UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
| [X] | Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
| For the quarterly period endedDecember 31, 2013 | |
| [ ] | Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934 |
| For the transition period from __________ to__________ | |
| Commission File Number:000-54434 | |
Oxford City Football Club, Inc.
(Exact name of registrant as specified in its charter)
| Florida | 05-0554762 |
| (State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) |
| 10 Fairway Drive, Suite 302, Deerfield Beach, FL 33441 |
| (Address of principal executive offices) |
| 617.501.6766 |
| (Registrant’s telephone number) |
| (Former name, former address and former fiscal year, if changed since last report) |
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 [X] Yes [ ] No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). [X] Yes [ ] No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.
| [ ] Large accelerated filer | [ ] Accelerated filer |
| [ ] Non-accelerated filer | [X] Smaller reporting company |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). [ ] Yes [X] No
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 1,760,617 as of February 5, 2014.
| TABLE OF CONTENTS | ||
| Page | ||
| PART I – FINANCIAL INFORMATION | ||
| Item 1: | Financial Statements | 3 |
| Item 2: | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 4 |
| Item 3: | Quantitative and Qualitative Disclosures About Market Risk | 8 |
| Item 4: | Controls and Procedures | 8 |
| PART II – OTHER INFORMATION | ||
| Item 1: | Legal Proceedings | 9 |
| Item 1A: | Risk Factors | 9 |
| Item 2: | Unregistered Sales of Equity Securities and Use of Proceeds | 9 |
| Item 3: | Defaults Upon Senior Securities | 9 |
| Item 4: | Mine Safety Disclosures | 9 |
| Item 5: | Other Information | 9 |
| Item 6: | Exhibits | |
| 2 |
PART I - FINANCIAL INFORMATION
Our financial statements included in this Form 10-Q are as follows:
These financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the SEC instructions to Form 10-Q. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the interim period ended December 31, 2013 are not necessarily indicative of the results that can be expected for the full year.
| 3 |
OXFORD CITY FOOTBALL CLUB, INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
| December 31, 2013 | June 30, 2013 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash | $ | 386,469 | $ | 5,089 | ||||
| Accounts receivable | 24,842 | — | ||||||
| Inventory | 15,172 | — | ||||||
| Prepaid expenses | 12,237 | 5,293 | ||||||
| Total current assets | 438,720 | 10,382 | ||||||
| Property and equipment, net | 16,339 | 20,593 | ||||||
| Investment in Oxford City Football Club (Trading) Limited | — | 162,814 | ||||||
| Oxford City Basketball League membership, net | 25,312 | — | ||||||
| Oxford City Football Club trade name, net | 237,825 | — | ||||||
| Total assets | $ | 718,196 | $ | 193,789 | ||||
| LIABILITIES AND STOCKHOLDERS' DEFICIT | ||||||||
| Current liabilities | ||||||||
| Accounts payable and accrued liabilities | $ | 490,456 | $ | 41,738 | ||||
| Officer compensation payable | 2,631,537 | 1,241,194 | ||||||
| Deferred revenue | 5,000 | 10,000 | ||||||
| Loan payable | 32,545 | — | ||||||
| Due to related parties | 206,576 | 8,743 | ||||||
| Total current liabilities | 3,366,114 | 1,301,675 | ||||||
| Stockholders' deficit: | ||||||||
| Preferred stock: $0.0001 par value; authorized 40,000,000 shares;issued and outstanding: 0 and 0, respectively | ||||||||
| Series A Convertible Preferred Stock: $0.0001 par value; designated 10,000,000 shares; issued and outstanding: 2,500 and 2,500, respectively | — | — | ||||||
| Series B Convertible Preferred Stock: $0.0001 par value; designated5,000,000 shares; issued and outstanding: 80,000 and 0, respectively | 8 | — | ||||||
| Common stock: $0.0001 par value; authorized 500,000,000 shares; issued and outstanding: 1,612,617 and 223,455, respectively | 162 | 22 | ||||||
| Additional paid-in capital | 4,577,908 | 3,562,961 | ||||||
| Stock payable | 345,591 | 399,236 | ||||||
| Treasury Stock | (1,338 | ) | (1,338 | ) | ||||
| Accumulated other comprehensive loss | (67,480 | ) | — | |||||
| Deficit | (7,054,344 | ) | (5,068,767 | ) | ||||
| Total stockholders' deficit | (2,199,493 | ) | (1,107,886 | ) | ||||
| Non-controlling interest | (448,425 | ) | — | |||||
| Total deficit | (2,647,918 | ) | (1,107,886 | ) | ||||
| Total liabilities and stockholders' deficit | $ | 718,196 | $ | 193,789 | ||||
The accompanying note are an integral part of these consolidated financial statements.
