U.S. SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





Form 10-K





(Mark One)





x ANNUAL REPORT UNDER SECTION 13 OR 15(d)


OF THE SECURITIES EXCHANGE ACT OF 1934





For the fiscal year ended December 31, 2010





o TRANSITION REPORT UNDER SECTION 13 OR 15(d)


OF THE SECURITIES EXCHANGE ACT OF 1934





For the transition period from ______________ to ______________





Commission File Number 000-52330










RFG Acquisition II Inc.


(Exact name of registrant as specified in its charter)










Delaware

35-2277305(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)




c/o RainMaker Financial Group Inc., 650 Warrenville Road, Suite 103, Lisle, Illinois 60532


(Address of principal executive offices)





(312) 896-8292


(Registrant’s telephone number, including area code)





Securities registered under Section 12(b) of the Exchange Act:





None.





Securities registered under Section 12(g) of the Exchange Act:





Common Stock, $0.0001 par value per share


(Title of Class)





Check whether the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No x





Check whether the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. Yes o No o





Check whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o





Check whether the registrant has submitted electronically and posted on its corporate website, 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). Yes o No o





Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-K (§229.405 of this chapter) contained herein, and no disclosure will 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. o





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




Large Accelerated Filer o
Accelerated Filer oNon-accelerated Filer o
Smaller Reporting Company x(Do not check if a smaller reporting company.)




Check whether the issuer is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes x No o





As of December 31, 2010, there were no non-affiliate holders of common stock of the Company.





APPLICABLE ONLY TO CORPORATE REGISTRANTS





As of March 22 2011, there were 2,500,000 shares of common stock, par value $.0001, outstanding.











FORWARD-LOOKING STATEMENTS





Certain statements made in this Annual Report on Form 10-K are “forward-looking statements” (within the meaning of the Private Securities Litigation Reform Act of 1995) regarding the plans and objectives of management for future operations. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of RFG Acquisition II, Inc. (the “Company”) to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The forward-looking statements included herein are based on current expectations that involve numerous risks and uncertainties. The Company’s plans and objectives are based, in part, on assumptions involving the continued expansion
of business. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the control of the Company. Although the Company believes its assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, there can be no assurance the forward-looking statements included in this Report will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by the Company or any other person that the objectives and plans of the Company will be achieved.





2




PART I





Item 1. Description of Business.





RFG Acquisition II Inc. (“we”, “us”, “our” or the “Company”) was incorporated in the State of Delaware on August 29, 2006 and maintains its principal executive offices at c/o RainMaker Financial Group Inc., 650 Warrenville Road, Suite 103, Lisle, Illinois 60532. Since inception, the Company has been engaged in organizational efforts and obtaining initial financing. The Company was formed as a vehicle to pursue a business combination through the acquisition of, or merger with, an operating business. The Company filed a registration statement on Form 10-SB with the U.S. Securities and Exchange Commission (the “SEC”) on November 22, 2006, and since its effectiveness, the Company has focused its efforts to identify a possible business combination. The
Company selected December 31 as its fiscal year end.





The Company is currently considered to be a “blank check” company. The U.S. Securities and Exchange Commission (the “SEC”) defines those companies as “any development stage company that is issuing a penny stock, within the meaning of Section 3 (a)(51) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and that has no specific business plan or purpose, or has indicated that its business plan is to merge with an unidentified company or companies.” Under SEC Rule 12b-2 under the Exchange Act, the Company also qualifies as a “shell company,” because it has no or nominal assets (other than cash) and no or nominal operations. Many states have enacted statutes, rules and regulations limiting the sale of securities of “blank
check” companies in their respective jurisdictions. Management does not intend to undertake any efforts to cause a market to develop in our securities, either debt or equity, until we have successfully concluded a business combination. The Company intends to comply with the periodic reporting requirements of the Exchange Act for so long as it is subject to those requirements.





