UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

Commission File Number: 0-24721

SOCIAL CUBE INC.

(Formerly Lexon Technologies, Inc.)

(Exact name of registrant as specified in its charter)

Registrant’s telephone number, including area code: (213) 236-3657

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

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

Common Stock, par value $0.001 per share

(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.

oYes þNo

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

oYes þNo

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Sections 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. þ Yes o No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).      þ Yes o No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.                                                               þ

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

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  

oYes  þNo

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 March 8, 2013: $19,124,023 based on the last quoted price of $4.90 per share (there is no current bid or ask price).  The stock is thinly and sporadically traded, therefore, the last quoted price may not be indicative of any actual value in the stock.  

State the number of shares outstanding of each of the issuer’s classes of common equity, as of March 14, 2014: 9,992,535 shares of common stock, $0.001 par value.

DOCUMENTS INCORPORATED BY REFERENCE

None.

Explanatory Note        None

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TABLE OF CONTENTS

Part I

		Page
Item 1.	Business	3
Item 1A.	Risk Factors	4
Item 1B.	Unresolved Staff Comments	4
Item 2.	Properties	5
Item 3.	Legal Proceedings	5
Item 4.	[Removed and Reserved]	6

Part II

Item 5.	Market for Registrant’s Common Equity, related Shareholder Matters and Issuer Purchases of Equity Securities	5
Item 6.	Selected Financial Data	6
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operation	6
Item 7A.	Quantitative and Qualitative Disclosure about Market Risk	9
Item 8.	Financial Statements and Supplementary Data	9
Item 9.	Changes and Disagreements  with Accountants on Accounting and Financial Disclosure	24
Item 9A	Controls and Procedures	24
Item 9B	Other Information	25

Part III

Item 10	Directors, Executive Officers and Corporate Governance	25
Item 11	Executive Compensation	28
Item 12	Security Ownership of Certain Beneficial Owners, management and Related Stockholder Matters	29
Item 13	Certain Relationships and Related Transactions and Director Independence	30
Item 14	Principal Accounting Fees and Services	30
Item 15	Exhibits	31
	Signatures	31

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PART I

Item 1.Business.

History and Development of the Company

Lexon Technologies, Inc. ("the Company", "Lexon" or “Social Cube”) was incorporated in April 1989 under the laws of state of Delaware, and owned 90.16% of Lexon Semiconductor Corporation ("Lexon Semi" or formerly known as Techone Co., Ltd ("Techone")) which had developed and manufactured Low Temperature Cofired Ceramic (LTCC) components, including LTCC wafer probe cards, LTCC circuit boards, LTCC Light Emitting Diode (LED) displays and related products for the semiconductor testing and measurement, custom Printed Circuit Board (PCB), and cellular phone industries.  

Initially registered as California Cola Distributing Company, Inc., the Company changed its name four times; first to Rexford, Inc. in October 1992, second to Lexon Technologies, Inc. in July 1999, third to Social Planet Inc. in January 2012 and to the current name Social Cube Inc. in February 2012.  From July 1999 through October 2009, the Company performed three reverse acquisitions and recapitalizations, which resulted in the change of the control of the Company each time.

On January 1, 2011, all assets and all of the liabilities of the Paragon Toner Division of Lexon were exchanged for existing Lexon shares, specifically 133,300,000 shares held by James Park and 66,700,000 shares held by Young Won.  The Internet properties namely 7inkjet.com, nanoninket.com and Yourcartidges.com remained with Lexon, and became the main operation of the Company.

The Company’s Board of Directors and a majority of shareholders on June 6, 2011 approved a reverse share split of the Company’s common stock at a ratio of 641:1 from 315,789,721 shares to 492,535issued and outstanding shares.

On October 3, 2011, Lexon entered into four subscription agreements: (1) Senderbell Holdings Limited subscribed to 900,000 common unregistered shares for $77,143; (2) Treasure Chest Holdings Limited subscribed to 900,000 common unregistered shares for $77,143; (3) Blueberry Enterprises Limited subscribed to 900,000 common unregistered shares for $77,143; and (4) Hockworth Holdings Limited subscribed to 800,000 common unregistered shares for $68,571.

On October 26, 2011, a shareholder resolution was executed to nominate and accept Byung Jin Kim, Eugene Lee and KyuSeok Lee as Directors (effective as of November 26, 2011) and to change the corporate name from Lexon to Social Planet Inc.

On November 23, 2011, the Company issued 6,000,000 shares of its common stock to Liveplex Co., Ltd. at a purchase price of approximately $0.417 per share for an aggregate of $2,500,000 representing approximately 60% of the total outstanding common stock.

On November 25, 2011, James Park, Young Won, Bong S. Park and Hyung Soon Lee resigned as the Directors and Officers of the Company.

In November 30, 2011, the Company acquired 335,574 shares of Asianet Co., Ltd. From Liveplex Co., Ltd., a parent company, for a consideration of $1,500,000.  As a result of this subscription, the Company owns 63% of Asianet Co., Ltd.

On December 30, 2011, a majority of the Company’s directors appointed Byung Jin Kim as Chief Executive Officer and Jonathan Lee as Chief Financial Officer of the Company effective as of January 1, 2012.

On January 31, 2012, the Company filed a Certificate of Amendment to the Company’s Certificate of Incorporation under the laws of the state of Delaware, changing the name of the Company from Lexon to Social Planet Inc.

On February 6, 2012, a majority of the Company’s directors and a majority of the Company’s shareholders approved changing the name of the Company from Social Planet Inc. to Social Cube Inc.

On February 16, 2012, the Company filed a Certificate of Amendment to the Company’s Certificate of Incorporation under the laws of the state of Delaware, changing the name of the Company from Social Planet Inc. to Social Cube Inc.

The Financial Industry Regulatory Authority, Inc. (FINRA) approved the Company’s corporate name change to Social Cube Inc., effective as of March 28, 2012, and its ticker symbol change to “SOCC”, effective as of April 2, 2012.

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On June 3, 2013, the board of directors of the Company decided to implement a “going dark” process to delist the Company’s common stock from the OTC and deregister from the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

On June 7, 2013, the Company announced the “going dark” process through a press release and filing of a current report on Form 8-K with the U.S. Securities and Exchange Commission (“SEC”).

On June 18, 2013, the Company filed a Form 25 with the SEC to delist its common stock from the OTC and to deregister the Company’s common stock from Section 12(b) of the Exchange Act.

On June 28, 2013 the Company filed a Form 15 with the SEC to suspend the Company’s reporting requirements under Section 15(d) of the Exchange Act.  

Despite the Company’s filing of a Form 25 and Form 15 with the SEC on June 18, 2013 and June 28, 2013, respectively, the Company has considered reversing its “going-dark” process and relisting its common stock on the OTC, and has thereby continued compliance to its reporting requirements pursuant to Section 15(d) of the Exchange Act.   

Business Overview

Current Business Model

After Liveplex Co., Ltd. obtained a 60% controlling interest of the Company, Social Cube has refocused itself as a holding company of social gaming and social networking companies.  Social Cube’s strategy is to grow both organically and by acquisition, and to leverage its existing network of social gaming and networking assets together with other social networking companies and their related technologies.

Our majority shareholder is Liveplex Co., Ltd., an on-line game developer and publisher in Korea, which is publicly listed on the Korea Securities Dealers Automated Quotations (KOSDAQ:050120), a trading board of the Korea Exchange (KRX).   Liveplex Co., Ltd. is a leading developer and service provider of mobile and massively multiplayer online role-playing games.

