range of services. As more OEM’s dispose of their manufacturing assets and increase their use of outsourcing, the Company faces increasing pressure to grow its business in order to maintain its competitive position.


Environmental Matters


The Company's operations are subject to certain national and local regulatory requirements relating to the environment, health and safety and waste management, and the use, release, storage, treatment, transportation, discharge, disposal and clean-up of hazardous substances and wastes, as well as practices and procedures applicable to the construction and



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operation of our plants. The Company is in substantial compliance with all applicable requirements and has achieved  ISO 14001, an internationally recognized award. However, material costs and liabilities may arise from these requirements or from new, modified or more stringent requirements.


The Company periodically generates and temporarily handles limited amounts of material that are considered hazardous waste under applicable law. The Company contracts for the off-site disposal of these materials and has implemented a waste management program to address related regulatory issues. The current costs of compliance are not material to the Company, and the Company is not aware of any facts or circumstances that would cause it to incur significant costs or liabilities related to environmental or health and safety regulation compliance in the future. Nevertheless, additional or modified requirements may be imposed in the future which may result in the Company incurring additional expenditures.


Employees


The Company currently has 233 permanent employees. Fluctuations in workload may result in the Company hiring temporary workers. The Company considers its employee relations to be good. The Company does not expect significant changes in the number of employees in the next twelve months.



ITEM 1A. RISK FACTORS


RISK FACTORS


The risks and uncertainties described below are those that we have identified as material.  If any of the events contemplated by the following discussion of risks should occur, our business, financial condition and results of operations may suffer.  As a result, the trading price of our common stock could decline and you could lose part or all of your investment in our common stock.


Risks Related to Our Business


We have experienced losses in the past, and we may never achieve or sustain profitability.


We generated a net income of $1.6 million for December 31, 2013 and $2.5 million for December 31, 2012, our accumulated deficit as of December 31, 2013 was $12.3 million. We may incur additional losses in the future, and we may not sustain profitability, which may cause you to lose all or part of your investment in our common stock.


We need additional capital to implement our current business strategy, which may not be available to us, and if we raise additional capital, it may dilute your ownership in us.


We currently use invoice discounting, and finance lease agreements to meet our short-term cash requirements. In order to grow revenues and sustain profitability, we will need additional capital. As of the date of this annual report, we do not have any arrangements for financing.  Obtaining additional financing will be subject to a number of factors, including market conditions, our operating performance and investor sentiment. These factors may make the timing, amount, terms and conditions of additional financing unattractive to us. We cannot assure you that we will be able to obtain any additional financing. If we are unable to obtain the financing needed to implement our business strategy, our ability to increase revenues will be impaired and we may not be able to sustain profitability.


We have no long-term manufacturing contracts from our customers, and reductions, cancellations or delays in customer orders would adversely affect our operating results.


As is typical in the electronics manufacturing service industry, we do not usually obtain long-term manufacturing orders or commitments from our customers. In addition, customers may cancel their orders, change production quantities or delay production for a number of reasons beyond our control. A significant number of cancellations, reductions or delays in orders by our customers would reduce our revenues and because many of our costs are fixed, this reduction in sales will have a disproportionate adverse effect on our operating results.


We are dependent upon a few large customers, and the loss of any of those customers, or their inability to pay, could materially reduce our revenues, liquidity and cash flows.


A substantial portion of our revenues has been derived from our seven largest customers, three of them accounted for 10% or more of our total sales. For the years ended December 31, 2013 and 2012 sales to those seven largest customers accounted for approximately 83% and 73% of our total sales, respectively. The loss of any of those customers, or their inability to pay, could materially reduce our revenues, liquidity and cash flows.




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Our quarterly operating results, revenues and expenses may fluctuate significantly which could have an adverse effect on the market price of our common stock.


Our operating results, revenues and expenses may fluctuate significantly from quarter to quarter due to a variety of factors including:


·

the timing, size and execution of orders and shipments,


·

lengthy and unpredictable sales cycles,


·

changes in our operating expenses,


·

changes in exchange rates, and


·

fluctuations in general economic conditions.


We believe that period-to-period comparisons of our results of operations are not a good indication of future performance. It is possible that our operating results will be below your expectations.  In that event, the trading price of our common stock will fall.


We potentially bear the risk of price increases associated with shortages in the availability of electronics components.


At various times, there have been shortages of components in the electronics industry, leading to increased component prices. After receiving manufacturing orders, we purchase electronics components to manufacture our customers' products. Although we work with both customers and suppliers to minimize the impact of such shortages, we potentially bear the risk of price increases for these components if we are unable to purchase components at the price level anticipated to support the margins assumed in our agreements with our customers.


If we fail to keep pace with rapid technological changes in our industry, we could lose existing customers and be unable to attract new business.


The electronics manufacturing service market in which we operate is characterized by rapidly changing technologies, frequent new product and service introductions and evolving industry standards. We expect our competitors to provide new and additional service offerings, which will compete with, and reduce the demand for, our services. Our future success will depend, in part, on our ability to enhance the service offering, introduce new technologies and processes to keep pace with technological developments and emerging industry standards, and to address the increasingly sophisticated needs of our customers. If we fail to keep pace with rapid technological changes in our industry, we could lose existing customers and be unable to attract new business.


Our success depends on the continuing trend of original equipment manufacturers to outsource.  Uncertainties and adverse trends affecting the electronics industry or any of our major customers may adversely affect our operating results.


Our revenue growth is dependent upon the continuing trend of original equipment manufacturers to outsource. To the extent that there are no new outsourcing opportunities, our future growth would be unfavorably impacted.  In addition, our business depends on the electronics industry, which is subject to rapid technological changes, short product life cycles and pricing and margin pressure. When these factors adversely affect our customers, we may suffer similar effects.


Fluctuations in the exchange rate between the British Pound Sterling and the United States dollar may adversely affect our operating results.


The functional currency of our operations in the United Kingdom is British Pound Sterling. Results of our operations are translated at average exchange rates into United States dollars for financial reporting purposes. As a result, fluctuations in exchange rates may adversely affect our expenses and results of operations as well as the value of our assets and liabilities. We have not entered into any foreign currency derivative financial instruments; however, we may choose to do so in the future in an effort to manage or hedge our foreign currency risk.


Our assets and officers/directors are located outside of the U.S.; it is difficult to effect service of process and enforcement of legal judgments upon us and our officers and directors.


Our assets, our officers and directors are located outside of the United States. As a result, it may be difficult to effect service of process within the United States and enforce judgment of the US courts obtained against us and our executive



- 8 -






officers and directors. Particularly, our stockholders may not be able to:


·

effect service of process within the United States on us or any of our executive officers and directors;


·

enforce judgments obtained in U.S. courts against us based upon the civil liability provisions of the U.S. federal securities laws;


·

enforce, in a court outside of the United States, judgments of U.S. courts based on the civil liability provisions of the U.S. federal securities laws; and


·

bring an original action in a court outside of the United States to enforce liabilities against us or any of our executive officers and directors based upon the U.S. federal securities laws.


Risks Related to Investment in Our Securities


Our principal stockholder controls a substantial portion of our common stock; investors will have little control over our management or other matters requiring stockholder approval.


Great Admirer Ltd., our principal stockholder, currently owns approximately 94.8% of our outstanding common stock, giving it the ability to control all matters submitted to our stockholders for approval and to control our management and affairs, including the election of our directors; the acquisition or disposition of our assets, the future issuance of our shares and approval of other significant corporate transactions. It may also have interests that differ from yours and may vote in a way with which you disagree and which may be adverse to your interests.


There is no and there may never be a public market for our common stock shares, which may make it difficult for stockholders to sell their shares.


There is currently no market for our common stock and we can provide no assurance that a market will develop. We intend to apply for quotation of our common stock on the OTC Bulletin Board. However, there is no assurance that our shares will be traded on the OTC Bulletin Board or, if traded, that a public market will materialize. If no market is ever developed for our shares, it will be difficult for stockholders to sell their stock.


Our common stock is deemed to be a penny stock.  As a result, trading of our shares may be subject to special requirements that could impede our stockholders' ability to resell their shares.


Our shares constitute penny stock under the Securities Exchange Act of 1934 ("Exchange Act"). The shares will remain penny stock for the foreseeable future. As defined in Rule 3a51-1 of the Exchange Act, penny stocks generally are equity securities with a price of less than $5.00, other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system.