The Company was organized as a vehicle to investigate and, if such investigation warrants, acquire a target company or business seeking the perceived advantages of being a publicly held corporation. The Company’s principal business objective for the next 12 months and beyond such time will be to achieve long-term growth potential through a combination with a business rather than immediate, short-term earnings. The Company will not restrict its potential candidate target companies to any specific business, industry or geographical location and, thus, may acquire any type of business.





The analysis of new business opportunities will be undertaken by or under the supervision of Richard F. Beston, Jr. an officer and sole director of the Company, and John W. Branch and David W. Matre, both officers of the Company. As of this date the Company has not entered into any definitive agreement with any party, nor have there been any specific discussions with any potential business combination candidate regarding business opportunities for the Company. The Company has unrestricted flexibility in seeking, analyzing and participating in potential business opportunities. In its efforts to analyze potential acquisition targets, the Company will consider the following kinds of factors:





(a)
Potential for growth, indicated by new technology, anticipated market expansion or new products;





(b)
Competitive position as compared to other firms of similar size and experience within the industry segment as well as within the industry as a whole;





(c)
Strength and diversity of management, either in place or scheduled for recruitment;




3




(d)
Capital requirements and anticipated availability of required funds, to be provided by the Company or from operations, through the sale of additional securities, through joint ventures or similar arrangements or from other sources;





(e)
The cost of participation by the Company as compared to the perceived tangible and intangible values and potentials;





(f)
The extent to which the business opportunity can be advanced; and




(g)
The accessibility of required management expertise, personnel, raw materials, services, professional assistance and other required items.





In applying the foregoing criteria, no one of which will be controlling, management will attempt to analyze all factors and circumstances and make a determination based upon reasonable investigative measures and available data. Potentially available business opportunities may occur in many different industries, and at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities extremely difficult and complex. Due to the Company’s limited capital available for investigation, the Company may not discover or adequately evaluate adverse facts about the opportunity to be acquired. In evaluating a prospective business combination, we will conduct as extensive a due diligence review of potential targets as possible given the lack of
information which may be available regarding private companies, our limited personnel and financial resources and the inexperience of our management with respect to such activities. We expect that our due diligence will encompass, among other things, meetings with the target business’s incumbent management and inspection of its facilities, as necessary, as well as a review of financial and other information which is made available to us. This due diligence review will be conducted either by our management or by unaffiliated third parties we may engage, including but not limited to attorneys, accountants, consultants or such other professionals. At this time the Company has not specifically identified any third parties that it may engage. The costs associated with hiring third parties to complete a business combination target may be significant and are difficult to determine as such costs may vary depending on a variety of factors, including the amount of time it takes to complete
a business combination, the location of the target company and the size and the complexity of the target company. Our limited funds and the lack of full-time management will likely make it impracticable to conduct a complete and exhaustive investigation and analysis of a target business before we consummate a business combination. Management decisions, therefore, will likely be made without detailed feasibility studies, independent analysis, market surveys and the like which, if we had more funds available to us, would be desirable. We will be particularly dependent in making decisions upon information provided by the promoters, owners, sponsors or other associated with the target business seeking our participation.





The time and costs required to select and evaluate a target business and to structure and complete a business combination cannot presently be ascertained with any degree of certainty. The amount of time it takes to complete a business combination, the location of the target company and the size and complexity of the business of the target company are all factors that determine the costs associated with completing a business combination transaction. The time and costs required to complete a business combination transaction can be ascertained once a business combination target has been identified. Any costs incurred with respect to evaluation of a prospective business combination that is not ultimately completed will result in a loss to us.





COMPETITION





In identifying, evaluating and selecting a target business, we may encounter intense competition from other entities having a business objective similar to ours. There are numerous “public shell” companies either actively or passively seeking operating businesses with which to merge in addition to a large number of “blank check” companies formed and capitalized specifically to acquire operating businesses. Additionally, we are subject to competition from other companies looking to expand their operations through the acquisition of a target business. Many of these entities are well established and have extensive experience identifying and effecting business combinations directly or through affiliates. Many of these competitors possess greater technical, human and other resources than us
and our financial resources will be relatively limited when contrasted with those of many of these competitors. Our ability to compete in acquiring certain sizable target businesses is limited by our available financial resources. This inherent competitive limitation gives others an advantage in pursuing the acquisition of a target business. Further, our outstanding warrants and the future dilution they potentially represent may not be viewed favorably by certain target businesses.