| F-1 |
OXFORD CITY FOOTBALL CLUB, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| For the three months ended December 31, 2013 | For the three months ended December 31, 2012 | For the six months ended December 31, 2013 | For the six months ended December 31, 2012 | |||||||||||||
| Sales | $ | 142,749 | $ | 49,950 | $ | 248,505 | $ | 51,450 | ||||||||
| Cost of sales | 29,544 | — | 41,862 | — | ||||||||||||
| Gross profit | 113,205 | 49,950 | 206,643 | 51,450 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| General and administrative | 244,618 | 63,118 | 378,910 | 73,367 | ||||||||||||
| Amortization | 127,350 | — | 246,263 | — | ||||||||||||
| Depreciation | 2,132 | 1,168 | 4,264 | 1,547 | ||||||||||||
| Salaries and wages | 106,323 | — | 135,371 | — | ||||||||||||
| Software development | 918 | 905 | 1,805 | 1,000 | ||||||||||||
| Officer compensation | 741,000 | 87,447 | 1,482,000 | 212,447 | ||||||||||||
| Professional fees | 33,833 | 36,928 | 81,495 | 65,062 | ||||||||||||
| Professional stock-based fees | 4,000 | 600,000 | 4,000 | 600,000 | ||||||||||||
| (Gain) loss on extinguishment ofaccounts and due to related parties | — | (22,992 | ) | — | 1,106,636 | |||||||||||
| Total operating expenses | 1,260,174 | 766,574 | 2,334,108 | 2,060,059 | ||||||||||||
| Other income (loss): | ||||||||||||||||
| Gain on re-measurement of equity investment in Oxford City Football Club(Trading) Limited | — | — | 10,600 | — | ||||||||||||
| — | — | 10,600 | — | |||||||||||||
| Loss before income taxes | (1,146,969 | ) | (716,624 | ) | (2,116,865 | ) | (2,008,609 | ) | ||||||||
| Provision for income taxes | — | — | — | — | ||||||||||||
| Net loss | (1,146,969 | ) | (716,624 | ) | (2,116,865 | ) | (2,008,609 | ) | ||||||||
| Net loss attributable to non-controlling interest | (82,515 | ) | — | (131,289 | ) | — | ||||||||||
| Net loss attributable to OxfordCity Football Club, Inc. | (1,064,454 | ) | (716,624 | ) | (1,985,576 | ) | (2,008,609 | ) | ||||||||
| Other comprehensive income (loss): | ||||||||||||||||
| Foreign exchange translation adjustment | (41,550 | ) | — | (68,299 | ) | — | ||||||||||
| Comprehensive loss | $ | (1,106,004 | ) | $ | (716,624 | ) | $ | (2,053,875 | ) | $ | (2,008,609 | ) | ||||
| Basic loss per common share | $ | (1.18 | ) | $ | (1.93 | ) | $ | (3.05 | ) | $ | (5.23 | ) | ||||
| Basic weighted average common shares outstanding | 898,502 | 371,688 | 651,371 | 384,406 | ||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
| F-2 |
OXFORD CITY FOOTBALL CLUB, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| For the six months ended December 31, 2013 | For the six months ended December 31, 2012 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | (2,116,865 | ) | $ | (2,008,609 | ) | ||
| Adjustments to reconcile net loss to netcash provided by (used in) operating activities: | ||||||||
| Depreciation | 4,264 | 1,547 | ||||||
| Amortization | 246,264 | — | ||||||
| Professional stock-based fees | 4,000 | 600,000 | ||||||
| Gain on sale of equity investment | (10,600 | ) | — | |||||
| Loss on extinguishment accounts payable and related parties | — | 1,106,636 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Decrease in accounts receivable | 16,380 | — | ||||||
| Increase in inventory | (5,070 | ) | — | |||||
| Increase in prepaid expense | (6,944 | ) | (16,951 | ) | ||||
| Increase (decrease) in officer compensation payable | 1,390,343 | (30,158 | ) | |||||
| Decrease in accounts payable and accrued liabilities | (179,525 | ) | (43,148 | ) | ||||
| Decrease in deferred revenue | (5,000 | ) | — | |||||
| Net cash used in operating activities | (662,753 | ) | (390,683 | ) | ||||
| Cash flows from investing activities: | ||||||||
| Purchase of fixed assets | — | (17,676 | ) | |||||
| Cash received from acquisition of Oxford City Football | ||||||||
| Club (Trading) Limited | 135,127 | — | ||||||
| Net cash provided by (used in) investing activities | 135,127 | (17,676 | ) | |||||
| Cash flows from financing activities: | ||||||||
| Proceeds from issuance of stock | 923,700 | 411,000 | ||||||
| Advance by related party | 7,921 | — | ||||||
| Payments to related party | (8,743 | ) | — | |||||
| Payments to loan payable | (1,849 | ) | — | |||||
| Payments to non-controlling interest | (8,714 | ) | — | |||||
| Net cash provided by financing activities | 912,315 | 411,000 | ||||||
| Foreign exchange gain (loss) | (3,309 | ) | — | |||||
| Net change in cash | 381,380 | 2,641 | ||||||
| Cash, beginning of period | 5,089 | 63,321 | ||||||
| Cash, end of period | $ | 386,469 | $ | 65,962 | ||||
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||||||
| Cash paid for interest | $ | — | $ | — | ||||
| Cash paid for taxes | $ | — | $ | — | ||||
| Non-cash investing and financing activities: | ||||||||
| Intangible asset | $ | 509,401 | $ | — | ||||
| Stock issued for accounts payable | $ | — | $ | 1,042,620 | ||||
| Stock issued for due to related parties | $ | — | $ | 857,500 | ||||
The accompanying notes are an integral part of these consolidated financial statements.
| F-3 |
OXFORD CITY FOOTBALL CLUB, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1.DESCRIPTION OF BUSINESS AND HISTORY
Description of business – At July 1, 2013, the Company ceased to be a development stage company as its principal planned operations of operating the Oxford City Football Club, commenced.
Effective July 1, 2013, all the stockholders and directors of Oxford City Football Club (Trading) Limited entered into a Voting Agreement whereby the Company, a 49% shareholder, has the right to appoint four Board members, Guerriero, LLC, a company which our CEO and director is the sole member and 1% shareholder of the Company, has the right to appoint one Board member and Oxford City Youth Football Club Limited, a 50% shareholder, has the right to appoint five Board members. Guerriero, LLC has agreed to appoint a Board Member as directed by the Company. In the case of all and any ties in voting of the Board of Directors, the Directors have agreed to give the Managing Director of the Company the authority to be the deciding vote. As a result of the Voting Agreement, the Company controls greater than 50% of the votes on the Board of Directors of Oxford City Football Club (Trading) Limited. In accordance with ASC 810, the Company on July 1, 2013 includes the accounts of Oxford City Football Club (Trading) Limited in its consolidated financial statements.
All activities of the Company to December 31, 2012 relate to its organization, share issuances for services and cash and the development of software platforms for e-commerce trade. Commencing on October 1, 2012, the Company started to implement its WMX Executive Training Program Strategic Action Plan. Currently, the Company is offering an Executive Education Certificate Program in Financial Planning. In order to facilitate the Strategic Action Plan, WMX has incorporated three wholly owned subsidiaries; CIT Cambridge Institute of Technology Christian University, Inc., WMX Wealth Advisors, LLC and WMX Insurance Group, Inc. On April 29, 2013, the Company acquired 100% of Oxford City Football Club, LLC, a commonly controlled entity that is owned by the Company’s CEO and Director, Mr. Thomas Guerriero, in a Share Exchange Agreement. Oxford City Football Club, LLC has a 49% equity method investment in Oxford City Football Club (Trading) Limited which operates the Oxford City Football Club located in the City of Oxford, England.