We conduct our business through two business segments as follows:

Social Cube Networks Co., Ltd.

We have a 63% ownership interest in Social Cube Networks Co., Ltd. (formerly AsiaNet Co., Ltd.), a privately held company incorporated in the Republic of Korea, which publishes the following game titles, primarily in the Philippines:  Dragona, Genghis Khan, Weapons of War, Cross Fire, Special Force, Twelve Sky 2 and iDate.  

Social Cube Media.com, Inc.

We have a 100% ownership interest in Social Cube Media.com, Inc. (formerly Gameclub.com Inc.), a privately held company incorporated in the state of California, which publishes online games in the United States.

While our chief decision makers monitor the revenue streams of our various products and services, operations are managed and financial performance is evaluated on a company-wide basis. Accordingly, we consider our operations to be aggregated in one reportable operating segment.

Competition

We compete primarily with other online and social networking and MMORPG developers, publishers and operators in Asia and the United States.  These include, but are not limited to, Entertainment Arts Inc., Zynga Inc., Activision Blizzard, Inc., NCSoft Corporation and Perfect World Co., Ltd.  We compete on the basis of the quality or features of our online games, our operational infrastructure and expertise and our ability to enhance our players’ experience through social networking.

Our Employees

 

As of March 14, 2014, the Company employed two full-time employees.

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Item 1A.Risk Factors.

Not Applicable.

Item 1B.Unresolved Staff Comments.

None.

Item 2.Properties.

The Company’s headquarters are located in Los Angeles, California.  The Company utilizes communal office space at 515 S. Flower Street, Suite 3600, Los Angeles, California 90071. The Company’s lease with Regus PLC commenced on February 1, 2014 for a period of three months, renewable for consecutive three-month periods, at a monthly rental rate of $299.

Item 3.Legal Proceedings.

To the best knowledge of management, there are no pending legal proceedings against us.

The following two legal claims, which were instigated by the plaintiffs against the Company during the 2008 calendar year, have been fully settled.  

On July 14, 2008, Advanced Digital Technology Co. Ltd., a Korean corporation (“ADT”), filed a claim against Lexon and certain named individuals who are former officers of the Company.  The claim alleges breach of an agreement to settle an earlier dispute, involving ADT's investment of $150,000 in Lexon on or about January 16, 2007 and ADT's subsequent unilateral decision to rescind and demand a refund of this investment.  The total amount of damages claimed under the pending lawsuit is the investment amount of $150,000 plus filing costs, interest and attorney fees for an aggregate amount of $178,522.  On November 9, 2010, judgment was entered against Lexon Technologies for the amount of $206,547.95.  On approximately November 23, 2011, this case was settled for $205,000.  This settlement effectively concludes this legal proceeding.

On September 5, 2008, Vivien and David Bollenberg, a current shareholder (the “Bollenbergs”), filed a claim against Lexon and other third parties, including Byung Hwee Hwang (also referred to as "Ben Hwang") and other financial agents and institutions involved in the alleged fraudulent transaction.  The filed complaint alleges that Ben Hwang together with his representatives, including his accountant, escrow agent and real estate agent/broker, made certain representations to and solicited the Bollenbergs to make an investment in several companies and ventures including Lexon with the intent to misappropriate the solicited funds for personal use. The Bollenbergs allege that they invested a total of $1,500,000 among and between the various companies and ventures recommended by Ben Hwang, of which investment amount approximately $550,000 was invested in Lexon ($150,000 for 600,000 shares at $0.25 per share and $400,000 initially invested in Lexon Korea and later converted into 1,150,000 shares in Lexon for a total of 1,750,000 shares in Lexon). On April 1, 2011, after a trial was concluded, judgment was entered in favor of the Lexon Technologies whereby Lexon was not found liable for any causes of action brought by the Bollenbergs.  The Bollenbergs were served with a filed stamped copy of the judgment on June 2, 2011.  Thereafter, the Bollenbergs filed an appeal on December 2, 2011 and insisted that they were not served with the judgment on June 2, 2011 and filed the instant Motion to Vacate the Dismissal (or the Petition for Rehearing).  This appeal by the Bollenbergs was denied by the California Court of Appeals (4^th District) in February 2012, officially concluding this legal proceeding.

Item 4.[Removed And Reserved.]

PART II

Item  5.  Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Bid and ask quotations for our common shares are routinely submitted by registered broker dealers who are members of the National Association of Securities Dealers on the NASD Over-the-Counter Electronic Bulletin Board. These quotations reflect inner-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions. The high and low bid information for our shares for each quarter for the last two years, so far as information is reported, through the quarter ended December 31, 2013, as reported by the Bloomberg Financial Network, are as follows:

2013 FISCAL YEAR		High		Low
First Quarter		$5.90		$5.90
Second Quarter		$5.90		$5.90
Third Quarter		$5.90		$5.90
Fourth Quarter		$5.90		$5.90

2012 FISCAL YEAR		High		Low
First Quarter		$5.90		$5.90
Second Quarter		$5.90		$5.90
Third Quarter		$5.90		$5.90
Fourth Quarter		$5.90		$5.90

Dividend Policy

We have never declared a cash dividend on our common stock and our Board of Directors does not anticipate that we will pay cash dividends in the foreseeable future. Any future determination to pay cash dividends will be at the discretion of our Board of  Directors and will depend upon our financial condition, operating results,  capital  requirements,  restrictions contained in our agreements and other factors which our Board of Directors deems relevant.

Securities Authorized For Issuance Under Equity Compensation Plans

None.

Recent Sales of Unregistered Securities

For the years ended December 31, 2013 and 2012, we issued the following securities without registration under the Securities Act of 1933, as amended. These securities were issued on the reliance of an exemption provided by Section 4(2) of the Securities Act.

On October 3, 2011, Lexon entered into four subscription agreements: (1) Senderbell Holdings Limited subscribed to 900,000 common unregistered shares for $77,143; (2) Treasure Chest Holdings Limited subscribed to 900,000 common unregistered shares for $77,143; (3) Blueberry Enterprises Limited subscribed to 900,000 common unregistered shares for $77,143; and (4) Hockworth Holdings Limited subscribed to 800,000 common unregistered shares for $68,571.

On November 23, 2011, the Company issued 6,000,000 shares of its common stock to Liveplex Co., Ltd. at a purchase price of approximately $0.417 per share for an aggregate of $2,500,000 representing approximately 60% of the total outstanding common stock.

Item 6.Selected Financial Data.

Not Applicable.

Item 7.Management's Discussion and Analysis of Financial Condition and Results of Operations.

You should read this section together with our financial statements and related notes thereto included elsewhere in this report.

We intend that our forward-looking statements be subject to the safe harbors created by the Securities and Exchange Act of 1934, as amended. The forward-looking statements are generally accompanied by words such as “intend,” “anticipate,” “believe,” “estimate,” “expect” and other similar words and statements and variations or negatives of these words. Our forward-looking statements are based on current expectations, forecasts and assumptions and are subject to risks, uncertainties and changes in condition, significance, value and effect. Such risks, uncertainties and changes in condition, significance, value and effect could cause our actual results to differ materially from our anticipated outcomes. Although we believe that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate. Therefore, we can give no assurance that the results implied by these forward-looking statements will be realized. The inclusion of forward-looking information should not be regarded as a representation by our company or any other person that the future events, plans or expectations contemplated by Social Cube Inc. will be achieved. We disclaim any intention or obligation to update or revise any

6

forward-looking statements contained in the documents incorporated by reference herein, whether as a result of new information, future events or otherwise.