Section 15(g) of the Exchange Act and Rule 15g-2 of the Exchange Act require broker-dealers dealing in penny stocks to provide potential investors with a document disclosing the risks of penny stocks and to obtain a manually signed and dated written receipt of the document before effecting any transaction in a penny stock for the investor's account.  Moreover, Rule 15g-9 of the Exchange Act requires broker-dealers in penny stocks to approve the account of any investor for transactions in such stocks before selling any penny stock to that investor.  This procedure requires the broker-dealer to:


·

obtain from the investor information concerning his or her financial situation, investment experience and investment objectives;


·

reasonably determine, based on that information, that transactions in penny stocks are suitable for the investor and that the investor has significant knowledge and experience to be reasonably capable of evaluating the risks of penny stock transactions;


·

provide the investor with a written statement setting forth the basis on which the broker-dealer made the determination in (ii) above; and


·

receive a signed and dated copy of such statement from such investor, confirming that it accurately reflects the investor's financial situation, investment experience and investment objectives.


Compliance with these requirements may make it more difficult for investors in our common stock to resell the shares to third parties or to otherwise dispose of them.



- 9 -







ITEM 1B.  UNRESOLVED STAFF COMMENTS


 None.



ITEM 2.  DESCRIPTION OF PROPERTIES


The Company's principal operating offices, engineering and manufacturing facilities are situated on approximately 18.77 acres of land located in Technology Park, Newbridge in South Wales, the United Kingdom. The Company’s subsidiary owns the above-mentioned property. The gross internal area is approximately 307,000 square feet. The Company believes that its property is suitable and adequate for its present and proposed needs.


The Company's subsidiary has subleased certain of its spaces on an annual basis for $0.7 million per year. The lease term is from July 1, 2011 through June 30, 2014.


The Company leases approximately 1,000 square feet of office space at 80 Wall Street, Suite 818, New York, NY 10005. The rent is approximately $34,600 per year, and currently the lease is on a month-by-month basis.



ITEM 3.  LEGAL PROCEEDINGS


The Company is not a party to any material pending legal proceedings other than ordinary routine litigation incidental to its business, the outcome of which the Company believes will not have a material adverse effect on its business, financial condition, cash flows or results of operations.



ITEM 4.  MINE SAFETY DISCLOSURES


Not applicable.



PART II



ITEM 5.    MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.



Market Information


There is no public trading market for our common stock.


Holders


As of March 11, 2014 there were 357 holders of record for our common shares. The Company has only one class of stock outstanding.


Dividends


The Company has not paid any dividends since its incorporation and the Company does not have a current plan to pay dividends in the foreseeable future.


There are no restrictions in the Company’s articles of incorporation or bylaws that prevent it from declaring dividends.  The Delaware Revised Statutes, however, do prohibit the Company from declaring dividends, if after giving effect to the distribution of the dividend: (i) the Company would not be able to pay its debts as they become due in the usual course of business; or (ii) the Company’s total assets would be less than the sum of its total liabilities plus the amount that would be needed to satisfy the rights of stockholders who have preferential rights superior to those receiving the distribution.


Securities Authorized for Issuance under Equity Compensation Plans


The Company does not have any equity compensation plans.




- 10 -






Performance graph


Not applicable


Recent Sales of Unregistered Securities


 Not applicable


Purchases of Equity Securities by the Issuer and Affiliated Purchasers


No purchases of the Company’s equity securities were made by it or any affiliated entity during the year ended December 31, 2013.




ITEM 6. SELECTED FINANCIAL DATA


Not required for smaller reporting companies.




ITEM 7.      MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION


This Annual Report on Form 10-K contains forward-looking statements, as such term is defined in the Private Securities Litigation Reform Act of 1995, and information relating to the Company that is based on beliefs of the management of the Company, as well as assumptions made by and information currently available to management of the Company.  When used in this Report, the words "estimate," "project," "believe," "could," "anticipate," "intend," "expect," and similar expressions are intended to identify forward-looking statements. Such statements reflect the current views of the Company with respect to future events based on currently available information and are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated in such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company does not undertake any obligation to release publicly any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.


Overview


The Company was incorporated in the State of Delaware on March 8, 2002, as a blank check company. On February 12, 2003, the Company acquired 100% of the outstanding securities of Axiom Manufacturing Services Ltd. ("Axiom") with the exchange and issuance of 13,564,002 shares of the Company's common stock (the "Merger"). Although the Company is the legal survivor in the Merger and remains the registrant with the SEC, under generally accepted accounting principles in the United States, the Merger was accounted for as a reverse acquisition, whereby Axiom is considered the "Acquirer" for financial reporting purposes as its stockholders controlled more than 50% of the post transaction combined company. Among other matters, this requires us to present all financial statements, prior historical financial and other information concerning Axiom, and requires a retroactive restatement of Axiom's historical stockholders investment for the equivalent number of shares of common stock received in the Merger. Accordingly, the Company's consolidated financial statements present the results of operations of Axiom for the year ended December 31, 2002, and reflect the acquisition of the Company on February 12, 2003, under the purchase method of accounting.  Subsequent to February 12, 2003, the Company's operations reflect the combined operations of the former Oxford and Axiom.


The Company conducts its business through its subsidiary, Axiom Manufacturing Services Limited. Prior to its acquisition by Great Admirer Ltd. in April 2002, Axiom was a wholly owned subsidiary of Aiwa Europe Limited, which was itself a wholly owned subsidiary of the Aiwa Company of Japan. The Aiwa Company of Japan was effectively acquired by Sony Corporation on October 1, 2002. As the sole original equipment manufacturer of Aiwa's own brand products in Europe, Axiom was responsible for producing consumer electronics products, primarily audio and visual products for distribution in the UK, France, Germany, Poland and the Netherlands. In December 2000, due to gradually declining profit margins, Axiom started to provide electronic manufacturing services (EMS) for third parties and in July 2001 production of all Aiwa branded products was terminated, with Axiom becoming solely an EMS provider. On March 31, 2002, Axiom completed its first full year of operations as a contract electronics manufacturing services provider.


On July 29, 2008 the Company acquired 100% of the share capital (1,000 shares) of Axiom M S Limited (“AMS”).


In January 2011 the Company transferred all of its 13,564,002 shares in Axiom Manufacturing Services Limited to Axiom MS Limited. In exchange Axiom MS Limited issued 700 shares of its common stock to Oxford Technologies Inc.



- 11 -







The Company provides electronics manufacturing services in the business to business or business to industry sectors and to original equipment manufacturers in the following market sectors:


O

Medical devices

O

Industrial control equipment

O

Domestic appliances

O

Ministry of Defense products

O

Computer and related products

O

Testing and instrumentation products


As a result of efficiently managing costs and assets, Axiom is able to offer its customers an outsourcing solution that represents a lower total cost of acquisition than that typically provided by the OEM's own manufacturing operation. OEM contracts with Axiom to build their products or to obtain services related to product development and prototyping, volume manufacturing or aftermarket support. In many cases, Axiom builds products that carry the brand name of its customers. Substantially all of Axiom's manufacturing services are provided on a turnkey basis where Axiom purchases customer specific components from suppliers, assembles the components onto printed circuit boards, performs post production testing and provides the customer with production process and test documentation. Axiom also provides manufacturing services on a consignment basis where material is free issued by the customer for Axiom to build into finished printed circuit boards or product. Axiom offers its customers flexible just in time delivery programs which allow product shipments to be closely coordinated with the customers' inventory requirements. Additionally Axiom completes the assembly of final product for its customers by integrating the manufactured printed circuit boards into the customers’ finished products.


Results of Operations


The following table presents, for the periods indicated, the percentage relationship that certain items of the Company's statements of income bear to revenue and the percentage increase or (decrease) in the dollar amount of such items:


Year ended December 31,

2013

 

2012

 

 

US $'000

 

US $'000

 

 

Amount

%

 

Amount

%

% change

 

 

 

 

 

 

 

Net sales

44,235

100%

 

47,609

100%

(7)

Cost of sales

37,360

84%

 

39,649

83%

(6)

Gross profit

6,875

16%

 

7,960

17%

(14)

Operating expenses

6,248

14%

 

6,377

13%

(2)

Operating profit

627

1%

 

1,583

3%

(60)

Other income and expenses

684

2%

 

773

2%

(12)

Income before income taxes

1,311

3%

 

2,356

5%

(44)

Income tax benefit

307

1%

 

183

0%

68

Net income

1,618

4%

 

2,539

5%

(36)



The final results show that there was a decrease in income between 2013 and 2012, and a comparable decrease in the gross profit margin.