4


Any of these factors may place us at a competitive disadvantage in successfully negotiating a business combination. Our management believes, however, that our status as a public entity and potential access to the United States public equity markets may give us a competitive advantage over privately-held entities with a business objective similar to ours to acquire a target business on favorable terms.





If we succeed in effecting a business combination, there will be, in all likelihood, intense competition from competitors of the target business. Many of our target business’ competitors are likely to be significantly larger and have far greater financial and other resources than we will. Some of these competitors may be divisions or subsidiaries of large, diversified companies that have access to financial resources of their respective parent companies. Our target business may not be able to compete effectively with these companies or maintain them as customers while competing with them on other projects. In addition, it is likely that our target business will face significant competition from smaller companies that have specialized capabilities in similar
areas. We cannot accurately predict how our target business’ competitive position may be affected by changing economic conditions, customer requirements or technical developments. We cannot assure you that, subsequent to a business combination, we will have the resources to compete effectively.





FORM OF ACQUISITION





The manner in which the Company participates in an opportunity will depend upon the nature of the opportunity, the respective needs and desires of the Company and the promoters of the opportunity, and the relative negotiating strength of the Company and such promoters.





It is likely that the Company will acquire its participation in a business opportunity through the issuance of common stock or other securities of the Company. Although the terms of any such transaction cannot be predicted, it should be noted that in certain circumstances the criteria for determining whether or not an acquisition is a so-called “tax free” reorganization under Section 368(a)(1) of the Internal Revenue Code of 1986, as amended (the “Code”) depends upon whether the owners of the acquired business own 80% or more of the voting stock of the surviving entity. If a transaction were structured to take advantage of these provisions rather than other “tax free” provisions provided under the Code, all prior stockholders would in such circumstances retain 20% or less of
the total issued and outstanding shares of the surviving entity. Under other circumstances, depending upon the relative negotiating strength of the parties, prior stockholders may retain substantially less than 20% of the total issued and outstanding shares of the surviving entity. This could result in substantial additional dilution to the equity of those who were stockholders of the Company prior to such reorganization.





The present stockholders of the Company will likely not have control of a majority of the voting securities of the Company following a reorganization transaction. As part of such a transaction, the Company’s sole director may resign and one or more new directors may be appointed without any vote by stockholders.





In the case of an acquisition, the transaction may be accomplished upon the sole determination of management without any vote or approval by stockholders. In the case of a statutory merger or consolidation directly involving the Company, it will likely be necessary to call a stockholders’ meeting and obtain the approval of the holders of a majority of the outstanding securities. The necessity to obtain such stockholder approval may result in delay and additional expense in the consummation of any proposed transaction and will also give rise to certain appraisal rights to dissenting stockholders. Most likely, management will seek to structure any such transaction so as not to require stockholder approval.





5


It is anticipated that the investigation of specific business opportunities and the negotiation, drafting and execution of relevant agreements, disclosure documents and other instruments will require substantial management time and attention and substantial cost for accountants, attorneys and others. If a decision is made not to participate in a specific business opportunity, the costs theretofore incurred in the related investigation might not be recoverable. Furthermore, even if an agreement is reached for the participation in a specific business opportunity, the failure to consummate that transaction may result in the loss to the Registrant of the related costs incurred.





We presently have no employees apart from our management. Our officers and sole director are engaged in outside business activities and anticipate that they will devote to our business very limited time until the acquisition of a successful business opportunity has been identified. We expect no significant changes in the number of our employees other than such changes, if any, incident to a business combination.





Item 1A. Risk Factors.





As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide this information.