Overview

Lexon Technologies, Inc. ("the Company", "Lexon" or “Social Cube”) was incorporated in April 1989 under the laws of state of Delaware, and owned 90.16% of Lexon Semiconductor Corporation ("Lexon Semi" or formerly known as Techone Co., Ltd ("Techone")) which had developed and manufactured Low Temperature Cofired Ceramic (LTCC) components, including LTCC wafer probe cards, LTCC circuit boards, LTCC Light Emitting Diode (LED) displays and related products for the semiconductor testing and measurement, custom Printed Circuit Board (PCB), and cellular phone industries.  

Initially registered as California Cola Distributing Company, Inc., the Company changed its name four times; first to Rexford, Inc. in October 1992, second to Lexon Technologies, Inc. in July 1999, third to Social Planet Inc. in January 2012 and to the current name Social Cube Inc. in February 2012.  From July 1999 through October 2009, the Company performed three reverse acquisitions and recapitalizations, which resulted in the change of the control of the Company each time.

On January 1, 2011, all assets and all of the liabilities of the Paragon Toner Division of Lexon were exchanged for existing Lexon shares, specifically 133,300,000 shares held by James Park and 66,700,000 shares held by Young Won.  The Internet properties namely 7inkjet.com, nanoninket.com and Yourcartidges.com remained with Lexon, and became the main operation of the Company.

The Company’s Board of Directors and a majority of shareholders on June 6, 2011 approved a reverse share split of the Company’s common stock at a ratio of 631:1 from 315,289,722 shares to 499,667 issued and outstanding shares.

On October 3, 2011, Lexon entered into four subscription agreements: (1) Senderbell Holdings Limited subscribed to 900,000 common unregistered shares for $77,143; (2) Treasure Chest Holdings Limited subscribed to 900,000 common unregistered shares for $77,143; (3) Blueberry Enterprises Limited subscribed to 900,000 common unregistered shares for $77,143; and (4) Hockworth Holdings Limited subscribed to 800,000 common unregistered shares for $68,571.

On October 26, 2011, a shareholder resolution was executed to nominate and accept Byung Jin Kim, Eugene Lee and KyuSeok Lee as Directors (effective as of November 26, 2011) and to change the corporate name from Lexon to Social Planet Inc.

On November 23, 2011, the Company issued 6,000,000 shares of its common stock to Liveplex Co., Ltd. at a purchase price of approximately $0.417 per share for an aggregate of $2,500,000 representing approximately 60% of the total outstanding common stock.

On November 25, 2011, James Park, Young Won, Bong S. Park and Hyung Soon Lee resigned as the Directors and Officers of the Company.

In November 30, 2011, the Company acquired 335,574 shares of Asianet Co., Ltd. From Liveplex Co., Ltd., a parent company, for a consideration of $1,500,000.

On December 30, 2011, a majority of the Company’s directors appointed Byung Jin Kim as Chief Executive Officer and Jonathan Lee as Chief Financial Officer of the Company effective as of January 1, 2012.

On January 31, 2012, the Company filed a Certificate of Amendment to the Company’s Certificate of Incorporation under the laws of the state of Delaware, changing the name of the Company from Lexon to Social Planet Inc.

On February 6, 2012, a majority of the Company’s directors and a majority of the Company’s shareholders approved changing the name of the Company from Social Planet Inc. to Social Cube Inc.

On February 16, 2012, the Company filed a Certificate of Amendment to the Company’s Certificate of Incorporation under the laws of the state of Delaware, changing the name of the Company from Social Planet Inc. to Social Cube Inc.

The Financial Industry Regulatory Authority, Inc. (FINRA) approved the Company’s corporate name change to Social Cube Inc., effective as of March 28, 2012, and its ticker symbol change to “SOCC”, effective as of April 2, 2012.

On June 3, 2013, the board of directors of the Company decided to implement a “going dark” process to delist the Company’s common stock from the OTC and deregister from the reporting requirements of the Securities Exchange Act of 1934, as amended

7

(the “Exchange Act”).

On June 7, 2013, the Company announced the “going dark” process through a press release and filing of a current report on Form 8-K with the U.S. Securities and Exchange Commission (“SEC”).

On June 18, 2013, the Company filed a Form 25 with the SEC to delist its common stock from the OTC and to deregister the Company’s common stock from Section 12(b) of the Exchange Act.

On June 28, 2013 the Company filed a Form 15 with the SEC to suspend the Company’s reporting requirements under Section 15(d) of the Exchange Act.   

Despite the Company’s filing of a Form 25 and Form 15 with the SEC on June 18, 2013 and June 28, 2013, respectively, the Company has considered reversing its “going-dark” process and relisting its common stock on the OTC, and has thereby continued compliance to its reporting requirements pursuant to Section 15(d) of the Exchange Act.   

Business Overview

Current Business Model

After Liveplex Co., Ltd. obtained a 60% controlling interest of the Company, Social Cube has refocused itself as a holding company of social gaming and social networking companies.  Social Cube’s strategy is to grow both organically and by acquisition, and to leverage its existing network of social gaming and networking assets together with other social networking companies and their related technologies.

Our majority shareholder is Liveplex Co., Ltd., an on-line game developer and publisher in Korea, which is publicly listed on the Korea Securities Dealers Automated Quotations (KOSDAQ:050120), a trading board of the Korea Exchange (KRX).   Liveplex Co., Ltd. is a leading developer and service provider of mobile and massively multiplayer online role-playing games.

We conduct our business through two business segments as follows:

Social Cube Networks Co., Ltd.

We have a 63% ownership interest in Social Cube Networks Co., Ltd. (formerly AsiaNet Co., Ltd.), a privately held company incorporated in the Republic of Korea, which publishes the following game titles, primarily in the Philippines:  Dragona, Genghis Khan, Weapons of War, Cross Fire, Special Force, Twelve Sky 2 and iDate.  

Social Cube Media.com, Inc.

We have a 100% ownership interest in Social Cube Media.com, Inc. (formerly Gameclub.com Inc.), a privately held company incorporated in the state of California, which publishes online games in the United States.

While our chief decision makers monitor the revenue streams of our various products and services, operations are managed and financial performance is evaluated on a company-wide basis. Accordingly, we consider our operations to be aggregated in one reportable operating segment.

Summary of Results

Revenues. Total revenues during the year ended December 31, 2013 were $3,502,219 compared to $4,555,330 for the year ended December 31, 2012   

Operating Expenses. Total operating expenses during the year ended December 31, 2013 were $1,917,280, in selling, general and administrative expenses compared to $1,207,159 for the year ended December 31, 2012.  

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Other Income (Expense). Other expenses for the year ended December 31, 2013 was $101,506 which consisted of interest expense of $20,098, foreign currency translation loss of $23,502, loss on disposal of fixed assets of $22,130, loss on extinguish of receivable of $162,094, loss on impairment of intangible of $250,715, gain on debt forgiveness of $363,869, interest income of $8 and other income of $13,156, compared to $126,588 for the year ended in 2012 which consisted of interest expense of $22,395, foreign currency translation loss of $52,965, loss on settlement of $20,000, loss on fixed assets impairment of $23,642, interest income of $206 and other expenses of $7,792.