Comparison of Fiscal Years Ended December 31, 2013 and 2012


Revenues


Revenue for the years ending December 31, 2013 and 2012 respectively were $44.2 million $47.6 million which is a decrease of 7%. Revenue in 2012 was higher due to there being a number of one off customer contracts. The number of customers was 39 as of December 31, 2013.


Cost of Sales


Cost of sales consists of the material cost of goods sold, direct overhead, direct wages, direct utilities and direct depreciation expense. For the years ending December 31, 2013 and 2012 respectively the Company's cost of sales were



- 12 -






$37.4 million and $39.6 million respectively. The cost of sales as a percentage of sales is 84% compared to 83% for 2012. The small increase is due to the percentage of wages to sales increasing by 1%.


Operating Expenses


Operating expenses consist of selling, general and administrative expenses, plus restructuring costs. For the years ending December 31, 2013 and 2012 respectively these were $6.2 million and $6.4 million. Operating expenses as a percentage of sales is 14% as compared 13% for the prior year. The increase can be attributed to a small increase in the following – training, depreciation, utilities, marketing, computer maintenance and severance costs.


Rental Income


For the year ended December 31, 2013 rental income was $0.8 million compared to $0.9 million for the year ended December 31, 2012. The decrease in rental income was due to part of the building being vacated by the current tenant therefore less rental income charged.


Interest Income


Interest income remains consistent for both of the years ending December 31, 2013 and 2012.


Interest Expense


Interest expense remains consistent for both of the years ending December 31, 2013 and 2012.


Net Income


As a result of the factors discussed above, the Company reported a net income of $1.6 million and $2.5 million for the years ended December 31, 2013 and 2012 respectively. This resulted in basic and diluted net income per share of $0.09 on weighted average common shares outstanding of 18,564,002 for the year ended December 31, 2013, as compared to $0.14 on weighted average common shares outstanding of 18,564,002 for the previous year.


LIQUIDITY AND CAPITAL RESOURCES


Our primary uses of cash are for working capital, capital expenditures and general corporate purposes.


Our cash and cash equivalents totaled $2.4 million and $2.5 million for December 31, 2013 and 2012 respectively.


Operating activities   During the twelve months ended December 31, 2013 and 2012 operating activities provided $0.6 million and $4.9 million respectively. The cash decrease primarily came from a decrease in accounts payable and deferred income.


Investing activities    During the twelve months ended December 31, 2013 cash used in investing activities was $0.8 million as compared to $1.1 million for the previous 12 months. The cash was used to purchase fixed assets.


Financing activities   During the twelve months ended December 31, 2013 cash provided by financing activities was $0.1 million as compared to cash used in financing activities of $3.9 million for the previous year. Much of the cash increase was from line of credit and proceeds from related party.


Some of our short-term liquidity needs were met by invoice discounting, finance lease arrangements, inter-company and bank loans. Our banking facilities are an invoice discounting facility with a maximum advance limit of $3.3 million subject to the level of qualifying sales invoiced. Interest rates are calculated with reference to bank base rates. At December 31, 2013 interest on the invoice discounting facility was charged at 2% above Base (our accounts receivable is collateral for this arrangement), the inter-company loan interest rate is 5%, the finance lease agreements have varying interest rates ranging from 6% to 7.5% and the note payable demands an interest rate of 6%.



The following summarizes our debt and other contractual obligations at December 31, 2013:









- 13 -









 

 

 

 

Description

Amount

 

Term

 

$’000

 

 

Invoice discounting

5

 

Ongoing until facility terminated.

Note payable – related party

1,443

 

Payable in full on December 31, 2013

Inter-company loan

1,245

 

 

Finance lease agreements

154

 

Mix of 3 & 10 year term commencing August 2005 to October 2012

 

 

 

 

 

2,847

 

 



As of the date of this report, we are in compliance with all covenants under our existing credit facilities. The note payable is renewed every year.


For the next two or three years, we will need to spend more capital on the acquisition of further plant, machinery and computer equipment which will enable us to remain competitive in our product offering, and ensure compliance with new European Commission directives as well as responding to changes in technology - smaller components, larger printed circuit boards.


In the event that adequate funding is not available from existing credit facilities, we would consider leasing or working with existing lenders to identify additional sources of financing. We have no current plans to make significant capital expenditures. At present we do not have any arrangements for financing except those mentioned above. While there can be no assurance that we will have sufficient funds over the next twelve months, we believe that funds generated from operations plus borrowings under our invoice discounting facility will be adequate to meet our anticipated operating expenses, capital expenditure and debt obligations for at least the next twelve months. Nevertheless, our continuing operating and investing activities may require us to obtain additional sources of financing. There can be no assurance that any necessary additional financing will be available to us on commercially reasonable terms, if at all.


Off-Balance Sheet Arrangements


The Company does not have any off-balance sheet arrangements.


Seasonality


The Company does not believe that seasonality has had a material effect on its operations.


Inflation


The Company does not believe that inflation has had a material effect on its operations.



CRITICAL ACCOUNTING POLICIES


The preparation of our consolidated financial statements in conformity with accounting principles generally accepted in the United States requires the Company to make estimates and judgments that affect our reported assets, liabilities, revenues, and expenses, and the disclosure of contingent assets and liabilities. The Company bases its estimates and judgments on historical experience and on various other assumptions the Company believes to be reasonable under the circumstances. Future events, however, may differ markedly from the Company's current expectations and assumptions. While there are a number of significant accounting policies affecting our consolidated financial statements, the Company believes revenue recognition and accounts receivable and allowance for doubtful accounts are two critical accounting policies that involve the most complex, difficult and subjective estimates and judgments.


Revenue recognition


The Company recognizes revenue in accordance with SEC Staff Accounting Bulletin No. 13.A "Revenue Recognition." SAB 13.A requires that revenue generally can be recognized when all of the following four criteria are met: (1) Persuasive evidence of an arrangement exists; (2) delivery has occurred or services have been rendered; (3) the selling price is fixed or determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on management's judgments regarding the fixed nature of the selling prices of the products delivered and the collectability of those amounts.


Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided



- 14 -






for in the same period in which the related sales are recorded.  The Company defers any revenue for which the product has not been delivered or is subject to refund until such time when the Company and its customers jointly determine that the product has been delivered or no refund will be required.


Accounts Receivable and Allowance for Doubtful Accounts


The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of customers to make required payments. The allowance is calculated based upon the evaluation and the level of past due accounts and the relationship with, and the economic status of, the Company's customers. The Company analyzes historical bad debts, customer credit worthiness, current economic trends and changes in our customer payment terms when evaluating the adequacy of the allowance for doubtful accounts. At December 31, 2013 there is no allowance for doubtful accounts.


The Company's customer base consists of 39 customers and relationships with customer staff are maintained across the Company's business including the finance department. Most of the revenue growth comes from customers for whom the Company has provided an EMS service for some time and who have a strong financial status. Accounts receivable issues are identified and resolved with the customer prior to the date at which the invoice falls due for payment and issues escalated and resolved through the sales force if necessary. Equally late payments are followed up promptly to ensure the earliest identification of problems and that further product is not shipped to compound the problem. Thus the accounts receivable ledger reflects receivables which are current or one month past due and therefore the need for an allowance for doubtful accounts is small.


Inventories and Reserves


Inventories are valued at the lower of cost and net realizable value after making due allowance for obsolete and slow moving items. Work in progress is valued based on materials at cost, labour time and a proportion of overhead costs. On an annual basis the Company takes a physical inventory verifying the materials on hand and comparing its perpetual records to physical counts.




ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


The audited financial statements required by Item 8 are set forth on pages 24 through 34 of this Form 10-K.




ITEM 8A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK


Not required for smaller reporting companies.




ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE


None.



ITEM 9A. CONTROLS AND PROCEDURES


(a) Evaluation of disclosure controls and procedures. 


Our management, under the supervision and with the participation of the Company’s principal executive officer and principal financial officer, conducted an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of December 31, 2013. Based on that evaluation, the Company’s principal executive officer and principal financial officer have concluded that the Company’s disclosure controls and procedures were effective as of the end of the period covered by this report.


As used herein, the term “disclosure controls and procedures” means controls and other procedures of the Company that are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the rules and forms issued by the SEC. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the



- 15 -






Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive officer or officers and its principal financial officer or officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.


(b) Management’s report on internal control over financial reporting


The management, including our principal executive officer and principal financial officer, is responsible for establishing and maintaining adequate internal controls over our financial reporting. 