Item 1B. Unresolved Staff Comments.





As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide this information.





Item 2. Description of Property.





The Company neither rents nor owns any properties. The Company utilizes the office space and equipment of its management at no cost. Management estimates such amounts to be immaterial. The Company currently has no policy with respect to investments or interests in real estate, real estate mortgages or securities of, or interests in, persons primarily engaged in real estate activities.





Item 3. Legal Proceedings.





There are no material pending legal proceedings to which the Company, any executive officer, any owner of record or beneficially of more than five percent of any class of voting securities is a party or as to which any of its property is subject, and no such proceedings are known to the Company to be threatened or contemplated against it.





Item 4. Removed and Reserved.





None.





6


PART II





Item 5. Market for Common Equity, Related Stockholder Matters and Small Business Issuer Purchases of Equity Securities.





Common Stock





Our Certificate of Incorporation authorizes the issuance of up to 100,000,000 shares of common stock, par value $.0001 per share (the “Common Stock”). The Common Stock is not listed on a publicly-traded market. As of March 22, 2011, there were 2 holders of record of the Common Stock.





Preferred Stock





Our Certificate of Incorporation authorizes the issuance of up to 10,000,000 shares of preferred stock, par value $.0001 per share (the “Preferred Stock”). The Company has not yet issued any of its preferred stock.




Dividend Policy





The Company has not declared or paid any cash dividends on its common stock and does not intend to declare or pay any cash dividend in the foreseeable future. The payment of dividends, if any, is within the discretion of the Board of Directors and will depend on the Company’s earnings, if any, its capital requirements and financial condition and such other factors as the Board of Directors may consider.





Securities Authorized for Issuance under Equity Compensation Plans





The Company does not have any equity compensation plans or any individual compensation arrangements with respect to its common stock or preferred stock. The issuance of any of our common or preferred stock is within the discretion of our Board of Directors, which has the power to issue any or all of our authorized but unissued shares without stockholder approval.





Recent Sales of Unregistered Securities





The Company did not sell any equity securities that were not registered under the Securities Act during the quarter ended December 31, 2010.





No securities have been issued for services. Neither the Registrant nor any person acting on its behalf offered or sold the securities by means of any form of general solicitation or general advertising. No services were performed by any purchaser as consideration for the shares issued.





Issuer Purchases of Equity Securities





None.





Item 6. Selected Financial Data.





As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide this information.





Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation





The Company was organized as a vehicle to investigate and, if such investigation warrants, acquire a target company or business seeking the perceived advantages of being a publicly held corporation. Our principal business objective for the next 12 months and beyond such time will be to achieve long-term growth potential through a combination with a business rather than immediate, short-term earnings. The Company will not restrict our potential candidate target companies to any specific business, industry or geographical location and, thus, may acquire any type of business.





7


The Company currently does not engage in any business activities that provide cash flow. During the next twelve months we anticipate incurring costs related to:




(i)
filing Exchange Act reports, and




(ii)
investigating, analyzing and consummating an acquisition.





We believe we will be able to meet these costs through use of funds in our treasury, through deferral of fees by certain service providers and additional amounts, as necessary, to be loaned to or invested in us by our stockholders, management or other investors. As of the date of the period covered by this report, the Company has no funds in its treasury. There are no assurances that the Company will be able to secure any additional funding as needed. Currently, however our ability to continue as a going concern is dependent upon our ability to generate future profitable operations and/or to obtain the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they come due. Our ability to continue as a going
concern is also dependant on our ability to find a suitable target company and enter into a possible reverse merger with such company. Management’s plan includes obtaining additional funds by equity financing through a reverse merger transaction and/or related party advances, however there is no assurance of additional funding being available.





The Company may consider acquiring a business which has recently commenced operations, is a developing company in need of additional funds for expansion into new products or markets, is seeking to develop a new product or service, or is an established business which may be experiencing financial or operating difficulties and is in need of additional capital. In the alternative, a business combination may involve the acquisition of, or merger with, a company which does not need substantial additional capital but which desires to establish a public trading market for its shares while avoiding, among other things, the time delays, significant expense, and loss of voting control which may occur in a public offering.