On June 20, 2012, the Board of Directors approved a change in fiscal year from December 31 to June 30.
The Merger has been accounted for as a reverse acquisition transaction for accounting purposes as WMX Private Co. was deemed to be the acquirer, and thus, these consolidated financial statements are the historical financial information and operating results of WMX Private Co. The carrying amounts of the Company’s assets and liabilities prior to the Merger (Smart Kids Group, Inc.) are included in these consolidated financial statements.
On April 30, 2012, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with WMX Group, Inc., a Nevada corporation ("WMX Private Co."), and SKGI Acquisition Corp., Nevada corporation, and a wholly-owned subsidiary of the Company (“Acquisition Sub”), pursuant to which Acquisition Sub merged with and into WMX Private Co. (the “Merger”) with the filing of the Articles of Merger with the Nevada Secretary of State on May 1, 2012 and became a wholly-owned subsidiary of the Company. In accordance with the terms of the Merger Agreement, at the closing an aggregate of 26,346 shares of the Company’s common stock was issued to the holders of WMX Private Co.’s common stock in exchange for their shares of WMX Private Co. WMX Private Co. was incorporated on January 18, 2011 in the Province of New Brunswick, Canada as World Mercantile Exchange, Ltd. and subsequently changed its name to WMX, Group, Inc. and re-domiciled to the State of Nevada.
Oxford City Football Club, Inc. (formerly WMX Group Holdings, Inc.), (the "Company" or "Oxford") was incorporated on February 11, 2003 in the State of Florida as Smart Kids Group, Inc. On June 11, 2012, the Company changed its name from Smart Kids Group, Inc. to WMX Holdings Group, Inc. and on July 8, 2013, the Company changed its name from WMX Holdings Group, Inc. to Oxford City Football Club, Inc.
| F-4 |
OXFORD CITY FOOTBALL CLUB, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
2.BASIS OF PREPARATION
Pursuant to the rules and regulations of the Securities and Exchange Commission for Form 10-Q, the consolidated financial statements, footnote disclosures and other information normally included in consolidated financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. The consolidated financial statements contained in this report are unaudited but, in the opinion of management, reflect all adjustments, consisting of only normal recurring adjustments, necessary for a fair presentation of the consolidated financial statements. All significant inter-company accounts and transactions have been eliminated in consolidation. The results of operations for any interim period are not necessarily indicative of results for the full year. The consolidated balance sheet at June 30, 2013 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements.
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Management reviews these estimates and assumptions on an ongoing basis using currently available information. Actual results could differ from those estimates.
Consolidation– The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries. All inter-company balances and transactions have been eliminated. The Company and its subsidiaries will be collectively referred to herein as the “Company”.
Investment- Investments in unconsolidated affiliates over which we exercise significant influence, but do not control, including joint ventures, are accounted for using the equity method. Investments in unconsolidated affiliates over which we are not able to exercise significant influence are accounted for under the cost method.
We measure our investment in the Oxford City Football Club (Trading) Limited at fair value on a nonrecurring basis when it is deemed to be other-than-temporarily impaired. The fair value of our investment is determined based on valuation techniques using the best information available, and may include quoted market prices, market comparables, and discounted cash flow projections. An impairment charge is recorded when the cost of the investment exceeds its fair value and this condition is determined to be other-than-temporary.
Use of estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the Company to make estimates and judgments that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. These estimates and judgments are based on historical information, information that is currently available to the Company and on various other assumptions that the Company believes to be reasonable under the circumstances. Actual results could differ from those estimates.
Cash and cash equivalents – Cash and cash equivalents consist of cash and short-term investments with original maturities of less than 90 days. Cash equivalents are placed with high credit quality financial institutions and are primarily in money market funds. The carrying value of those investments approximates fair value.
Revenue Recognition – Revenue is only recognized when all of the following criteria are met: (1) persuasive evidence of an arrangement exists, (2) delivery has occurred or services have been rendered, (3) the price to the buyer is fixed or determinable, and (4) collectability is reasonably assured. Executive Training Program revenue is recognized as the services are performed.
We recognize revenue from the following sources:
i) Executive Training Program revenue is recognized as the services are performed.
ii) Hourly rental of facilities is recognized as the rental occurs.
iii) Admission to sporting events is recognized as the event occurs.
iv) Food and beverages revenue is recognized on sale.
v) Sponsorship revenue is recognized ratably over the period of the agreement.
| F-5 |
OXFORD CITY FOOTBALL CLUB, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
2.BASIS OF PREPARATION (CONTINUED)
Foreign Currency Translation- The Company determined the functional currency for Oxford City Football Club, Inc. and all its subsidiaries to be the U.S. dollar and, accordingly, our financial information is translated into U.S. dollars using exchange rates in effect at period-end. The income statement is translated at the average year-to-date exchange rate. Adjustments resulting from translation of foreign currency are included as a component of other comprehensive income within stockholders' deficit.
Impairment of Long-lived Assets- The carrying value of long-lived assets is evaluated for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable from the estimated undiscounted future cash flows expected to result from its use and eventual disposition. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net undiscounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment is measured as the amount by which the carrying amount of the assets exceeds the fair value as estimated by discounted cash flows. No impairment was recognized for the six months ended December 31, 2013.
Earnings (loss) per share – Basic earnings (loss) per common share is computed by dividing net income (loss) available to common shareholders by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per common share is computed by dividing income available to common shareholders by the weighted-average number of shares of common stock outstanding during the period increased to include the number of additional shares of common stock that would have been outstanding if potentially dilutive securities had been issued. There were no potentially dilutive securities outstanding during the periods presented.