The term internal control over financial reporting is defined as a process designed by, or under the supervision of, the issuer's principal executive and principal financial officers, or persons performing similar functions, and effected by the issuer's board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America and includes those policies and procedures that:


(1) Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the issuer;


(2) Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the issuer are being made only in accordance with authorizations of management and directors of the issuer; and


(3) Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the issuer's assets that could have a material effect on the financial statements.


To evaluate the effectiveness of our internal controls over financial reporting, the Company has adopted the framework prescribed by the Committee of Sponsoring Organizations of the Treadway Commission (COSO 1992) and the related guidance provided in Internal Control Over Financial Reporting — Guidance for Smaller Public Companies, also issued by COSO.


Based on the Company’s evaluation of its internal controls as of December 31, 2013, the Company’s principal executive officer and principal financial officer concluded that the Company’s internal controls over financial reporting were effective.


(c) Changes in internal controls over financial reporting


There were no changes in our internal control over financial reporting that occurred during the fiscal year ended December 31, 2013 that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.


(d) Attestation Report of the Registered Public Accounting Firm


This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Pursuant to Item 308(b) of Regulation S-K, management's report was not subject to attestation by our registered public accounting firm pursuant to Rule 2-02(f) of Regulation S-X.



ITEM 9B. OTHER INFORMATION


None.


PART III



ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT


Directors and Executive Officers


Each of our directors is elected by the stockholders to a term of one (1) year and serves until his or her successor is elected and qualified, or until he or she resigns or is removed from office. Each of our officers is elected by the board of directors to a term of one (1) year and serves until his or her successor is duly elected and qualified, or until he or she resigns or is removed from office. The board of directors has no nominating or compensation committees.




- 16 -






The name, address, age and position of our officers and directors are as set forth below:


 

 

 

 

 

 

 

Name

 

Age

 

Office

 

 

 

 

 

Vivian Lam

 

 

45

 

 

President, Chief Financial Officer, Secretary and Director

David Davies

 

 

48

 

 

Managing Director of Axiom Manufacturing Services Ltd.

Woon Chew Chai

 

 

55

 

 

Director


VIVIAN LAM has held the position of president and chief financial officer since February 9, 2010. Ms. Lam has been our director and Corporate Secretary since February 2003. From 2000 to the present, Ms. Lam holds various positions, most recently as Company Secretary, of South Sea Petroleum Holdings Limited, a Hong Kong corporation whose principal business is the exploration and production of crude oil. Currently Ms. Lam also serves as a director of Great Admirer Limited, the parent company of the registrant, and since September 2003, secretary and a director of Cowley Technologies Corp., a magazine distributor in Hong Kong. Cowley is currently inactive.


DAVID DAVIES has held the position of Managing Director of Axiom Manufacturing Services Ltd. since May 18, 2009.  Prior to his re-joining Axiom, Mr. David Davies was Operations and Logistics Director of Tomoe Valve Ltd., a subsidiary of Tomoe Valve Corporation, a global OEM supplying the oil, gas and petrochemical marketplace with triple offset butterfly valves. From February 2001 to March 2007, Mr. Davies was Axiom’s Senior Commercial Manager.


WOON CHEW CHAI was elected as an independent director of the Company in February 2003.  From 1994 to the present, Mr. Chai has been a partner at Michael Chai & Co., a law firm in Kuala Lumpur, Malaysia.  From 1991 to 1994, he was a legal associate with Shook Lin & Bok, a law firm in Kuala Lumpur, Malaysia. From 2002 to the present, he has served as director of South Sea Petroleum Holdings Limited, a Hong Kong corporation, whose principal business is the exploration and production of crude oil.  Mr. Chai holds a Bachelor of Laws (Hons) degree from the University of Buckingham, and a Bachelor of Science (Hons) degree in Chemistry from University of Surrey, UK.  Mr. Chai is qualified as Barrister at Law from Lincoln's Inn, England.  Since September 2003, Mr. Chai has been serving as a director of Cowley Technologies Corp., a magazine distributor in Hong Kong. Cowley is currently inactive.


Significant Employees


There are no significant employees other than our executive officers.


Family Relationships


There are no family relationships among directors or officers.


Involvement in Certain Legal Proceedings


None.


Compliance with Section 16(a) of Exchange Act


Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the officers and directors of the Company as well as persons who own more than 10% of a registered class of the Company's equity securities, to file reports of ownership and changes in ownership with the Securities and Exchange Commission. Officers, directors and greater-than-10% stockholders are required by the regulations of the Securities and Exchange Commission to furnish the Company with copies of all Section 16(a) forms that they file.


To our knowledge, based solely on a review of the copies of such reports furnished to us, all Section 16(a) requirements applicable to our officers, directors and greater-than-10% stockholders were satisfied during the fiscal year ended December 31, 2013.


Code of Ethics


The Company has adopted a Code of Business Conduct and Ethics which applies to its principal executive officer, principal financial officer, principal accounting officer or controller and persons performing similar functions. Any person may request a free copy of such Code by writing to Oxford Technologies, Inc., 80 Wall Street, Suite 818, New York, NY 10005.  The Company will disclose any waivers or amendments to its Code of Business Code and Ethics on a Form 8-K.





- 17 -






Committees of the Board


The Company's equity securities are not publicly traded.  We currently do not have nominating, compensation or audit committees or committees performing similar functions nor do we have a written nominating, compensation or audit committee charter.  Instead, our board of directors performs the functions that an audit committee would customarily perform.  


There has not been any defined policy or procedure requirements for stockholders to submit recommendations or nomination for directors.  There are no specific, minimum qualifications that the board of directors believes must be met by a candidate recommended by the board of directors.  The entire board of directors of the Company will assess candidates, whether submitted by management or shareholders, and make recommendations for election or appointment.  A shareholder who wishes to communicate with the board of directors of the Company may do so by directing a written request addressed to its board of directors at the address appearing on the first page of this report. 


Audit Committee Financial Expert


The board of directors of the Company determined that we do not have a board member that qualifies as an "audit committee financial expert" as defined in Item 407(d)(5)(i) of Regulation S-K, nor do we have a board member that qualifies as "independent" as the term is used in Item 7(d)(3)(iv)(B) of Schedule 14A under the Securities Exchange Act of 1934, as amended.  We believe that our board of directors is capable of analyzing and evaluating our financial statements and understanding internal controls and procedures for financial reporting.  We believe that retaining an independent director who would qualify as an "audit committee financial expert" would be overly costly and burdensome and is not currently warranted.



ITEM 11.  EXECUTIVE COMPENSATION


None of the Company's executive officers receive salary or other kind of compensation from the Company, except David Davies, Managing Director of the Company's subsidiary Axiom Manufacturing Services Ltd., who received approximately $224,850 in salary and approximately $47,634 in pension in 2013. Mr. Davies was appointed Axiom's managing director in May 2009.  In accordance with Item 402(a) (5) of Regulation S-K, the Company has omitted certain columns from the table required by Item 402(b).


The Company has no profit sharing, stock option or other similar programs for the benefit of the Company's executive officers and directors.


Outstanding Equity Awards at Fiscal Year-End Table


The Company does not have any equity incentive plans.  There has been no compensation awarded to, earned by, or paid to any of the named executive officers or directors required to be reported in that table.


Benefit Plans


The Company does not have retirement benefits, or benefits that will be paid primarily following retirement, such as tax-qualified defined benefit plans, supplemental executive retirement plans, tax-qualified defined contribution plans and nonqualified defined contribution plans.


Employment Contracts, Termination of Employment, Change-in-Control Arrangements


The Company does not have employment agreements in place with its executive officers and directors.  There are no contracts, agreements, plans or arrangements, whether written or unwritten, that provides for payment(s) to a named executive officer at, following, or in connection with the resignation, retirement or other termination of a named executive officer, or a change in control of the Company or a change in the named executive officer's responsibilities following a change in control, with respect to each named executive officer.


Compensation of Directors


Directors do not receive any compensation for their services as directors.  The Board of Directors has the authority to fix the compensation of directors.  No amounts have been paid to, or accrued to, directors in such capacity.







- 18 -






ITEM 12.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT


Security Ownership of Certain Beneficial Owners


The following table sets forth certain information regarding the beneficial ownership of our common stock, as of March 17, 2014, by each person who is known by us to own beneficially more than 5% of our outstanding common stock. Except as otherwise indicated, we believe that the beneficial owners of the common stock listed below, based on information furnished by such owners, have sole investment and voting power with respect to such shares, subject to community property laws where applicable.