Our management has not had any contact or discussions with representatives of other entities regarding a business combination with us. Any target business that is selected may be a financially unstable company or an entity in its early stages of development or growth, including entities without established records of sales or earnings. In that event, we will be subject to numerous risks inherent in the business and operations of financially unstable and early stage or potential emerging growth companies. In addition, we may effect a business combination with an entity in an industry characterized by a high level of risk, and, although our management will endeavor to evaluate the risks inherent in a particular target business, there can be no assurance that we will properly ascertain or assess all significant
risks. Our management anticipates that it will likely be able to effect only one business combination, due primarily to our limited financing and the dilution of interest for present and prospective stockholders, which is likely to occur as a result of our management’s plan to offer a controlling interest to a target business in order to achieve a tax-free reorganization. This lack of diversification should be considered a substantial risk in investing in us, because it will not permit us to offset potential losses from one venture against gains from another.





The Company anticipates that the selection of a business combination will be complex and extremely risky. Because of general economic conditions, rapid technological advances being made in some industries and shortages of available capital, our management believes that there are numerous firms seeking the perceived benefits of becoming a publicly traded corporation. Such perceived benefits of becoming a publicly traded corporation include, among other things, facilitating or improving the terms on which additional equity financing may be obtained, providing liquidity for the principals of and investors in a business, creating a means for providing incentive stock options or similar benefits to key employees, and offering greater flexibility in structuring
acquisitions, joint ventures and the like through the issuance of stock. Potentially available business combinations may occur in many different industries and at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities extremely difficult and complex.





8


Liquidity and Capital Resources





As of December 31, 2010, the Company had assets equal to $66, comprised exclusively of cash. This compares with assets of $1,281, comprised exclusively of cash, as of December 31, 2009. The Company’s total liabilities as of December 31, 2010 totaled $124,954 comprised of accounts payable, accrued expenses, loans payable to stockholders and accrued interest payable. This compares with total liabilities of $95,437 comprised of accounts payable, accrued expenses, loans payable to stockholders and accrued interest payable, as of December 31, 2009.The Company can provide no assurance that it can continue to satisfy its cash requirements for at least the next twelve months.





The following is a summary of the Company’s cash flows provided by (used in) operating, investing, and financing activities for the years ended December 31, 2010 and December 31, 2009 and for the cumulative period from August 29, 2006 (Inception) to December 31, 2010.





Fiscal Year

Ended

December 31, 2010


Fiscal Year

Ended

December 31, 2009


For the Cumulative

Period from

August 29, 2006 (Inception) to

December 31, 2010Net Cash (Used in) Operating Activities

$
(25,715
)

$
(29,842
)

$
(141,444
)Net Cash (Used in) Investing Activities


-



-



-Net Cash Provided by Financing Activities

$
24,500


$
30,500


$
141,510Net Increase (Decrease) in Cash

$
(1,215
)

$
658


$
66





The Company has nominal assets and has generated no revenues since inception. The Company is also dependent upon the receipt of capital investment or other financing to fund its ongoing operations and to execute its business plan of seeking a combination with a private operating company. We believe we will be able to meet these costs through additional borrowing from the existing line of credit agreements. In addition, the Company is dependent upon certain related parties to provide continued funding and capital resources. If continued funding and capital resources are unavailable at reasonable terms, the Company may not be able to implement its plan of operations.





Results of Operations





The Company has not conducted any active operations since inception, except for its efforts to locate suitable acquisition candidates. No revenue has been generated by the Company from August 29, 2006 (Inception) to December 31, 2010. It is unlikely the Company will have any revenues unless it is able to effect an acquisition or merger with an operating company, of which there can be no assurance. It is management’s assertion that these circumstances may hinder the Company’s ability to continue as a going concern. The Company’s plan of operation for the next twelve months shall be to continue its efforts to locate suitable acquisition candidates.