 

Liquidity and Capital Resources

At December 31, 2013, we had current assets of $316,992 and current liabilities of $521,294, for negative working capital of $204,302. Current assets consisted solely of cash and cash equivalents, accounts receivables, prepaid expenses and other current assets. We also had net property and equipment of $319,647, security deposits of $21,034 and intangibles, net of amortization of $215,042.

Current liabilities at December 31, 2013, consisted of accounts payable of $138,488, current portion of loan payable of $314,714, accrued expense of $49,500 and other payables of $18,592, for total current liabilities of $521,294.  

For the year ended December 31, 2013, net cash flows used in operating activities totaled $622,533, compared to net cash flows used in operating activities of $276,086 in the prior year.

For the year ended December 31, 2013, there was $399,681 cash used in investing activities compared to the net cash used in investing activities of $205,131 for the prior year.

Net cash provided by financing activities for the year ended December 31, 2013 was $850,574, compared to net cash used in financing activities of $276,048 for the prior year.

Off-balance Sheet Arrangement

We currently have no off-balance sheet arrangements.

Item 7a.Quantitative and Qualitative Disclosures about Market Risk.

Not Applicable.

Item 8.Financial Statements and Supplemental Data.

SOCIAL CUBE INC.

10-K

TABLE OF CONTENTS

FINANCIAL STATEMENTS

	Page
Report of independent registered public accounting firm	10
Consolidated Balance Sheets as of December 31, 2013 and 2012	11
Consolidated Statements of Comprehensive Loss for the years ended December 31, 2013 and 2012	13
Consolidated Statements of Stockholders Equity for the years ended December 31, 2013 and 2012	14
Consolidated Statements of Cash flows for the years ended December 31, 2013 and 2012	15
Notes to the Financial Statements	17

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of Social Cube Inc.

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

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  The Company is not required to have, nor were we engaged to perform, and 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 includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such financial statements present fairly, in all material respects, the financial position of Social Cube Inc. and subsidiaries as of December 31, 2013 and 2012, and the results of their operations and cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

 

/s/ Choi, Kim & Park LLP

 

Los Angeles, California

Certified Public Accountants

 

April 14, 2014

10

SOCIAL CUBE INC.

Consolidated Balance Sheets

December 31, 2013 and 2012

The accompanying notes are an integral part of the financial statements

11

SOCIAL CUBE INC.

Consolidated Balance Sheets

December 31, 2013 and 2012

12

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

SOCIAL CUBE INC.

Consolidated Statements of Comprehensive Loss

For the Years Ended December 31, 2013 and 2012

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

SOCIAL CUBE INC.

13

Consolidated Statement of Stockholders' Equity

For the Years Ended December 31, 2013 and 2012

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

14

SOCIAL CUBE INC.

Consolidated Statements of Cash Flows

For the Years Ended December 31, 2013 and 2012

15

SOCIAL CUBE INC.

Consolidated Statements of Cash Flows

For the Years Ended December 31, 2013 and 2012

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

16

SOCIAL CUBE INC.

Notes to Consolidated Financial Statements

December 31, 2013 and 2012

Note 1 - Nature of Business

Business Overview

Current Business

After Liveplex Co., Ltd. obtained a 60% controlling interest of the Company, Social Cube has refocused itself as a holding company of social gaming, mobile gaming and social networking companies. Social Cube’s strategy is to grow both organically and by acquisition, and to leverage its existing network of social gaming and networking assets together with other social networking companies and their related technologies.

Our majority shareholder is Liveplex Co., Ltd., an on-line game developer and publisher in Korea, which is publicly listed on the Korea Securities Dealers Automated Quotations (KOSDAQ:050120), a trading board of the Korea Exchange (KRX). Liveplex Co., Ltd. is a leading developer and service provider of mobile and massively multiplayer online role-playing games.

We conduct our business through two operating segments as follows:

Social Cube Networks Co., Ltd.

We have a 63% ownership interest in Social Cube Networks Co., Ltd. (formerly AsiaNet Co., Ltd.), a privately held company incorporated in the Republic of Korea, which publishes the following game titles, primarily in the Philippines: Dragona, Genghis Khan, Weapons of War, Cross Fire, Special Force, Twelve Sky 2 and iDate.

Social Cube Media.com, Inc.

We have a 100% ownership interest in Social Cube Media.com, Inc. (formerly Gameclub.com, Inc.), a privately held company incorporated in the state of California, which publishes online games in the United States.

While our chief decision makers monitor the revenue streams of our various products and services, operations are managed and financial performance is evaluated on a company-wide basis. Accordingly, we consider our operations to be aggregated in one reportable operating segment.

Corporate History

Lexon Technologies, Inc. ("the Company", "Lexon" or “Social Cube”) was incorporated in April 1989 under the laws of state of Delaware, and owned 90.16% of Lexon Semiconductor Corporation ("Lexon Semi" or formerly known as Techone Co., Ltd ("Techone")) which had developed and manufactured Low Temperature Cofired Ceramic (LTCC) components, including LTCC wafer probe cards, LTCC circuit boards, LTCC Light Emitting Diode (LED) displays and related products for the semiconductor testing and measurement, custom Printed Circuit Board (PCB), and cellular phone industries.

Initially registered as California Cola Distributing Company, Inc., the Company changed its name four times; first to Rexford, Inc. in October 1992, second to Lexon Technologies, Inc. in July 1999, third to Social Planet Inc. in January 2012 and to the current name Social Cube Inc. in February 2012. From July 1999 through October 2009, the Company performed three reverse acquisitions and recapitalizations, which resulted in the change of the control of the Company each time.

On January 1, 2011, all assets and all of the liabilities of the Paragon Toner Division of Lexon were exchanged for existing Lexon shares, specifically 133,300,000 shares held by James Park and 66,700,000 shares held by Young Won. The Internet properties namely 7inkjet.com, nanoninket.com and Yourcartidges.com remained with Lexon, and became the main operation of the Company.

The Company’s Board of Directors and a majority of shareholders on June 6, 2011 approved a reverse share split of the Company’s common stock at a ratio of 641:1 from 315,789,721 shares to 492,535 issued and outstanding shares.

17

SOCIAL CUBE INC.

Notes to Consolidated Financial Statements

December 31, 2013 and 2012

On October 3, 2011, Lexon entered into four subscription agreements: (1) Senderbell Holdings Limited subscribed to 900,000 common unregistered shares for $77,143; (2) Treasure Chest Holdings Limited subscribed to 900,000 common unregistered shares for $77,143; (3) Blueberry Enterprises Limited subscribed to 900,000 common unregistered shares for $77,143; and (4) Hockworth Holdings Limited subscribed to 800,000 common unregistered shares for $68,571.

On October 26, 2011, a shareholder resolution was executed to nominate and accept Byung Jin Kim, Eugene Lee and KyuSeok Lee as Directors (effective as of November 26, 2011) and to change the corporate name from Lexon to Social Planet Inc.

On November 23, 2011, the Company issued 6,000,000 shares of its common stock to Liveplex Co., Ltd. at a purchase price of approximately $0.417 per share for an aggregate of $2,500,000 representing approximately 60% of the total outstanding common stock.

On November 25, 2011, James Park, Young Won, Bong S. Park and Hyung Soon Lee resigned as the Directors and Officers of the Company.

Pursuant to a share subscription agreement dated November 30, 2011, the Company subscribed to 335,574 shares of Social Cube Networks Co., Ltd. (formerly Asianet Co., Ltd.), a company incorporated in the Republic of Korea, for a consideration of $1,500,000. As a result of this subscription, the Company owns 63% of Social Cube Networks Co., Ltd.