 

 

Name and Address

 

Number of Shares

 

Percentage

Title of Class

 

Of Beneficial Owner

 

Beneficially Owned

 

of the Class

 

 

 

 

 

 

 

Common Stock

 

Great Admirer Ltd (i)

 

17,601,002

 

94.8% (ii)

 

 

Unit 1002, 10/F, Euro Trade Centre

 

 

 

 

 

 

13-14 Connaught Road and 21-23 Des Voeux Road, Central

 

 

 

 

 

 

Hong Kong

 

 

 

 


(i) Great Admirer Ltd. is owned by South Sea Petroleum Holdings Ltd., a Hong Kong corporation.


(ii) Percentage of ownership is based on 18,564,002 shares of common stock outstanding as of March 17, 2014.


As of the date of this report, no options, warrants or rights to acquire shares have been granted.


Security Ownership of Management


None of our executive officers and directors beneficially owned our securities.


Changes in Control


There are no arrangements, known to the Company, including any pledge by any person of securities of the Company, the operation of which may at a subsequent date result in a change in control of the registrant.



ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS


Transactions with management and others


During the year the Company received additional funding of $100,000 from Great Admirer Limited. Great Admirer Limited is the Company’s holding company. During the final quarter an amount of $60,000 was accrued between Axiom and AMS for services recharged. At December 31, 2013 the Company had outstanding loans to affiliates in the amount of approximately $1,245,000.


As all lenders are related companies of the Company, the loans are unsecured, do not accrue interest, and have no structured repayment arrangements.


Promoters and certain control persons


Please refer to Background in Item 1 (Description of Business) of this report.


Parents


Great Admirer Limited owns 94.8% of the Company’s common stock.  Please also refer to Item 12 (Security Ownership of Certain Beneficial Owners and Management) of this report.


Director Independence

 

We are presently not required to comply with the director independence requirements of any securities exchange, which requires that a majority of a company's directors be independent.  The board of directors of the Company intends to appoint additional members, each of whom will satisfy the director independence guidelines in a manner consistent with the definitions of “independence” set forth in SEC Rule 10A-3 under the Securities Exchange Act of 1934, as amended.




- 19 -







ITEM 14.     PRINCIPAL ACCOUNTANT FEES AND SERVICES


(1)  Audit Fees: The aggregate fees billed by the Company's auditors for professional services and in connection with the audit of the Company's financial statements for the year ended December 31, 2013 and 2012 and reviews of the Company's interim financial statements included in the Company's Forms 10-K and 10-Q for the fiscal years 2013 and 2012 were $70,000 and $52,500.


(2) Audit-Related Fees: The Company's auditors did not bill any additional fees for assurance and related services that are reasonably related to the performance of the audit or review of the Company's financial statements and are not reported under "Audit Fees" above.


(3)  Tax Fees:  $3,500 and $7,000 were paid in 2013 and 2012, respectively, for tax return preparation.


(4)  All Other Fees:  None.


(5)  Board Approval of Services: The Board’s policy is to pre-approve all audit services and all permitted non-audit services (including the fees and terms thereof) to be provided by the Company's independent auditor; provided, however, pre-approval requirements for non-audit services are not required if all such services do not aggregate to more than five percent of total revenues paid by the Company to its accountant in the fiscal year when services are provided.



PART IV



ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES


(a) The following documents are filed as part of this Annual Report:

 

    (1) Financial Statements. Please see the accompanying Index to Consolidated Financial Statements, which appears on page F24-1 of the Annual Report.

  

    (2) Financial Statement Schedules. Financial Statement Schedules have been omitted because the information required to be set forth therein is either not applicable or is included in the Consolidated Financial Statements or the notes thereto.

 

     (3) Exhibits. See Item 15(b) below.

 

(b) Exhibits.


 Exhibit No.                                                   Description and Location             


  3.1

Certificate of Incorporation (Incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement on Form 10-SB filed on June 10, 2002 Commission File No. 0-49854).


 3.2

Bylaws (Incorporated by reference to Exhibit 3.2 to the Company's Registration Statement on Form 10-SB filed on June 10, 2002, Commission File No. 0-49854).


 4.1

Specimen Form of the Company's Stock Certificate (Incorporated by reference to Exhibit 4 to the Company's Amendment No. 1 to the Registration Statement on Form 10-SB, filed on July 29, 2002, Commission File No. 0-49854).


10.1

Invoice Finance Letter Agreement dated March 27, 2006 (Incorporated by reference to Exhibit 10.1 to the Company's Amendment No. 1 to its Annual Report on Form 10-K/A, filed on September 10, 2009, Commission File No. 0-49854).


10.2

Agreement for the Purchase of Debts dated August 2, 2002(Incorporated by reference to Exhibit 10.2 to the Company's Amendment No. 2 to its Annual Report on Form 10-K/A, filed on November 27, 2009, Commission File No. 0-49854). .


14.1

Code of Business Conduct and Ethics (Incorporated by reference to Exhibit 14.1 to the Company's Annual Report on Form 10-KSB for the year ended December 31, 2003).


21.1

Subsidiaries of the Registrant.



- 20 -







31.1

Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002


32.1

Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002


101.INS

XBRL Instance Document

101.SCH

XBRL Taxonomy Extension Schema Document

101.CAL

XBRL Taxonomy Calculation Linkbase Document

101.DEF

XBRL Taxonomy Extension Definition Linkbase Document

101.LAB

XBRL Taxonomy Label Linkbase Document

101.PRE

XBRL Taxonomy Presentation Linkbase Document


(c) Financial Statement Schedules.    Reference is made to Item 15(a) (2) above.



SIGNATURES




Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



OXFORD TECHNOLOGIES, INC.


By: /s/ Vivian Lam


Vivian Lam, President

(Principal Executive Officer and Principal Financial Officer)


Date:  March 31, 2014


Pursuant to the requirement of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Company and in the capacities and on the date indicated.



Signature

Capacity

Date

 

 

 

/s/ Vivian Lam

 

March 31, 2014

Vivian Lam

President and Chief Financial Officer

 

 

(Principal executive officer, Principal financial officer and Principal accounting officer and Director)

 

 

 

 

/s/ Woon Chew Chai

 

 

Woon Chew Chai

Director                                                                                        

March 31, 2014





















- 21 -










REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



To The Board of Directors and Stockholders of

Oxford Technologies, Inc.


We have audited the accompanying consolidated balance sheets of Oxford Technologies, Inc. (the Company) as of December 31, 2013 and 2012, and the related consolidated statements of operations and comprehensive income (loss), changes in stockholders’ equity, and cash flows for each of the years then ended. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.


We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States of America). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.


In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Oxford Technologies, Inc. as of December 31, 2013 and 2012, and the results of its consolidated operations and its consolidated cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.





/s/ Anderson Bradshaw PLLC

Anderson Bradshaw PLLC

Salt Lake City, Utah

March 27, 2013



























- 22 -






OXFORD TECHNOLOGIES, INC.

CONSOLIDATED BALANCE SHEETS


 

 

 

 

 

 

December 31, 2013

 

December 31, 2012

 

 

 

 

 

 

US $'000

 

US $'000

 

ASSETS

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

2,437

 

2,517

 

Accounts receivable

 

 

 

10,689

 

10,724

 

Inventory, net

 

 

 

8,567

 

9,276

 

Line of credit

 

 

 

2,772

 

2,893

 

Other current assets

 

 

 

550

 

282

 

 

Total Current Assets

25,015

 

25,692

 

 

 

 

 

 

 

 

 

 

Property and equipment, net of accumulated depreciation of $22,987 and 28,229

8,643

 

8,823

 

 

 

 

 

 

 

 

 

 

Deferred tax assets - (net non-current)

 

 

1,711

 

1,359

 

Security deposits

 

 

 

46

 

45

 

 

Total Assets

35,415

 

35,919

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

Current Liabilities

 

 

 

 

 

 

 

Accounts payable

 

 

 

8,750

 

9,409

 

Accounts payable, related party

 

 

1,245

 

1,124

 

Taxes payable

 

 

 

1,065

 

1,495

 

Accrued liabilities

 

 

 

2,503

 

2,302

 

Capital Leases - current portion

 

 

90

 

222

 

Note payable - related party

 

 

1,443

 

1,416

 

Deferred income

 

 

 

1,483

 

3,375

 

 

Total Current Liabilities

16,579

 

19,343

 

 

 

 

 

 

 

 

 

Long-term Liabilities

 

 

 

 

 

 

 

Capital leases, non-current portion

 

 

64

 

151

 

 

Total Long-term Liabilities

64

 

151

 

 

Total Liabilities

16,643

 

19,494

 

 

 

 

 

 

 

 

 

Stockholders' Equity

 

 

 

 

 

 

 

Preferred stock, $.0001 par value, 20,000,000 shares authorized, none issued and outstanding

-

 

-

 

Common stock, $.0001 par value, 80,000,000 shares authorized, 18,564,002 shares issued and outstanding

2

 

2

 

Additional paid in capital

 

 

33,478

 

33,478

 

Accumulated other comprehensive income

 

(2,441)

 

(3,170)

 

Accumulated deficit

 

 

 

(12,267)

 

(13,885)

 

 

Total Stockholders' Equity

18,772

 

16,425

 

 

Total Liabilities and Stockholders' Equity

35,415

 

35,919




The accompanying notes are an integral part of the consolidated financial statements.