9


For the fiscal year ended December 31, 2010, the Company had a net loss of $30,732, consisting of legal, accounting, audit, and other professional service fees incurred in relation to the preparation and filing of the Company’s periodic reports.





For the fiscal year ended December 31, 2009, the Company had a net loss of $29,912, consisting of legal, accounting, audit, and other professional service fees incurred in relation to the preparation and filing of the Company’s periodic reports.





For the cumulative period from August 29, 2006 (Inception) to December 31, 2010, the Company had a net loss of $154,888 comprised exclusively of legal, accounting, audit, and other professional service fees incurred in relation to the formation of the Company, the filing of the Company’s Registration Statement on Form 10-SB in November of 2006, and the filing of the Company’s periodic reports.





Off-Balance Sheet Arrangements





The Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.





Contractual Obligations





As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide this information.





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





As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide this information.





Item 8. Financial Statements and Supplementary Data.





Audited financial statements begin on the following page of this report.





10


RFG ACQUISITION II INC.


(A Development Stage Company)


Table of Contents


December 31, 2010





PageReport of Independent Registered Public Accounting Firm


F-1Financial Statements:Balance Sheets


F-2Statements of Operations


F-3Statements of Stockholders’ Equity (Deficiency)


F-4Statements of Cash Flows


F-5Notes to Financial Statements


F-6





11




REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM




To the Board of Directors and Stockholders of


RFG Acquisition II, Inc.


Lisle, IL




We have audited the accompanying balance sheets of RFG Acquisition II, Inc. (a development stage company) (the “Company”) as of December 31, 2010, and 2009, and the related statements of operations, stockholders’ equity/(deficiency), and cash flows for each of the years in the two-year period ended December 31, 2010, and the cumulative period August 29, 2006 (inception) through December 31, 2010. The Company’s management is responsible for these financial statements. 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, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.




In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of RFG Acquisition II, Inc. as of December 31, 2010 and 2009, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2010, and the cumulative period August 29, 2006 (inception) through December 31, 2010, in conformity with accounting principles generally accepted in the United States of America.




The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company is in the development stage and has incurred net losses from inception. This raises substantial doubt about its ability to continue as a going concern. Management’s plans in regards to these matters are also described in Note 3. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.




/s/ Raich Ende Malter & Co. LLP


Raich Ende Malter & Co. LLP


New York, New York


March 21, 2011




F-1





RFG ACQUISITION II INC.


(A Development Stage Company)


Balance Sheets





December 31,

2010


December 31,

2009AssetsCurrent AssetsCash

$
66


$
1,281Total Assets

$
66


$
1,281Liabilities and Stockholders’ Equity/(Deficiency)Current LiabilitiesAccounts payable and accrued expenses

$
400


$
155Long Term LiabilitiesLoan payable – stockholders


111,510



87,010Accrued interest payable – stockholders


13,044



8,272Total Long Term Liabilities


124,554



95,282Total Liabilities


124,954



95,437Stockholders’ Equity/(Deficiency)Preferred stock, $.0001 par value; 10,000,000 shares authorized; none issued and outstanding


-



-Common stock, $.0001 par value; 100,000,000 shares authorized; 2,500,000 shares issued and outstanding


250



250Additional paid-in capital


29,750



29,750Deficit accumulated during the development stage


(154,888
)


(124,156
)Total Stockholders’ Equity/(Deficiency)


(124,888
)


(94,156
)Total Liabilities and Stockholders’ Equity/(Deficiency)

$
66


$
1,281




See notes to financial statements.





F-2





RFG ACQUISITION II INC.