Stock-based compensation – The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with FASB ASC 718-10 and the conclusions reached by the FASB ASC 505-50. Costs are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earliest of a performance commitment or completion of performance by the provider of goods or services as defined by FASB ASC 505-50.
Fair value of financial instruments- The Company's financial instruments consist of cash, accounts payable, accrued liabilities, advances, notes payable, and a loan payable. The carrying amount of these financial instruments approximates fair value due to either length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these financial statements.
Concentration of credit risk– Financial instruments that potentially expose the Company to significant concentrations of credit risk consist principally of cash. The Company places its cash with financial institutions with high-credit ratings.
Recent Accounting Pronouncements– The Company has evaluated recent pronouncements through Accounting Standards Updates “ASU” 2013-11 and believes that none of them will have a material impact on the Company’s financial position, results of operations or cash flows.
3.GOING CONCERN
The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred losses since inception and has a cumulative retained deficit of $7,054,344 as of December 31, 2013. The Company requires capital for its contemplated operational and marketing activities. The Company’s ability to raise additional capital through the future issuances of common stock is unknown. The obtainment of additional financing, the successful development of the Company’s contemplated plan of operations, and its transition, ultimately, to the attainment of profitable operations are necessary for the Company to continue operations. The ability to successfully resolve these factors raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements of the Company do not include any adjustments that may result from the outcome of these aforementioned uncertainties. In order to mitigate the risk related with this uncertainty, the Company plans to issue additional shares of common stock for cash and services during the next 12 months.
| F-6 |
OXFORD CITY FOOTBALL CLUB, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
4.BUSINESS COMBINATION
Effective July 1, 2013, all the stockholders and directors of Oxford City Football Club (Trading) Limited entered into a Voting Agreement whereby the Company, a 49% shareholder, has the right to appoint four Board members, Guerriero, LLC, a company which our CEO and director is the sole member and 1% shareholder of the Company, has the right to appoint one Board member and Oxford City Youth Football Club Limited, a 50% shareholder, has the right to appoint five Board members. Guerriero, LLC has agreed to appoint a Board Member as directed by the Company. In the case of all and any ties in voting of the Board of Directors, the Directors have agreed to give the Managing Director of the Company the authority to be the deciding vote. As a result of the Voting Agreement, the Company controls greater than 50% of the votes on the Board of Directors of Oxford City Football Club (Trading) Limited. In accordance with ASC 810,Consolidationthe Company on July 1, 2013 includes the accounts of Oxford City Football Club (Trading) Limited in its consolidated financial statements with a one month lag.
The Company accounts for its business acquisitions under the acquisition method of accounting as indicated in ASC 805,Business Combinations, which requires the acquiring entity in a business combination to recognize the fair value of all assets acquired, liabilities assumed and any non-controlling interest in the acquiree; and establishes the acquisition date as the fair value measurement point. Accordingly, the Company recognizes assets acquired and liabilities assumed in business combinations, including contingent assets and liabilities and non-controlling interest in the acquiree, based on fair value estimates as of the date of acquisition. In accordance with ASC 805, the Company recognizes and measures goodwill as of the acquisition date, as the excess of the fair value of the consideration paid over the fair value of the identified net assets acquired. All acquisition-related transaction costs have been expensed as incurred rather than capitalized as a part of the cost of the acquisition.
The following table summarizes the consideration paid for the acquired assets and the preliminary acquisition accounting for the fair values of the assets recognized and liabilities assumed in the consolidated balance sheet at the acquisition date. These balances are subject to change when final asset valuations are obtained and the potential for liabilities has been evaluated.
| TOTAL ASSETS ACQUIRED | ||||
| Current assets: | ||||
| Cash | $ | 23,385 | ||
| Accounts receivable | 37,404 | |||
| Inventory | 9,130 | |||
| Prepaid expenses | 1,248 | |||
| 71,167 | ||||
| Property and equipment, net | 9 | |||
| Oxford City Football Club trade name | 475,651 | |||
| 475,660 | ||||
| $ | 546,827 | |||
| TOTAL LIABILITIES ASSUMED | ||||
| Account payable and accrued liabilities | $ | 639,580 | ||
| Due to related parties | 162,711 | |||
| Due to Oxford City Football Club, Inc. | 61,672 | |||
| Non-controlling interest | (317,136 | ) | ||
| $ | 546,827 | |||
| PURCHASE PRICE | $ | — |
Intangible assets is the fair value of trade names with a useful life of 12 months.
| F-7 |
OXFORD CITY FOOTBALL CLUB, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
4.BUSINESS COMBINATION (continued)
Supplemental Cash Flow Disclosure
The above table summarizing the preliminary acquisition accounting is based on the assets and liabilities of Oxford City Football Club (Trading) Limited as of May 31, 2013. In June 2013, the Company advanced $111,742 when the Company’s interest in Oxford City Football Club (Trading) Limited was accounted for as an equity investment. On consolidation of the investment in Oxford City Football Club (Trading) Limited on July 1, 2013, the $111,742 amount advanced was under control of the Company.
| Cash acquired from Oxford City Football Club (Trading) – May 31, 2013 | $ | 23,385 | ||
| Advances under control of the Company on July 1, 2013 | 111,742 | |||
| Cash received from acquisition of Oxford City Football Club (Trading) Limited – as reported on the Consolidated Statement of Cash Flow | $ | 135,127 |
Summary of Unaudited Pro-forma Information
The unaudited pro-forma information below for the years ended June 30, 2013 and 2012 gives effect to the acquisition as if the acquisition had occurred on July 1, 2011. The pro-forma financial information is not necessarily indicative of the results of operations if the acquisitions had been effective as of this date.