- 23 -







OXFORD TECHNOLOGIES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)



 

 

 

 

 

 

December 31, 2013

 

December 31, 2012

 

 

 

 

 

 

US $'000

 

US $'000

 

 

 

 

 

 

 

 

 

Net Sales

 

 

 

 

44,235

 

47,609

Cost of Goods Sold

(37,360)

 

(39,649)

 

 

 

Gross Profit

6,875

 

7,960

 

 

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

 

Selling, general and administrative

6,248

 

6,377

 

 

 

Operating Income / (Loss)

627

 

1,583

 

 

 

 

 

 

 

 

 

Other Non-Operating Income and Expenses

 

 

 

 

 

Rental income

 

 

 

782

 

900

 

Interest income

 

 

 

3

 

4

 

Interest expense

 

 

 

(101)

 

(131)

 

Net Income / (Loss) before Income Tax Benefit

1,311

 

2,356

 

 

 

 

 

 

 

 

 

Income tax benefit / (expense)

307

 

183

 

 

Net Income / (Loss)

1,618

 

2,539

 

 

 

 

 

 

 

 

 

Other Comprehensive Income / (Loss)

 

 

 

 

Foreign currency translation and transaction adjustment, net of tax

729

 

407

 

 

 

 

 

 

 

 

 

Comprehensive Income / (Loss), net of tax

2,347

 

2,946

 

 

 

 

 

 

 

 

 

Basic and Diluted Earnings / (Loss) Income per Common Share

0.09

 

0.14

 

 

 

 

 

 

 

 

 

Weighted Average Common Shares Outstanding

18,564,002

 

18,564,002







The accompanying notes are an integral part of the consolidated financial statements.



- 24 -








OXFORD TECHNOLOGIES, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY



 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

Total

 

Total

 

 

Preferred Stock

 

Common Stock

 

Additional

 

Comprehensive

 

Accumulated

 

Stockholders’

 

 

Shares

 

Amount

 

Shares

 

Amount

 

Paid in Capital

 

Income (Loss)

 

Deficit

 

Equity

 

 

 

 

USD $000

 

 

 

USD $000

 

USD $000

 

USD $000

 

USD $000

 

USD $000

Balance, December 31, 2011

 

          -  

 

 $          -   

 

18,564,002

 

 $               2

 

 $          33,478

 

 $                  (3,577)

 

 $       (16,424)

 

 $       13,479

Net income for the year

 

          -  

 

         -  

 

                -

 

         -  

 

                 -  

 

                      -  

 

2,539

 

              2,539

Cumulative foreign currency translation adjustment

 

            -  

 

            -  

 

                   -

 

           -  

 

                     -  

 

               407

 

                   -  

 

          407

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2012

 

          -  

 

 $          -   

 

18,564,002

 

 $               2

 

 $          33,478

 

 $            (3,170)

 

 $       (13,885)

 

 $       16,425

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income for the year

 

         -  

 

         -  

 

                -

 

        -  

 

                 -  

 

                      -  

 

1,618            

 

1,618

Cumulative foreign currency translation adjustment

 

            -  

 

            -  

 

                   -

 

           -  

 

                     -  

 

729

 

                   -  

 

729

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2013

 

         -  

 

 $          -   

 

18,564,002

 

 $               2

 

 $          33,478

 

 $            (2,441)

 

 $       (12,267)

 

 $       18,772





The accompanying notes are an integral part of the consolidated financial statements.






- 25 -






OXFORD TECHNOLOGIES

CONSOLIDATED STATEMENTS OF CASH FLOWS



 

 

 

 

 

December 31, 2013

 

December 31, 2012

 

 

 

 

 

US $'000

 

US $'000

Cash Flows from Operating Activities:

 

 

 

 

 

Net Income

 

 

1,618

 

2,539

 

Adjustments to reconcile net income to net cash provided by (used in) operating activities

 

 

 

 

Depreciation and amortization

 

1,143

 

1,090

 

Deferred taxation

 

 

 

(307)

 

(190)

 

Changes in operating assets and liabilities:

 

 

 

 

 

Accounts receivable

 

 

515

 

(3,724)

 

Inventory

 

 

 

840

 

(1,763)

 

Prepaid expenses

 

 

 

(259)

 

55

 

Accounts payable

 

 

 

(795)

 

4,130

 

Taxes payable

 

 

 

(435)

 

454

 

Accrued liabilities and other payables

 

149

 

877

 

Deferred income

 

 

 

(1,849)

 

1,436

 

Cash provided by operating activities

620

 

4,904

 

 

 

 

 

 

 

 

Cash Flows from Investing Activities:

 

 

 

 

 

Purchase of property and equipment

 

(812)

 

(1,115)

 

Cash used in investing activities

(812)

 

(1,115)

 

 

 

 

 

 

 

 

Cash Flows from Financing Activities:

 

 

 

 

 

Net borrowings under line of credit

 

167

 

(3,885)

 

Proceeds from related party

 

 

160

 

100

 

Debt instrument periodic payment - principal

 

(213)

 

(158)

 

Cash provided by (used in) financing activities

114

 

(3,943)

 

 

 

 

 

 

 

 

Effect of foreign currency translation on cash

 

(2)

 

114

 

 

 

 

 

 

 

 

Net decrease in cash and cash equivalents

 

(80)

 

(40)

 

 

 

 

 

 

 

 

Cash and Cash Equivalents, Beginning

 

2,517

 

2,557

 

 

 

 

 

 

 

 

Cash and Cash Equivalents, Ending

 

2,437

 

2,517

 

 

 

 

 

 

 

 

Supplemental Cash Flow Information:

 

 

 

 

 

Cash Payments For:

 

 

 

 

 

 

 Interest

 

 

 

20

 

131

 

 

 

 

 

 

 

 

 

 Taxes

 

 

 

-

 

-









The accompanying notes are an integral part of the consolidated financial statements.











- 26 -






OXFORD TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2013 AND 2012


1.     NATURE OF OPERATIONS


Oxford Technologies Inc. ("the Company") and its subsidiary, Axiom Manufacturing Services Limited ("Axiom") provide electronic manufacturing services (EMS) to third parties in the markets of telecommunication equipment, computers and related products, video/audio/entertainment products, industrial control equipment, testing and instrumentation products and medical devices. Axiom offers its customers comprehensive and integrated design and manufacturing services, from initial product design to volume production, direct order fulfillment and aftermarket support. The Company's customer base is primarily in the United Kingdom.


The Company was incorporated in the State of Delaware on March 8, 2002. On February 12, 2003, the Company acquired Axiom by issuing 13,564,002 shares of its common stock in exchange for all issued and outstanding capital shares of Axiom that were owned by Great Admirer Limited ("Great Admirer"), a Hong Kong corporation. The Company, as the legal acquirer, was the registrant on that date and remains the registrant with the Securities and Exchange Commission. The merger was accounted for as a reverse acquisition under accounting principles generally accepted in the United States of America. As a result of the acquisition, Axiom became the Company's wholly-owned subsidiary and Great Admirer became the controlling stockholder of the Company.


At the time Great Admirer acquired Axiom in April 2002, Great Admirer was a non-operating shell company and incurred minimal costs to acquire Axiom. Therefore, no costs incurred by Great Admirer were recorded in the accounts of Axiom.


Axiom was incorporated in South Wales, United Kingdom on September 3, 1980, under the name of Aiwa (UK) Ltd. Axiom's name was changed to Axiom Manufacturing Services Limited on April 10, 2002.


On July 29, 2008 the Company acquired 100% of the share capital (1,000 shares) of Axiom M S Limited (“AMS”). AMS is the wholly-owned subsidiary of Oxford.