On December 30, 2011, a majority of the Company’s directors appointed Byung Jin Kim as Chief Executive Officer and Jonathan Lee as Chief Financial Officer of the Company effective as of January 1, 2012.

On January 31, 2012, the Company filed a Certificate of Amendment to the Company’s Certificate of Incorporation under the laws of the state of Delaware, changing the name of the Company from Lexon to Social Planet Inc.

On February 6, 2012, a majority of the Company’s directors and a majority of the Company’s shareholders approved changing the name of the Company from Social Planet Inc. to Social Cube Inc.

On February 16, 2012, the Company filed a Certificate of Amendment to the Company’s Certificate of Incorporation under the laws of the state of Delaware, changing the name of the Company from Social Planet Inc. to Social Cube Inc.

On March 22, 2012, a majority of all outstanding shares voted in favor of reducing the authorized shares of common stock of the Company from 2,000,000,000 shares to 30,000,000 shares.

The Financial Industry Regulatory Authority, Inc. (FINRA) approved the Company’s corporate name change to Social Cube Inc., effective as of March 28, 2012, and its ticker symbol change to “SOCC”, effective as of April 2, 2012.

On June 3, 2013, the board of directors of the Company decided to delist the Company’s common stock from the OTC and deregister from the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

On June 7, 2013, the Company announced the delisting through a press release and filing of a current report on Form 8-K with the U.S. Securities and Exchange Commission (“SEC”).

On June 18, 2013, the Company filed a Form 25 with the SEC to delist its common stock from the OTC and to deregister the Company’s common stock from Section 12(b) of the Exchange Act.

On June 28, 2013 the Company filed a Form 15 with the SEC to suspend the Company’s reporting requirements under Section 15(d) of the Exchange Act.   

18

SOCIAL CUBE INC.

Notes to Consolidated Financial Statements

December 31, 2013 and 2012

Note 2 - Summary of Significant Accounting Policies

This summary of significant accounting policies of the Company is presented to assist in understanding the Company’s financial statements. The financial statements and notes are representations of the Company’s management, who is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the financial statements.

Principles of Consolidation

The consolidated financial statements include the accounts of Social Cube, Inc., Social Cube Networks Co., Ltd., a 63% owned subsidiary in Republic of Korea, and Social Cube Media.com, Inc., a wholly owned subsidiary in the State of California (collectively, the “Company”).  All significant inter-company balances and transactions have been eliminated in consolidation.  

Non-Controlling Interest

The result of operations attributable to the non-controlling interest is presented within equity and is shown separately from the Company’s equity.

Use of Estimates

The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Estimates are primarily used for depreciation of property and equipment, amortization of intangible assets, allowances for doubtful accounts and inventory valuation. Actual results could differ from those estimates.

Revenue Recognition

We derive, and expect to continue to generate, most of our revenues from online game subscription revenue generated in the countries where our games are offered by us. We recognize revenue in accordance with Accounting Standard Codification (ASC) 605, Revenue Recognition and other related pronouncements. Online game revenue is deferred until prepaid subscription cards are consumed by users.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with original maturities of three months or less to be categorized as cash and cash equivalents.

Allowance for Doubtful Accounts

The allowance for doubtful accounts is computed based upon the management’s estimate of uncollectible accounts and historical experience. The Company performs ongoing credit evaluations of its customers to estimate potential credit losses. Amounts are written off against the allowance in the period the Company determines that the receivable is uncollectible.

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SOCIAL CUBE INC.

Notes to Consolidated Financial Statements

December 31, 2013 and 2012

Property and Equipment

Property and equipment are stated at cost. The straight-line method is used to calculate depreciation over their estimated useful lives ranging as follows:

Automobile		3 to 5 years
Furniture & fixture		4 to 7 years
Leasehold improvement		5 years
Machinery and equipment		4 to 5 years

Leasehold improvements are depreciated to expense over the shorter of the life of the improvement or the remaining lease term. Capital expenditures that enhance the value or materially extend the useful life of the related assets are reflected as additions to property and equipment. Expenditures for repairs and maintenance are charged to expense as incurred. Upon a sale or disposition of assets, a gain or a loss is included in the statement of operations.

Impairment of Long-lived Assets

The Company periodically reviews the recoverability of its long-lived assets using the methodology prescribed in accounting guidance now codified as FASB ASC Topic 360, “Property, Plant and Equipment.” The Company also reviews these assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of these assets is determined by comparing the forecasted undiscounted future net cash flows from the operations to which the assets relate, based on management’s best estimates using appropriate assumptions and projections at the time, to the carrying amount of the assets. If the carrying value is determined not to be recoverable from future operating cash flows, the asset is deemed impaired and an impairment loss is recognized equal to the amount by which the carrying amount exceeds the estimated fair value of the asset. In management’s opinion, there was not impairment loss of December 31, 2013 and December 31, 2012.

Accrued Expenses

The Company’s accrued expenses consist of amounts payable for professional fee, corporate income tax and interest.

Income Taxes

The Company uses the asset and liability method of accounting for income taxes. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and net operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in income tax rates is recognized in the results of operations in the period that includes the enactment date. The realizability of deferred tax assets is evaluated based on a “more likely than not” standard, and to the extent this threshold is not met, a valuation allowance is recorded. See Note 9 Income Taxes for more information about the Company’s income taxes.

Recent Accounting Pronouncements

Reclassification of accumulated other comprehensive loss

In February 2013, the FASB issued an accounting standards update requiring new disclosures about reclassifications from accumulated other comprehensive loss to net income. These disclosures may be presented on the face of the statements or in the notes to the consolidated financial statements. This update is effective for fiscal years beginning after December 15, 2012. We adopted this guidance and provided the required disclosures in Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.

20

SOCIAL CUBE INC.

Notes to Consolidated Financial Statements

December 31, 2013 and 2012

Accounting for cumulative translation adjustments

In February 2013, the FASB issued an update to the authoritative guidance related to the release of cumulative translation adjustments into net income when a parent either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a foreign entity. This update will be effective for fiscal years beginning after December 15, 2013. Upon adoption of this guidance on January 1, 2014, there was no material impact on our consolidated financial statements.

Note 3 – Accounts Receivable

As of December 31, the Company has account receivable as follows:

	2012		2012
Receivable from game sales	$       1,417,810		$   1,143,802
Other receivable	-		123,311
	1,417,810		1,267,113
Less: Allowance for bad debt expense	(1,276,037)		-
Accounts receivable, net	$         141,773		$    1,267,113

Note 4 – Prepaid expense

The Company’s prepaid expenses consist of amounts prepaid for license, equipment rental, webpage, and design of Company’s logo.

Note 5 - Property and Equipment

Property and equipment consist of the following as of December 31:

	2013		2012
Automobile	$             147,765		$             145,121
Furniture and fixture	3,195		14,270
Leasehold improvement	1,100		1,100
Machinery and equipment	1,295,078		1,319,879
	1,447,138		1,480,370
Less: Accumulated depreciation	(1,127,491)		(816,192)
Property and equipment, net	$            319,647		$            664,178

Depreciation expense amounted to $311,290 and $626,430 for the years ended December 31, 2013 and 2012, respectively.

21

SOCIAL CUBE INC.