| Years ended June 30, | ||||||||
| 2013 | 2012 | |||||||
| Sales | $ | 715,208 | $ | 394,149 | ||||
| Net loss | $ | (3,693,488 | ) | $ | (1,031,932 | ) | ||
| Net loss per common share: | ||||||||
| Basic | $ | (12.27 | ) | $ | (3.42 | ) | ||
5.INVESTMENT IN OXFORD CITY FOOTBALL CLUB (TRADING) LIMITED
Carrying Value of Investment
| Carrying value of investment on June 30, 2013 | $ | 162,814 | ||
| Gain on remeasurement of equity investment | 10,600 | |||
| Elimination of inter-company advances on consolidation of Oxford City Football Club (Trading) Limited on July 1, 2013 | (173,414 | ) | ||
| Carrying value of investment on December 31, 2013 | $ | — |
6.INTANGIBLE ASSETS
Intangible assets represent the Oxford City Football Club trade name acquired on July 1, 2013 for $475,651 and Oxford City Basketball League membership acquired on October 1, 2013 for $33,750. Intangible assets are amortized on a straight-line basis over 12 months. Intangible assets of $263,138 (intangible assets of $509,401 less accumulated amortization of $246,264) and $0 are recorded on the consolidated balance sheet at December 31, 2013 and June 30, 2013, respectively.
The Company acquired the Oxford City Basketball League membership from Oxford City Basketball Club, Inc., a commonly controlled entity that is owned by Thomas Guerriero, the Company’s Chief Executive Officer and sole director, in exchange for 80,000 shares of Series B Convertible Preferred Stock. As the Company and Oxford City Basketball Club, Inc., prior to the exchange, was under the control of Thomas Guerriero, the membership was valued at it carrying value of $33,750. As of December 31, 2013, the Company recorded a total of $8,438 in amortization expense with a net intangible asset of $25,312.
| F-8 |
OXFORD CITY FOOTBALL CLUB, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
7.STOCKHOLDERS’ EQUITY
On July 8, 2013, the shareholders approved an increase in the number of authorized shares of the Company’s common stock from 450,000 shares to 200,000,000 shares.
On October 17, 2013, the shareholders approved an increase in the number of authorized shares of the Company’s common stock from 200,000,000 shares to 500,000,000 shares and an increase in the number of authorized shares of the Company’s preferred stock from 10,000 shares to 40,000,000 shares.
Preferred Stock– The Company is authorized to issue 40,000,000 shares of $.0001 par value preferred stock. The Company has designated 10,000,000 shares of preferred stock as Series A Convertible Preferred Stock. As of December 31, 2013 and June 30, 2013, 2,500 Series A Convertible Preferred Stock are issued and outstanding.
The Company has designated 5,000,000 shares of preferred stock as Series B Convertible Preferred Stock. On November 20, 2013, 80,000 shares of Series B Convertible Preferred Stock was issued to Thomas Guerriero our Chief Executive Officer and sole director, in exchange for the transfer of the Oxford City Basketball Club league membership held by Oxford City Football Club, Inc. As the Company and Oxford City Basketball Club, Inc., prior to the exchange, was under the control of Thomas Guerriero, the membership was valued at it carrying value of $33,750. As of December 31, 2013 and June 30, 2013, 80,000 and 0 Series B Convertible Preferred Stock are issued and outstanding, respectively.
Series A Convertible Preferred Stock have the right to cast one hundred (100) votes for each share held of record on all matters submitted to a vote of holders of the Corporation’s common stock and provides that any one (1) share of Series A Convertible Preferred Stock are convertible into one hundred (100) shares of the Corporation’s common stock, par value $.0001 per share.
Series B Convertible Preferred Stock are entitled to vote together with the holders of our Series A Preferred Stock and common stock on all matters submitted to shareholders. The total aggregate issued shares of Series B Convertible Preferred Stock at any given time, regardless of their number, shall have voting rights equal to 2 times the sum of: i) the total number of shares of Common Stock which are issued and outstanding at the time of voting, plus ii) the total number of shares of any Preferred Stock which are issued and outstanding at the time of voting.
Series B Convertible Preferred Stock shall have anti-dilution protection such that any issuance of Common Stock or other financial instruments shall result in an equal number of shares so issued be issued to the Series B Convertible Preferred Stock shareholders on a pro-rated basis to the number of shares then outstanding. If anti-dilution protection ends for whatever reason, then Holders of Series B Convertible Preferred Stock are entitled to dividends at the rate of 6% per annum.
Series B Convertible Preferred Stock have a preference in any liquidation, dissolution or winding up of the company in an amount equal to $4 per share, plus any declared but unpaid dividends, and may, at any time after 18 months, have rights to convert each share of Series B Convertible Preferred Stock into three hundred (300) shares of common stock.
Common Stock - The Company is authorized to issue 500,000,000 shares of $.0001 par value common stock. As of December 31, 2013 and June 30, 2013, 1,612,617 and 223,755 shares were issued and outstanding, respectively.
From July 1, 2013 to December 31, 2013, the Company received $442,700 in cash in exchange for 442,700 shares of common stock ($1.00 per share), received $210,000 in cash for 298,750 shares of common stock ($0.70 per share) , received $70,000 in cash in exchange for 140,000 shares of common stock ($0.50 per share) and received $5,000 in cash in exchange for 15,000 shares of common stock ($0.33 per share).
From July 1, 2013 to December 31, 2013, the Company issued 252,200 of common stock to satisfy obligations under share subscription agreements for $247,200.
From July 1, 2013 to December 31, 2013 the Company issued 165,212 shares of common stock to eight investors for anti-dilution protection and no consideration.
On August 9, 2013, the Company issued 75,000 shares of common stock valued at $6,445 to satisfy obligations under the April 29, 2013 Share Exchange Agreement.
Stock Payable
From July 1, 2013 to December 31, 2013, the Company received $196,000 in cash in exchange for a common stock payable of 196,000 shares of common stock ($1.00 per share).
On November 20, 2013, the Company agreed to issued 4,000 shares of Series B Convertible Preferred Stock payable of $4,000 ($1.00 per share) in exchange for consulting services. The shares the Company agreed to issued was measured at the fair value of the services received, as the estimate of the value of services received is more reliable than the fair value of the shares granted.