In January 2011, the Company transferred all of its 13,564,002 shares in Axiom Manufacturing Services Limited to Axiom MS Limited. In exchange Axiom MS Limited issued 700 shares of its common stock to Oxford Technologies, Inc.


Axiom's principal offices and manufacturing facilities are located at Technology Park, Newbridge, South Wales, United Kingdom. AMS is the owner of the above-mentioned facility.


The continuing operations of the Company reflect the consolidated operations of Oxford and its wholly-owned subsidiaries, Axiom and AMS.


2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


Basis of Financial Statement Presentation - The consolidated financial statements include the transactions of the Company and its subsidiaries.  All inter-company accounts and transactions have been eliminated in consolidation.


Net Income/ (Loss) Per Common Share - Income/ (loss) per share of common stock is calculated by dividing the net income/ (loss) by the weighted average number of shares of common stock outstanding during the period. The Company has no potentially dilutive securities in 2013 and 2012. Accordingly, basic and dilutive income (loss) per common share are the same.


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


Foreign Currency Translation - The functional currency of the Company's operations in the UK is the British Pound Sterling. The financial statements of the Company were translated to US dollars using year-end exchange rates for the balance sheets and weighted average exchange rates for the statements of operations and statements of cash flows. Equity transactions were translated using historical rates. Foreign currency translation gains or losses as a result of fluctuations in the exchange rates are reflected in the statements of stockholders’ equity in total comprehensive income or loss.


Revenue Recognition - Sales revenues are generally recognized when an agreement exists and price is determinable, the products are shipped to the customers or services are rendered, net of discounts, returns and allowance and collectability is reasonably assured. In excess of 99% of both revenues generated and the cost of sale incurred relate to the EMS service offering (manufacturing of OEM customer products) with the remaining percentage of revenue and cost of sale relating to the provision of a market return and repair service.


Shipping and Handling Costs – The Company’s shipping costs are split between cost of goods sold and operating expenses for all



- 27 -






periods presented. The amount included in operating expenses was $226,000 in 2013 and $165,200 in 2012.


Warranty – All products manufactured are warranted to be of satisfactory quality, comply with specification and free from defects in components (subject to the Company being able to prove they comply with specification) and workmanship. The products are warranted for a period of 12 months from the date of delivery. In the event that product fails to comply with this warranty, within 5 days of receipt the customer can return the product for replacement or beyond this period return the product for repair. For items repaired, the cost of the repair is expensed at the time it is incurred. Axiom Manufacturing Services does not accrue warranty cost because it estimates it to be immaterial according to past history.


Cash Equivalents - The Company considers highly liquid instruments with original maturity of three months or less to be cash equivalents.


Trade Receivables - Trade receivables are stated at net realizable value. This value includes an appropriate allowance for estimated uncollectible accounts. The allowance is calculated based upon the level of past due accounts and the relationship with and financial status of our customers. The Company did not write off any bad debt during the years ended December 31, 2013 and 2012, and thus has not set an allowance for doubtful accounts for the year ended December 31, 2013.


Inventories - Inventories are stated at the lower of cost or market value. Cost has been determined using the first-in, first-out method. Inventory quantities on-hand are regularly reviewed, and where necessary, reserves for excess and unusable inventories are recorded. Inventory consists of raw materials (components), work in progress and finished goods and is valued as follows: raw materials are valued at the actual cost of the material; both work in progress and finished goods are valued at the standard cost of the material used to

manufacture these products plus an allowance for labor and overhead utilized to get these products to their current stage of completion.


Property, plant and Equipment - Property, plant and equipment are recorded at cost, net of accumulated depreciation. Depreciation is computed on a straight-line basis over estimated useful lives of various asset classes as follows:


Building & building improvements

 

 

20 -  45 years

Machinery & equipment

 

 

5 -  10 years

Fixtures & fittings

 

 

3- 8 years


Upon retirement or sale, the costs of the asset disposed and the related accumulated depreciation are removed from the accounts and any resulting gain or loss is included in the determination of income.  Repairs and maintenance costs are expensed as incurred. Annually, the Company routinely reviews its property and equipment for impairment, and accordingly, will write-down those assets to their estimated fair value.


Income Taxes - Deferred taxes are provided on an asset and liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss carry forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the difference between the reported amounts of assets and liabilities and their tax basis. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.


Fair Value of Financial Instruments - The carrying amounts of the Company's financial instruments, which include cash, accounts receivable, accounts payable, and accrued expenses are representative of their fair values due to the short-term maturity of these instruments.


Concentration of Credit Risk - Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of cash and accounts receivable. The Company maintains cash balances at financial institutions within the UK which are insured by the Financial Services Authority up to limits of approximately $141,000. The Company also maintains cash balances at financial institutions which, from time to time, may exceed Federal Deposit Insurance Corporation insured limits of $250,000 for banks located in the US. The Company has not experienced any losses with regard to its bank accounts and believes it is not exposed to any risk of loss on its cash bank accounts.


Accounts receivable are unsecured and are derived from revenues earned from customers located in the UK. Seven customers represent eighty three percent (83%) and seventy three percent (73%) of sales respectively in 2013 and 2012. Seven customers represent eighty nine percent (89%) and eighty six percent (86%) of Accounts Receivable respectively in 2013 and 2012. The majority of revenue is generated from the UK.


Advertising Costs - The Company expenses advertising costs when incurred. Advertising costs incurred amounted to $6,830 and $25,600 for December 31, 2013 and 2012 respectively.


Comprehensive Income - The Company's comprehensive income for the year ended December 31, 2013 and 2012 includes foreign currency translation gains.



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Funding Arrangements – The Company has an invoice discounting facility provided by its bankers under which the bank advances up to 80% of the value of qualifying invoices on presentation. This is repaid when the customer settles the invoice with the remaining 20% released to the Company less bank charges at this time. The Company is responsible for collecting the debt. Security for advances under this facility is provided by a charge over the accounts receivable of the Company. Axiom Manufacturing Services accounts for this as a transfer of receivables as a secured borrowing with pledge of collateral. Management believes that this treatment complies with guidance provided in FASB ASC 860-30-25. Borrowings on this facility amounted to $0.005 million and $0.3 million December 31, 2013 and 2012, respectively. Borrowings are included within ‘Line of Credit’ on the balance sheet. Interest expense amounted to $0 and $0.008 million for the years ending December 31, 2013 and 2012. The interest charged on this facility is included within interest expense under ‘Other Income and Expenses’. Charges incurred amounted to $0.2 for both the years ended December 31, 2013 and 2012. Charges are included within ‘Operating Expenses’ in the statement of operations and comprehensive income.


Line of Credit – The components of this balance sheet account are shown below:



 

December 31, 2013

December 31, 2012

 

US $'000

US $'000

 

 

 

Current Account

2,740

3,226

Deposit Account

50

49

Invoice Finance

(5)

(304)

Unpresented Checks

(13)

(78)

 

 

 

Total

2,772

2,893


Critical Accounting Policies - The Company considers revenue recognition and the valuation of accounts receivable, allowance for doubtful accounts, and inventory and reserves as its significant accounting policies. Some of these policies require management to make estimates and assumptions that may affect the reported amounts in the Company's financial statement.


Restructuring - To downsize and streamline operations and rationalize manufacturing facilities, the Company has periodically recorded restructuring costs.


Recent Accounting Pronouncements


In June 2009, the FASB established the Accounting Standards Codification (“Codification” or “ASC”) as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in accordance with generally accepted accounting principles in the United States (“GAAP”).  Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) issued under authority of federal securities laws are also sources of GAAP for SEC registrants.  Existing GAAP was not intended to be changed as a result of the Codification, and accordingly the change did not impact our financial statements.  The ASC does change the way the guidance is organized and presented.


We reviewed all other recently issued accounting pronouncements and determined these have no current applicability to the Company or their effect on the financial statements would not have been significant.


3.  PROPERTY AND EQUIPMENT


Property, plant and equipment at December 31, 2013 and 2012, consisted of the following:



 

December 31, 2013

December 31, 2012

 

US $'000

US $'000

 

 

 

Building & building improvements

14,365

14,365

Machinery & equipment

10,687

16,522

Fixtures & Fittings

6,578

6,165

 

31,630

37,052

Less : accumulated depreciation

(22,987)

(28,229)

 

 

 

Total

8,643

8,823





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Depreciation expenses amounted to $1.1 million for both years ended December 31, 2013 and 2012.