Notes to Consolidated Financial Statements

December 31, 2013 and 2012

Note 6 - Intangibles

Intangibles consist of the following as of December 31:

	2013		2012
Software	$        23,247		$        46,088
License	400,000		1,027,925
Flash Game	1,597		1,597
	424,844		1,075,610
Less: Accumulated amortization	(209,802)		(527,528)
Intangibles, net	$      215,042		$      548,082

The Company amortizes its software, license, and flash game over the estimated useful life of four years. Amortizable intangible assets are tested for impairment when impairment indicators are present, and, if impaired, written down to fair value based on either discounted cash flows or appraised values. As a result of the impairment testing, the Company determined that there was not impairment as of December 31, 2013 and December 31, 2012.

Note 7 - Transactions with Related Parties

Advances from the stockholder are unsecured, non-interest bearing and due on demand. The Company has $0 and $787,618 due to related parties as of December 31, 2013 and 2012, respectively.

Note 8 - Loan Payable

As of December 31, the Company has loan payable as follows:

		2013		2012
Auto loan payable to a bank, due in monthly installments of $1,346, including interest at 4.39% as of December 31, 2012. The final payment for the loan is scheduled on June 27, 2016.		$       39,371		$       53,454
A loan payable to Playon Interactive, Inc., due on September 12, 2014, including interest at 11.0%.		50,000		50,000
Less: Current portion		(64,714)		(64,083)
Loan payable, net of current		$       24,657		$       39,371

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SOCIAL CUBE INC.

Notes to Consolidated Financial Statements

December 31, 2013 and 2012

Note 9 - Commitments and Contingencies

Legal Proceedings

To the best knowledge of our knowledge, there are no pending legal proceedings against the Company.

Note 10 - Income Taxes

 

Significant components of deferred tax assets are as follows:

 

		Years Ended December 31,
		2013			2012
Loss carry forwards		$	5,299,598		$	2,761,611
Other		512,690			229,721
Total deferred tax asset		5,812,288			2,991,332
Valuation allowance		(4,005,802		)	(2,991,332)
Total deferred tax asset, net		$	-		$	-

 

 

As of December 31, 2013, the Company had approximately $6,700,000 of net operating loss (“NOL”) carryforwards for U.S. federal income tax purposes expiring in 2020 through 2032. In addition, the Company has California state NOL carryforwards of approximately $4,600,000 expiring in 2022 through 2032.  

The ability to realize the tax benefits associated with deferred tax assets, which includes benefits related to NOL’s, is principally

dependent upon the Company’s ability to generate future taxable income from operations.  The Company has provided a full valuation allowance for its net deferred tax assets due to the Company’s net operating losses.  The valuation allowance has increased by $1,014,470 during 2013.

Section 382 of the Internal Revenue Code (“IRC”) imposes limitations on the use of NOL’s and credits following changes in ownership as defined in the IRC. The limitation could reduce the amount of benefits that would be available to offset future taxable income each year, starting with the year of an ownership change.

 Note 11 — Subsequent Events

Management has evaluated subsequent events through the date of issuance of the financial data included herein. There have been no subsequent events that occurred during such period that would require disclosure in this Form 10-K or would be required to be recognized in the Consolidated Financial Statements as of December 31, 2013.

Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None.

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SOCIAL CUBE INC.

Notes to Consolidated Financial Statements

December 31, 2013 and 2012

Item 9A.Controls and Procedures.

(a)

Evaluation of Disclosure Controls and Procedures

 

We do not maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports pursuant to the Securities Exchange Act, of 1934, as amended, or the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the rules and forms, and that such information is accumulated and communicated to us, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.

As required by Rules 13a-15(b) of the Exchange Act, an evaluation as of December 31, 2013 was conducted under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, of the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based upon that evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were not effective as of December 31, 2013 for the reasons discussed below.  

 

(b)

Report of Management on Internal Control over Financial Reporting

 

We are responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) and 15d-15(f) of the Exchange Act. Under the supervision and with the participation of our management including our chief executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, or COSO

Based on our evaluation under the Internal Control-Integrated Framework, our chief executive officer and chief financial officer concluded that our internal control over financial reporting were not effective as of December 31, 2013 for the following reasons:

1. We do not yet have written documentation of our internal control policies and procedures. Written documentation of key internal controls over financial reporting is a requirement of Section 404 of the Sarbanes-Oxley Act and will be applicable to us for the year ending December 31, 2013. The Certifying Officers evaluated the impact of our failure to have written documentation of our internal controls and procedures on our assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted represented a material weakness.

2. We do not have a sufficient segregation of duties within accounting functions, which is a basic internal control. Due to our size and nature, segregation of all conflicting duties may not always be possible and may not be economically feasible. However, to the extent possible, the initiation of transactions, the custody of assets and the recording of transactions should be performed by separate individuals. The Certifying Officers evaluated the impact of our failure to have segregation of duties on our assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted represented a material weakness.

To remediate the material weaknesses in our disclosure controls and procedures identified above, in addition to working with our independent auditors, we have continued to refine our internal procedures to begin to implement segregation of duties and to prepare a written documentation of our internal control policies and procedures.

This Report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our independent registered public accounting firm pursuant to temporary rules of the SEC that permit the Company to provide only management’s report in this Annual Report.

(c)

Changes in Internal Control over Financial Reporting

 

24

There have been no other changes in our internal control over financial reporting that occurred during the period covered by this Annual Report on Form 10-K for the year ended 2013, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B.Other Information.

None.

PART III

 

Item 10.

    Directors, Executive Officers and Corporate Governance

Directors and Executive Officers

The following table sets forth certain information relating to our directors and executive officers as of April 14, 2013. The business address of all of our directors and executive officers is our registered office at 515 S. Flower Street, 36^th Floor, Los Angeles, CA 90071.

Name		Age		Position
Byung Jin Kim		37		Chief Executive Officer and Chairman of the Board of Directors
Eugene Lee		37		Director
Jonathan Lee Kyu Seok Lee		41 43		Chief Financial Officer Director

Byung Jin Kim has been a Director and Chairman of the Board of Directors of the Company since November 2011 and the Chief Executive Officer of the Company since January 2012.  Mr. Kim is also serving as the Chairman and Chief Executive Officer of Liveplex Co., Ltd. based in Seoul, Korea.  Mr. Kim received the national award for one of the top venture businesses of Korea in 2011.  He formerly served as the Chief Executive Officer of Livecode Co., Ltd. and MobileOne Communications Co., Ltd., and was also a technical advisor of Human and Technology Co., Ltd. after founding Gamenix Co., Ltd.  Mr. Kim received a B.S. in Business Administration from The Cyber University of Korea.

Eugene Lee has been a Director of the Company since November 2011.  Ms. Lee is also the current Chief Executive Officer of Socialcube Media.com Inc. and oversees all of its operations. Ms. Lee received a B.A. from Sangmyung University.

Jonathan Lee has been the Chief Financial Officer of the Company since January 2012.  Mr. Lee previously served as the Chief Financial Officer of Gravity Co., Ltd. (NasdaqGM: GRVY), a global developer and publisher of MMORPG and casual online games, where he improved the company’s financial performance and corporate governance from 2007 to 2009.   Mr. Lee was a founding member and a Vice President at Littauer Technologies, Inc. from 1999 to 2001, a KOSDAQ listed holding company with majority-stake investments in over 40 Internet and IT related portfolio companies in Asia.  Mr. Lee was also associated with the M&A and direct investment groups at Dresdner Kleinwort Wasserstein and Meritz Securities Co., Ltd.  Mr. Lee received an M.B.A from the University of Chicago, Booth School of Business, J.D. from the University of Pennsylvania and B.S. from the Massachusetts Institute of Technology.   