Treasury Stock
As of December 31, 2013 and June 30, 2013, the Company has a treasury stock balance of $1,338 and $1,338, respectively.
| F-9 |
OXFORD CITY FOOTBALL CLUB, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
8.Related Party transactions
During the six months ended December 31, 2013, the Company repaid total advances to GCE in the amount of $8,743. The amount due to or from related party is unsecured, non-interest bearing and have no specific terms of repayment.
At December 31, 2013 and June 30, 2013, $206,576 and $0, respectively, is due to the managing director of the Oxford City Football Club (Trading) Limited, a subsidiary of the Company. The advances are non-interest bearing, unsecured and non-interest bearing.
On December 1, 2012, the Company executed a consulting agreement (the “Agreement”) with GCE Wealth, Inc. (“GCE”), a company controlled by our CEO, Mr. Thomas Guerriero. Pursuant to the terms and conditions of the Agreement, among other things GCE will act as our consultant through December 2015 and GCE will receive $950 per hour for services rendered. The total expense related to this agreement was $1,482,000 and $0 for six months ended December 31, 2013 and 2012, respectively.
As of December 31, 2013 and June 30, 2013, $2,631,537 and $1,241,194 of total officer compensation was unpaid and recorded as payable, respectively.
On December 1, 2013, the Company executed a consulting agreement (the “Agreement”) with Dorset Solutions Inc., and its representative Philip Clark. Pursuant to the terms and conditions of the Agreement, among other things Philip Clark will act as a Chief Financial Officer through December 1, 2015 and will receive $3,000 per month for services rendered. The total expense related to this agreement was $3,000 and $0 for six months ended December 31, 2013 and 2012, respectively. As of December 31, 2013 and June 30, 2013, $0 of total compensation was unpaid and recorded as payable.
9.SUBSEQUENT EVENTS
Series B Convertible Preferred Stock
On January 21, 2014, the Company issued 4,000 Series B Convertible Preferred Stock to satisfy obligations under share subscription agreements for $4,000.
Common Stock
From January 1, 2014 to February 4, 2014, the Company made the following share issuances:
i) 48,000 shares of common stock to satisfy obligations under share subscription agreements for $48,000.
ii) 100,000 shares of common stock to investor for anti-dilution protection at no consideration.
Stock Payable
From January 1, 2014 to February 4, 2014 the Company received $110,500 in cash in exchange for a common stock payable of 110,500 shares of common stock ($1.00 per share).
| F-10 |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements generally are identified by the words “believes,” “project,” “expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,” “may,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. We intend such forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and are including this statement for purposes of complying with those safe-harbor provisions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse affect on our operations and future prospects on a consolidated basis include, but are not limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Further information concerning our business, including additional factors that could materially affect our financial results, is included herein and in our other filings with the SEC.
Company Overview
We were formed on February 11, 2003, as a Florida corporation, to market and distribute children’s television shows, videos and books. On April 30, 2012, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with WMX Group, Inc., a Nevada corporation (“WMX”) and SKGI Acquisition Corp., a Nevada corporation and wholly-owned subsidiary of our company (“Acquisition Sub”), pursuant to which Acquisition Sub merged with and into WMX (the “Merger”) with the filing of the Articles of Merger with the Nevada Secretary of State on May 1, 2012 and became a wholly-owned subsidiary of our company.
We intend to carry on the business of WMX, as our only line of business. We provide online platforms and services across a plethora of industries, consistently adding WMX divisions to our portfolio to expand our opportunities to generate revenue.
Commencing on October 1, 2012, the Company started to implement its WMX Executive Training Program Strategic Action Plan. Currently, the Company is offering an Executive Education Certificate Program in Financial Planning. In order to facilitate the Strategic Action Plan, WMX has incorporated three wholly owned subsidiaries; CIT Cambridge Institute of Technology Christian University, Inc., WMX Wealth Advisors, LLC and WMX Insurance Group, Inc.
On April 29, 2013, the Company entered into a Share Exchange Agreement (the “Share Exchange Agreement”) with Oxford City Football Club, LLC, a Florida limited liability company (“Oxford City FC”), and the sole member of Oxford City FC (the “Oxford City FC Member”). The Company’s CEO and Director, Mr. Thomas Guerriero, is the Oxford City FC Member.
Pursuant to the terms of the Share Exchange Agreement, the Company agreed to acquire all of the issued and outstanding membership units of Oxford City FC in exchange for the issuance of 75,000 shares of the Company’s Series A Convertible Preferred Stock to the Oxford City FC Member. As a result of the Share Exchange Agreement, Oxford City FC became a wholly-owned subsidiary of the Company and the Company now carries on the business of Oxford City FC as its primary business. The Share Exchange Agreement contains customary representations, warranties and conditions to closing.
The closing of the Share Exchange Agreement is conditioned upon the increase of the Company’s authorized preferred stock, which is currently insufficient to issue out 75,000 shares of Series A Convertible Preferred Stock. The Company’s voting capital stock have approved by written consent an increase in authorized preferred stock from ten thousand (10,000) shares to ten million (10,000,000) shares. The increase will become effective twenty calendar days after the mailing of a Schedule 14C Information Statement to the Company’s shareholders.
All activities of the Company to September 30, 2012 relate to its organization, share issuances for services and cash and the development of software platforms for e-commerce trade. Commencing on October 1, 2012, the Company started to implement its WMX Executive Training Program Strategic Action Plan. Currently, the Company is offering an Executive Education Certificate Program in Financial Planning. In order to facilitate the Strategic Action Plan, WMX has incorporated three wholly owned subsidiaries; CIT Cambridge Institute of Technology Christian University, Inc., WMX Wealth Advisors, LLC and WMX Insurance Group, Inc. On April 29, 2013, the Company acquired 100% of Oxford City Football Club, LLC, a commonly control entity that is owned by the Company’s CEO and Director, Mr. Thomas Guerriero, in a Share Exchange Agreement. Oxford City Football Club, LLC has a 49% equity method investment in Oxford City Football Club (Trading) Limited which operates the Oxford City Football Club located in the City of Oxford, England.