4.  INVENTORIES


Inventories at December 31, 2013 and 2012 consisted of the following:



 

December 31, 2013

December 31, 2012

 

US $'000

US $'000

 

 

 

Raw Materials

5,763

3,994

Work in Progress

2,311

4,101

Finished Goods

493

1,181

 

 

 

 

8,567

9,276


5.  INVOICE DISCOUNTING


The invoice discounting facility is a confidential invoice discounting function provided through the invoice finance arm of HSBC Bank where funds are advanced to the Company based on the presentation of qualifying invoices up to a maximum level of $3.3 million. We retain the administration of the sales ledger. There is no maturity date to this facility but it is renewed annually. The invoice discounting facility is secured by the accounts receivable. Interest on borrowings under this facility is charged at a rate of 2% above the Bank of England base rate. The borrowings on this account are shown in Line of Credit on the balance sheet. Charges and borrowings are shown in the table below.



Year ended December 31,

2013

2012

 

US $'000

US $'000

 

 

 

Borrowings

5

304

Charges

170

181

Interest

0

8


6.     NOTE PAYABLE –RELATED PARTY


Axiom MS Limited, the wholly-owned subsidy of Oxford Technologies, Inc. has a note payable to Global Select Limited. The amount owed as at December 31, 2013 was $1.4 million and was payable on demand at December 31, 2013. Interest is charged at 6% per annum and accrued in the amount of $0.08 million for both periods ended December 31, 2013 and 2012. There is no penalty for not paying by December 31, 2013 as the note is renewed annually.


7.    CAPITAL LEASES


The Company is leasing a Flying Probe Machine from HSBC Bank Asset Finance. The lease term is five years with an expiration date of October 2015. At the end of the lease the machine will be owned by the Company. Monthly payments including principal and interest are $6,277.


The Company is leasing computers and laptops from Dell under five hire purchase contracts. The terms are 36 months with commencement dates from March 2011 to May 2012. Monthly payments including principal and interest range from $475 to $1,581.


Future principal lease payments are as follows:


Year Ended December 31 (amounts in thousands of dollars):










     



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Year ended December 31,

US $'000

 

 

2014

90

2015

64

2016

0

2017

0

Total

154

Less current portion

(90)

Long-term portion

64


These assets are being depreciated over their estimated useful economic lives and are included in the depreciation expenses for the years ending December 31, 2013 and 2012.


8. OPERATING LEASES


The Company is leasing seven (7) vehicles.  Each lease runs for three (3) years and the repayments range from $415 to $1,003.


The Company leases approximately 1,000 square feet of office space at 80 Wall Street, Suite 818, New York, NY 10005. The rent is approximately $34,600 per year, and currently the lease is on a month-by-month basis.


Future minimum lease payments are as follows:


Year Ended December 31 (amounts in thousands of dollars):

              

2014

 

$

55

2015

 

 

32

2016

 

 

10

 

 

$

97


9.  DEFERRED INCOME


The Company has deferred income in the form of rental income and sales. The amount of deferred income recorded for the fiscal year ended December 31, 2013 was $1.5 million.


10.   SELLING, GENERAL AND ADMINISTRATIVE EXPENSES


The main expense categories within this category and the values expensed during the years ended December 31 2013 and 2012:



Year ended December 31,

2013

2012

 

US $'000

US $'000

 

 

 

Facilities and maintenance

919

1,110

Other personnel costs

2,346

2,367

Rent and rates

370

376

Bank charges

181

192

Insurance

177

109

Advertising and promotion

91

90

Indirect materials

373

428

Research and development

51

0

Travel and motor

77

120

Other

1,139

1,459

Indirect depreciation

524

126

 

 

 

 

6,248

6,377







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11.  RENTAL INCOME


The Company's subsidiary has subleased certain of its spaces on an annual basis for $0.7 million per year. The lease term is from July 1, 2011 through June 30, 2014.  The Company also leases un-contracted space for $0.03 million per year.


12.  INCOME TAX


The Company has implemented ASC 740 “Accounting for Income Taxes”, which provides for a liability approach to accounting for income taxes.  


The Company's subsidiary, Axiom has UK carry forward losses amounting to $18,614,264 and $19,841,000 in 2013 and 2012, respectively. The US parent company has $1,031,228 of carryforward losses that expire through the year 2031.The components of the deferred tax asset and the related tax benefit, based upon UK and US corporate tax rates of 35% and 20%, are as follows:  


 

Year Ended December 31,

 

2013

 

2012

Deferred tax asset:

US $'000

 

US $'000

 

 

 

 

Net operating loss carry forward, combined

19,645

 

20,761

Excess of depreciation over taxation allowances and other small

 

 

 

temporary differences

46

 

145

Total Components of deferred tax assets

19,691

 

20,906

 

 

 

 

Deferred tax assets

4,688

 

5,427

Valuation allowance UK

(2,617)

 

(3,746)

Valuation allowance US

(360)

 

(322)

Net deferred tax assets

1,711

 

1,359



Deferred income taxes result from the effect of transactions that are recognized in different periods for financial and tax reporting purposes.


Deferred income taxes are recognized for the tax consequences of temporary differences by applying the statutory tax rates to differences between the financial reporting and the tax bases of existing assets and liabilities. These temporary differences related primarily to property and equipment due to the difference between book and tax depreciation.


A reconciliation of income tax expense (benefit) to the amount computed using statutory US tax rate of 35% is as follows:


 

Year Ended December 31,

 

2013

 

2012

 

US $'000

 

US $'000

 

 

 

 

Standard US rate corporation tax charge (35%)

476

 

825

Benefits and taxes related to foreign operations

(532)

 

(1,449)

Change in valuation allowance

(1,091)

 

441

Change in future tax rates

840

 

-

Total taxable expense (benefit)

(307)

 

(183)


  

The US maximum Federal corporate rate is 35% and the minimum is 15%. The effective rates used in the UK were 25% and 20% for the years ended December 31, 2013 and 2012, respectively.


The change in valuation allowances includes an increase of $124,000 related to recognized deferred tax assets in 2013 previously fully reserved by the valuation allowance, resulting from projections of taxable UK income in 2013 and 2014 including taxable differences created in the current and prior years.


Changes in estimates of prior taxes and NOL carryforwards include changes and effects of projected tax rates on NOL carryforwards, including the UK rate used of 25% and 20% during the years ended December 31, 2013 and 2012, respectively.






- 32 -







 

Year Ended December 31,

 

2013

 

2012

 

US $'000

 

US $'000

 

 

 

 

Current:

 

 

 

 Federal

-

 

-

 State

-

 

-

 Foreign

-

 

-

Deferred:

 

 

 

 Federal

-

 

-

 State

-

 

-

 Foreign

(307)

 

(183)

Total taxable expense (benefit)

(307)

 

(183)


The Company adopted the provisions of ASC 740, Accounting for Uncertainty in Income Taxes, on January 1, 2007.  As a result of the implementation of ASC 740, the Company recognized approximately no increase in the liability for unrecognized tax benefits.

The Company has no tax positions at December 31, 2013 and 2012, for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility.


The Company recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses.  During the years ended December 31, 2013 and 2012, the Company recognized no interest and penalties.  The Company had no accruals for interest and penalties at December 31, 2013 and 2012.   


13.   BENEFIT PLANS


The Company maintains a defined contribution plan for all its employees. The Company's contribution to the plan was $0.3 million for the year ended December 31, 2013 and $0.2 million for the previous year.


14.    RELATED PARTY TRANSACTIONS


During the year the Company received additional funding of $100,000 from Great Admirer Limited.  Great Admirer Limited is the Company’s holding company.


During the final quarter an amount of $60,000 was accrued between Axiom and AMS for services recharged.


The Company has a promissory note payable to Global Select Limited for $1,443,000 which became payable on December 31, 2013 and was renewed for an additional year.


The Company also has an amount of $38,000 payable to SSP Holdings Limited.


At December 31, 2013 the total amount the Company had payable to affiliates amounted to approximately $1,245,000.


As all lenders are related companies of Oxford, the loans are unsecured, do not accrue interest, and have no structured repayment arrangements.


15.   SUBSEQUENT EVENTS


ASC 855-16-50-4 establishes accounting and disclosure requirements for subsequent events. ASC 855 details the period after the balance sheet date during which we should evaluate events or transactions that occur for potential recognition or disclosure in the financial statements, the circumstances under which we should recognize events or transactions occurring after the balance sheet date in its financial statements and the required disclosures for such events. We adopted this statement effective June 15, 2009 and have evaluated all subsequent events through the date these financial statements were issued, and determined there are no significant events to disclose.



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