Kyu Seok Lee has been a Director of the Company since November 2011.  Mr. Lee is the former President of Bichuri Inc. and serves as a Director of Unwave & Co.

Compliance with Section 16(a) of the Exchange Act

Section 16(a) of the Securities and Exchange Act of 1934, as amended, requires our directors and certain officers, as well as persons who own more than 10% of a registered class of our equity securities, (“Reporting Persons”) to file reports of ownership and changes in ownership on Forms 3, 4 and 5 with the Securities and Exchange Commission. To the best of our knowledge, we believe that all Reporting Persons have complied on a timely basis with all filing requirements applicable to them.

Director Qualifications

25

We believe that our Board of Directors should encompass a diverse range of talent, skill and expertise sufficient to provide sound and prudent guidance with respect to our operations and interests. Each director also is expected to: exhibit high standards of integrity, commitment and independence of thought and judgment; use his or her skills and experiences to provide independent oversight to our business; participate in a constructive and collegial manner; be willing to devote sufficient time to carrying out their duties and responsibilities effectively; devote the time and effort necessary to learn our business; and represent the long-term interests of our Shareholders. Furthermore, we believe our Board of Directors should be comprised of persons with skills in areas such as: finance, online social gaming and social networking, leadership of business organizations and legal matters.

In addition to the targeted skill areas as noted above, we endeavor to select members of our Board of Directors which have a strong record of achievement in key knowledge areas that are critical for directors to add value to our Board of Directors, including:

·

Strategy — knowledge of our business model, the formulation of corporate strategies, knowledge of key competitors and markets;

·

Relationships — understanding how to interact with investors, accountants, attorneys, management companies, and markets in which we operate; and

·

Functional — understanding of finance matters, financial statements and auditing procedures, technical expertise, legal issues and marketing.

Corporate Governance

Director Attendance at Meetings of the Board of Directors

Each of our incumbent directors attended at least 75.0% of the aggregate total number of meetings of our Board of Directors held during the period for which he served as a director.

Director Attendance at Annual Meetings of the Shareholders

Although we have no policy with regard to attendance by the members of our Board of Directors at our annual meetings, we invite and encourage the members of our Board of Directors to attend our annual meetings to foster communication between Shareholders and our Board of Directors.

Stockholder Communication with the Board of Directors

Any stockholder who desires to contact members of our Board of Directors, or a specified committee of our Board of Directors, may do so by writing to: Social Cube Inc., Board of Directors, 515 S. Flower Street, 36^th Floor, Los Angeles, CA 90071, Attention: Chief Executive Officer. Communications received will be distributed by our Chief Executive Officer to such member or members of our Board of Directors as deemed appropriate by our Chief Executive Officer, depending on the facts and circumstances outlined in the communication received.

Board Leadership Structure; Lead Director

Byung Jin Kim serves as both our Chairman of the Board of Directors and Chief Executive Officer. Our Board of Directors has determined that the most effective leadership structure for our company at the present time is for our Chief Executive Officer to also serve as our Chairman of the Board of Directors. Our Board believes that because our Chief Executive Officer is ultimately responsible for our day-to-day operations and for executing our business strategy, and because our performance is an integral part of the deliberations of our Board of Directors, our Chief Executive Officer is the director best qualified to act as Chairman of the Board of Directors. Our Board of Directors retains the authority to modify this structure to best address our unique circumstances, and so advance the best interests of all shareholders, as and when appropriate. In addition, although we do not have a lead independent director, our Board of Directors believes that the current structure is appropriate, due to the current size of our operations.

Our Board of Directors also believes, for the reasons set forth below, that its existing corporate governance practices achieve independent oversight and management accountability, which is the goal that many companies seek to achieve by separating the roles of Chairman of the Board of Directors and Chief Executive Officer. Our governance practices provide for strong independent leadership, independent discussion among directors and for independent evaluation of, and communication with, members of senior management.

26

Committees of our Board of Directors

We have no standing committees of our Board of Directors at the current time, which is again due to the size of our operations. From time to time, our Board of Directors may establish committees it deems appropriate to address specific areas in more depth than may be possible at a full Board of Directors meeting. As our company grows, we plan to establish an audit committee, compensation committee and nominating and corporate governance committee.  The functions that these committees will perform are currently being performed by our entire Board.

Director Nomination Procedures and Diversity

As outlined above, in selecting a qualified nominee, our Board of Directors considers such factors as it deems appropriate, which may include: the current composition of our Board of Directors; the range of talents of a nominee that would best complement those already represented on our Board of Directors; the extent to which a nominee would diversify our Board of Directors; a nominee’s standards of integrity, commitment and independence of thought and judgment; a nominee’s ability to represent the long-term interests of our shareholders as a whole; a nominee’s relevant expertise and experience upon which to be able to offer advice and guidance to management; a nominee who is accomplished in his or her respective field, with superior credentials and recognition; and the need for specialized expertise. While we do not have a formal diversity policy, we believe that the backgrounds and qualifications of our directors, considered as a group, should provide a significant composite mix of experience, knowledge and abilities that will allow our Board of Directors to fulfill its responsibilities. Applying these criteria, our Board of Directors considers candidates for membership on our Board of Directors suggested by its members, as well as by our Shareholders. Members of our Board of Directors annually review our Board of Directors’ composition by evaluating whether our Board of Directors has the right mix of skills, experience and backgrounds. Our Board of Directors may also consider an assessment of its diversity, in its broadest sense, reflecting, but not limited to, age, geography, gender and ethnicity.

Our Board of Directors identifies nominees by first evaluating the current members of our Board of Directors willing to continue in service. Current members of our Board of Directors with skills and experience relevant to our business and who are willing to continue in service are considered for re-nomination. If any member of our Board of Directors does not wish to continue in service or if our Board of Directors decides not to nominate a member for re-election, our Board of Directors will review the desired skills and experience of a new nominee in light of the criteria set forth above.

Our Board of Directors also considers nominees for our Board of Directors recommended by Shareholders. Notice of proposed stockholder nominations for our Board of Directors must be delivered in accordance with the requirements set forth in our bylaws and SEC Rule 14a-8 promulgated under the Securities Exchange Act of 1934, as amended, or the Exchange Act. Nominations must include the full name of the proposed nominee, a brief description of the proposed nominee’s business experience for at least the previous five years and a representation that the nominating stockholder is a beneficial or record owner of our common stock. Any such submission must be accompanied by the written consent of the proposed nominee to be named as a nominee and to serve as a director if elected. Nominations should be delivered to: Social Cube Inc., Board of Directors, 515 S. Flower Street, 36^th Floor, Los Angeles, CA 90071, Attention: Chief Executive Officer.

Our Board of Directors will recommend the slate of directors to be nominated for election at the annual meeting of shareholders. We have not and do not currently employ or pay a fee to any third party to identify or evaluate, or assist in identifying or evaluating, potential director nominees.

Board of Directors Role in Risk Oversight

Our Board of Directors oversees our shareholders’ interest in the long-term success of our business strategy and our overall financial strength.

Our Board of Directors is actively involved in overseeing risks associated with our business strategies and decisions. It does so, in part, through its approval of all acquisitions and business-related investments and all assumptions of debt, as well as its oversight of our executive officers pursuant to annual reviews. Our Board of Directors is also responsible for overseeing risks related to corporate governance and the selection of nominees to our Board of Directors.