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Effective July 1, 2013, all the stockholders and directors of Oxford City Football Club (Trading) Limited entered into a Voting Agreement whereby the Company, a 49% shareholder, has the right to appoint four Board members, Guerriero, LLC, a company which our CEO and director is the sole member and 1% shareholder of the Company, has the right to appoint one Board member and Oxford City Youth Football Club Limited, a 50% shareholder, has the right to appoint five Board members. Guerriero, LLC has agreed to appoint a Board Member as directed by the Company. In the case of all and any ties in voting of the Board of Directors, the Directors have agreed to give the Managing Director of the Company the authority to be the deciding vote. As a result of the Voting Agreement, the Company controls greater than 50% of the votes on the Board of Directors of Oxford City Football Club (Trading) Limited. In accordance with ASC 810, the Company on July 1, 2013 includes the accounts of Oxford City Football Club (Trading) Limited in its consolidated financial statements.
At July 1, 2013, the Company ceased to be a development stage company as its principal planned operations of operating the Oxford City Football Club, commenced.
Our principal executive office is at 10 Fairway Drive, Suite 302, Deerfield Beach, FL 33441 and our telephone number is now 617.501.6766.
Results of operations for the three and six months ended December 31, 2013 and 2012
Our operating results for the three months ended December 31, 2013 and 2012 are summarized as follows:
| Three Months Ended | Three Months Ended | Six Months Ended | Six Months Ended | |||||||||||||
| December 31, 2013 | December 31, 2012 | December 31, 2013 | December 31, 2012 | |||||||||||||
| Sales | $ | 142,749 | $ | 49,950 | $ | 248,505 | $ | 51,450 | ||||||||
| Cost of sales | 29,544 | — | 41,862 | — | ||||||||||||
| Gross profit | 113,205 | 49,950 | 206,643 | 51,450 | ||||||||||||
| Operating Expenses | 1,260,174 | 766,574 | 2,334,108 | 2,060,059 | ||||||||||||
| Other income (loss) | — | — | 10,600 | — | ||||||||||||
| Net Loss | (1,146,969 | ) | (716,624 | ) | (2,116,865 | ) | (2,008,609 | ) | ||||||||
| Net (income) loss attributed to noncontrolling interest | 82,515 | — | 131,289 | — | ||||||||||||
| Net loss attributable to Oxford City Football Club, Inc. | $ | (1,064,454 | ) | $ | (716,624 | ) | $ | (1,985,576 | ) | $ | (2,008,609 | ) | ||||
Revenues
Our sales revenue increased by $92,799 and $197,055 for the three months and six months ended December 31, 2013, respectively, as compared with the three months and six months ended December 31, 2012. The increase in revenue is primarily due to the acquisition of Oxford City Football Club, Inc. on July 1, 2013. From our operations of the Oxford City Football Club we earn revenues from gate receipts, concessions, advertising, sponsorship and grants.
We recognize revenue from the following sources:
i) Executive Training Program revenue is recognized as the services are performed.
ii) Hourly rental of facilities is recognized as the rental occurs.
iii) Admission to sporting events is recognized as the event occurs.
iv) Food and beverages revenue is recognized on sale.
v) Sponsorship revenue is recognized ratably over the period of the agreement.
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Cost of Sales
Our cost of sales increased by $29,544 and $41,862 for the three and six months ended December 31, 2013, respectively, as compared with the three and six months ended December 31, 2012. The increase is due to the purchase of food, drinks and goods for our concessions as a result of the consolidation of Oxford City Football Club.
Expenses
Our expenses for the three and six months ended December 31, 2013 and December 31, 2012, respectively, are outlined in the table below:
| Three Months Ended | Three Months Ended | Six Months Ended | Six Months Ended | |||||||||||||
| December 31, 2013 | December 31, 2012 | December 31, 2013 | December 31, 2012 | |||||||||||||
| General and administrative | $ | 244,618 | $ | 63,118 | $ | 378,910 | $ | 73,367 | ||||||||
| Amortization of intangible asset | 127,350 | — | 246,263 | — | ||||||||||||
| Depreciation | 2,132 | 1,168 | 4,264 | 1,547 | ||||||||||||
| Salaries and wages | 106,323 | — | 135,371 | — | ||||||||||||
| Software development | 918 | 905 | 1,805 | 1,000 | ||||||||||||
| Officer compensation | 741,000 | 87,447 | 1,482,000 | 212,447 | ||||||||||||
| Professional fees | 33,833 | 36,928 | 81,495 | 65,062 | ||||||||||||
| Professional stock-based fees | 4,000 | 600,000 | 4,000 | 600,000 | ||||||||||||
| (Gain) Loss on extinguishment of accounts payable and due to related parties | — | (22,992 | ) | — | 1,106,636 | |||||||||||
| Total | $ | 1,260,174 | $ | 766,574 | $ | 2,334,108 | $ | 2,060,059 | ||||||||
Our operating expenses increased by $493,600 and $274,049 for the three and six months ended December 31, 2013, respectively, as compared with the three and six months ended December 31, 2012. The increase for the three and six months ended December 31, 2013 as compared to three and six months ended December 31, 2012, is due to increase in general and administration, amortization, salaries and wages and officer compensation as a result of the acquisition of Oxford City Football Club on July 1, 2013.
We anticipate that we will incur approximately $52,000 for operating expenses, including, legal, accounting and audit expenses associated with our reporting requirements as a public company under the Exchange Act during the next twelve months.
Net Loss
We recorded a net loss of $1,146,969 and $2,116,865 for the three and six months ended December 31, 2013, respectively, as compared with $716,624 and $2,008,609 for the three and six months ended December 31, 2012.
Liquidity and Capital Resources
Working Capital
| December 31, 2013 | June 30, 2013 | |||||||
| Current Assets | $ | 438,720 | $ | 10,382 | ||||
| Current Liabilities | $ | 3,366,114 | $ | 1,301,675 | ||||
| Working Deficit | $ | (2,927,394 | ) | $ | (1,291,293 | ) | ||
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Cash Flows
| Six Months Ended December 31, 2013 | Six Months Ended December 31, 2012 | |||||||
| Cash used in Operating Activities | $ | (662,753 | ) | $ | (390,683 | ) | ||
| Cash provided by (used in) Investing Activities | $ | 135,127 | $ | (17,676 | ) | |||
| Cash provided by Financing Activities | $ | 912,315 | $ | 411,000 | ||||
| Foreign exchange gain (loss) | $ | (3,309 | ) | — | ||||
| Increase (Decrease) in Cash | $ | 381,380 | $ | 2,641 | ||||
Cash Used In Operating Activities
Our net loss for the six months ended December 31, 2013 was the main contributing factor for our negative operating cash flow, mainly offset by an increase in officer compensation payable of $1,390,343.
Cash from Investing Activities
We received $135,127 of cash from the acquisition of the Oxford City Football Club (Trading) Limited.
Cash from Financing Activities
We generated $923,700 in cash from the issuance of common stock during the six months ended December 31, 2013.
As of December 31, 2013, we have insufficient cash to operate our business at the current level for the next twelve months and insufficient cash to achieve our business goals. The success of our business plan beyond the next 12 months is contingent upon us obtaining additional financing. We intend to fund operations through debt and/or equity financing arrangements, which may be insufficient to fund our capital expenditures, working capital, or other cash requirements. We do not have any formal commitments or arrangements for the sales of stock or the advancement or loan of funds at this time. There can be no assurance that such additional financing will be available to us on acceptable terms, or at all.
Off Balance Sheet Arrangements
As of December 31, 2013, there were no off balance sheet arrangements.
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Going Concern
The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. We have incurred losses since inception and have a cumulative retained deficit of $7,054,344 as of December 31, 2013. We require capital for our contemplated operational and marketing activities. Our ability to raise additional capital through the future issuances of common stock is unknown. The obtainment of additional financing, the successful development of our contemplated plan of operations, and our transition, ultimately, to the attainment of profitable operations are necessary for us to continue operations. The ability to successfully resolve these factors raise substantial doubt about our ability to continue as a going concern. Our financial statements do not include any adjustments that may result from the outcome of these aforementioned uncertainties.
In order to mitigate the risk related with this uncertainty, we plan to issue additional shares of common stock for cash and services during the next 12 months.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
A smaller reporting company is not required to provide the information required by this Item.
Item 4. Controls and Procedures
Disclosure Controls and Procedures
As required by Rule 13a-15 of the Securities Exchange Act of 1934, our principal executive officer and principal financial officer evaluated our company's disclosure controls and procedures (as defined in Rules 13a-15(e) of the Securities Exchange Act of 1934) as of the end of the period covered by this report. Based on this evaluation, our principal executive officer and principal financial officer concluded that as of the end of the period covered by this report, these disclosure controls and procedures were not effective to ensure that the information required to be disclosed by our company in reports it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities Exchange Commission and to ensure that such information is accumulated and communicated to our company's management, including our principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure. The conclusion that our disclosure controls and procedures were not effective was due to the presence of the following material weaknesses in internal control over financial reporting which are indicative of many small companies with small staff: (i) inadequate segregation of duties and effective risk assessment; and (ii) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of both United States generally accepted accounting principles and Securities and Exchange Commission guidelines. Management anticipates that such disclosure controls and procedures will not be effective until the material weaknesses are remediated.
We plan to take steps to enhance and improve the design of our internal controls over financial reporting. During the period covered by this quarterly report on Form 10-Q, we have not been able to remediate the material weaknesses identified above. To remediate such weaknesses, we plan to implement the following changes during our fiscal year ending June 30, 2014, subject to obtaining additional financing: (i) appoint additional qualified personnel to address inadequate segregation of duties and ineffective risk management; and (ii) adopt sufficient written policies and procedures for accounting and financial reporting. The remediation efforts set out above are largely dependent upon our securing additional financing to cover the costs of implementing the changes required. If we are unsuccessful in securing such funds, remediation efforts may be adversely affected in a material manner.
Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues, if any, within our company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting during the quarter ended December 31, 2013 that have materially affected or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II – OTHER INFORMATION
We are not a party to any pending legal proceeding. We are not aware of any pending legal proceeding to which any of our officers, directors, or any beneficial holders of 5% or more of our voting securities are adverse to us or have a material interest adverse to us.
A smaller reporting company is not required to provide the information required by this Item.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
We incurred the following stock transactions during this quarter and thereafter:
From October 1, 2013 to December 31, 2013, the Company received $298,200 in cash in exchange for 298,200 shares of common stock ($1.00 per share), received $210,000 in cash for 298,750 shares of common stock ($0.70 per share) and received $70,000 in cash in exchange for 140,000 shares of common stock ($0.50 per share).
From October 1, 2013 to December 31, 2013, the Company issued 113,000 of common stock to satisfy obligations under share subscription agreements for $113,000.
From October 1, 2013 to December 31, 2013 the Company issued 165,212 shares of common stock to eight investors for anti-dilution protection and no consideration.
Unless otherwise indicated, these securities were issued pursuant to Section 4(2) of the Securities Act and/or Rule 506 promulgated thereunder. The holders represented their intention to acquire the securities for investment only and not with a view towards distribution. The investors were given adequate information about us to make an informed investment decision. We did not engage in any general solicitation or advertising. We directed our transfer agent to issue the stock certificates with the appropriate restrictive legend affixed to the restricted stock.
Item 3. Defaults upon Senior Securities
None
Item 4. Mine Safety Disclosures
Not applicable.
None
| Exhibit Number | Description of Exhibit |
| 31.1 | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
| 31.2 | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
| 32.1 | Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
| 101** | The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2013 formatted in Extensible Business Reporting Language (XBRL). |
**Provided herewith
| 9 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| OXFORD CITY FOOTBALL CLUB, INC. | |
| Date: | February 14, 2014
By:/s/ Thomas Guerriero Thomas Guerriero Title: Chief Executive Officer and Director
|
| Date: | February 14, 2014
By:/s/ Philip Clark Philip Clark Title: Chief Financial Officer
|
| 10 |