In addition, the Board reviews the potential risks related to our financial reporting. The Board meets with our Chief Financial Officer and with representatives of our independent registered public accounting firm on a quarterly basis to discuss and assess the risks related to our internal controls.

Code of Business Conduct and Ethics

We have not adopted a Code of Ethics.

27

Compensation of Directors

Our directors do not receive any cash compensation, but are entitled to reimbursement of their reasonable expenses incurred in attending directors’ meetings.

Item 11.

Executive Compensation.

 

The following table sets forth information concerning all cash and non-cash compensation awarded to, earned by or paid to the named persons for services rendered in all capacities during the noted periods. No executive officer received total annual salary and bonus compensation in excess of $93,000 during the fiscal year ended December 31, 2013.

Compensation Committee Interlocks and Insider Participation

 

During the last fiscal year we did not have a standing Compensation Committee. The Board was responsible for the functions that would otherwise be handled by the compensation committee.  

Indemnification of Directors and Executive Officers and Limitation of Liability

The General Corporation Law of Delaware, Section 102(b)(7) provides that directors, officers, employees or agents of Delaware corporations are entitled, under certain circumstances, to be indemnified against expenses (including attorneys’ fees) and other liabilities actually and reasonably incurred by them in connection with any suit brought against them in their capacity as a director, officer, employee or agent, if they acted in good faith and in a manner they reasonably believed to be in or not opposed to the best interests of the corporation, and with respect to any criminal action or proceeding, if they had no reasonable cause to believe their conduct was unlawful. This statute provides that directors, officers, employees and agents may also be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by them in connection with a derivative suit brought against them in their capacity as a director, if they acted in good faith and in a manner they reasonably believed to be in or not opposed to the best interests of the corporation, except that no indemnification may be made without court approval if such person was adjudged liable to the corporation

Compensation Discussion and Analysis

None.

Compensation Pursuant to Plans

None.

Pension Table

Not Applicable.

 

Other Compensation

None.

Executive Employment Agreements

None.

 

Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The following table sets forth as of March 12, 2014 the name and address and the number of shares of our Common Stock, par value $0.001 per share, held of record or beneficially by each person who held of record, or was known by us to own beneficially, more than 5% of the shares of our Common Stock issued and outstanding. Beneficial ownership is determined in accordance with the rules of the SEC and generally includes securities over which a person has voting or investment power and securities that a person has the right to acquire within 60 days.

28

________________

(1)

C/o Social Cube Inc., 515 S. Flower Street, 36^th Floor, Los Angeles, CA 90071

Securities Ownership of Officers and Directors

The following table sets forth certain information relating to the shareholdings of our former and existing Executives and Directors as of March 12, 2014.  

___________________

(1)

C/o Social Cube Inc., 515 S. Flower Street, 36^th Floor, Los Angeles, CA 90071

Item 13.Certain Relationships and Related Transactions, and Director Independence.

 

Director Independence

We have a three-member Board of Directors. Due to the size of our company and the difficulty in finding directors that are competent or have experience in our industry, none of our directors can be deemed an “independent director.”

While our stock is not listed on the New York Stock Exchange, none of our independent directors would qualify as independent under the rules of the New York Stock Exchange.

Transactions with Related Persons

For the years ended December 31, 2012 and 2013, the Company had the transactions which involved related persons. Please refer to Note 1.

Item 14.Principal Accounting Fees and Services.

Choi, Kim & Park LLP (“CKP”) was our independent auditor and examined our financial statements for the years ended December 31, 2012 and December 31, 2013.  

Audit Fees

CKP was billed aggregate fees of $45,000 for the year ended December 31, 2013 for professional services rendered for the reviews of the financial statements included in our annual report on Form 10-K and quarterly reports on Form 10-Q during this period.

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CKP was paid aggregate fees of $51,000 for the year ended December 31, 2013 for professional services rendered for the reviews of the financial statements included in our annual report on Form 10-K and quarterly reports on Form 10-Q during this period.

Audit-Related Fees

CKP was not paid additional fees for either the year ended December 31, 2013, or the year ended December 31, 2012 for assurance and related services reasonably related to the performance of the audit or review of our financial statements.

All Other Fees

CKP was not paid any other fees for professional services during the year ended December 31, 2013 or the fiscal year ended December 31, 2012. 

Auditor Independence

The Board of Directors has considered whether the provision of the above noted services is compatible with maintaining our independent registered public accounting firm’s independence and has concluded that the provision of such services has not adversely affected the independent registered public accounting firm’s independence.

The information required by this Item is incorporated by reference to our definitive proxy statement to be filed with respect to our 2013 annual meeting of stockholders.

Item 15.Exhibits, Financial Statement Schedules.

(a)(1) Financial Statements:

The consolidated financial statements and the related notes are included in Item 8 herein.

 

(a)(2) Financial Statement Schedule:

 

All schedules have been omitted as the required information is inapplicable or the information is presented in the consolidated financial statements or related notes.

 

(a)(3) Exhibits:

 

The exhibits listed on the Exhibit Index (following the signatures section of this report) are included, or incorporated by reference, in this annual report.

 

(b) Exhibits:

 

See Item 15(a)(3) above.

 

(c) Financial Statement Schedule:

 

All schedules have been omitted as the required information is inapplicable or the information is presented in the consolidated financial statements or related notes.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Los Angeles, State of California on April 14, 2014.

SOCIAL CUBE INC.

 ______________________________

 REGISTRANT

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/s/ Byung Jin Kim

___________________

By: Byung Jin Kim

Chief Executive Officer

Date: April 14, 2014

/s/ Jonathan Lee

___________________

By: Jonathan Lee

Chief Financial Officer

Date: April 14, 2014

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

Signature                  

 Title                                   

/s/ Byung Jin Kim

Chief Executive Officer and Chairman

_______________________

(principal executive officer)

By: Byung Jin Kim

Date: April 14, 2014

/s/ Jonathan Lee

Chief Financial Officer

_______________________

(principal financial officer)

By: Jonathan Lee

Date: April 14, 2014

/s/ Eugene Lee

Director

_______________________

By: Eugene Lee

Date: April 14, 2014

/s/ KyuSeok Lee

Director

_______________________

By: KyuSeok Lee

Date: April 14, 2014

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EXHIBIT INDEX

 

Pursuant to Item 601(a)(2) of Regulation S-K, this Exhibit Index immediately precedes the exhibits.

 

The following exhibits are included, or incorporated by reference; in this Annual Report on Form 10-K for the year ended December 31, 2013 (and are numbered in accordance with Item 601 of Regulation S-K).

EXHIBIT

NUMBERDESCRIPTION

21.1* List of Subsidiaries

31.1* Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of  2002.

31.2* Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley  Act  of  2002.

32.1** Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant  to  Section  906  of  the  Sarbanes-Oxley  Act  of  2002.

32.1**Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant  to  Section  906  of  the  Sarbanes-Oxley  Act  of  2002.

101.INS**       XBRL Instance Document

101.SCH**      XBRL Taxonomy Extension Schema Document

101.CAL**      XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB**      XBRL Taxonomy Extension Label Linkbase Document

101.PRE**      XBRL Taxonomy Extension Presentation Linkbase Document

101.DEF**      XBRL Taxonomy Extension Definition Linkbase Document

_________________

* Filed herewith

** Furnished herewith

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