(A Development Stage Company)


Statements of Operations





For the Year Ended

December 31,

2010


For the

Year Ended

December 31,

2009


For the Period August 29, 2006 (Inception) Through

December 31,

2010Revenues

$
-


$
-


$
-General and administrative expenses


25,960



26,422



141,844(Loss) before other expenses


(25,960
)


(26,422
)


(141,844
)Interest expense


4,772



3,490



13,044Loss before (benefit) from income taxes


(30,732
)


(29,912
)


(154,888
)(Benefit) from income taxes


-



-



-Net (Loss)

$
(30,732
)

$
(29,912
)

$
(154,888
)Basic and Diluted (Loss) Per Share

$
(0.01
)

$
(0.01
)Weighted Average Number of Common Shares Outstanding – Basic and Diluted


2,500,000



2,500,000




See notes to financial statements.




F-3





RFG ACQUISITION II INC.


(A Development Stage Company)


Statements of Stockholders’ Equity/(Deficiency)


For the Period August 29, 2006 (Inception) Through December 31, 2010


Additional


(Deficit)Accumulated During the


Stockholders’Preferred Stock


Common Stock


Subscription


Paid-in


Development


Equity/Shares


Amount


Shares


Amount


Receivable


Capital


Stage


(Deficiency)August 29, 2006 - common stock subscription


-


$
-



2,500,000


$
250


$
(250
)

$
-


$
-


$
-August 31, 2006 – contributed capital


-



-



-



-



250



29,750



-



30,000Net (loss)


-



-



-



-



-



-



(28,511
)


(28,511
)Balance at December 31, 2006


-



-



2,500,000



250



-



29,750



(28,511
)


1,489Net (loss)


-



-



-



-



-



-



(34,932
)


(34,932
)Balance at December 31, 2007


-



-



2,500,000



250



-



29,750



(63,443
)


(33,443
)Net (loss)


-



-



-



-



-



-



(30,801
)


(30,801
)Balance at December 31, 2008


-



-



2,500,000



250



-



29,750



(94,244
)


(64,244
)Net (loss)


-



-



-



-



-



-



(29,912
)


(29,912
)Balance at December 31, 2009


-



-



2,500,000



250



-



29,750



(124,156
)


(94,156
)Net (loss)


-



-



-



-



-



-



(30,732
)


(30,732
)Balance at December 31, 2010


-


$
-



2,500,000


$
250


$
-


$
29,750


$
(154,888
)

$
(124,888
)




See notes to financial statements.




F-4





RFG ACQUISITION II INC.


(A Development Stage Company)


Statements of Cash Flows





For the Year Ended

December 31,

2010


For the Year Ended

December 31,

2009


For the Period

August 29, 2006

(Inception) Through

December 31,

2010Cash Flows from Operating ActivitiesNet (loss)

$
(30,732
)

$
(29,912
)

$
(154,888
)Adjustments to reconcile net (loss) to net cash used in operating activities:Increase (decrease) in:Accounts payable and accrued expenses


245



(3,420
)


400Accrued interest payable


4,772



3,490



13,044Net cash (used in) operating activities


(25,715
)


(29,842
)


(141,444
)Cash Flows from Financing ActivitiesProceeds from issuance of common stock


-



-



30,000Proceeds from stockholder loans


24,500



30,500



111,510Net cash provided by financing activities


24,500



30,500



141,510Net Increase in Cash


(1,215
)


658



66Cash at beginning of period


1,281



623



-Cash at end of period

$
66


$
1,281


$
66





See notes to financial statements.





F-5





RFG ACQUISITION II INC.


(A Development Stage Company)


Notes to Financial Statements


December 31, 2010




NOTE 1 -           ORGANIZATION AND BUSINESS:





RFG Acquisition II Inc., a Development Stage Company, (the “Company”) was incorporated in the state of Delaware on August 29, 2006 with the objective to acquire, or merge with, an operating business.





The Company was organized as a vehicle to investigate and, if such investigation warrants, acquire a target company or business seeking the perceived advantages of being a publicly traded corporation and, to a lesser extent, desires to employ the Company’s funds in its business. The Company’s principal business objective over the next twelve months and beyond will be to achieve long-term growth potential through a combination with a business rather than immediate short-term earnings. The Company will not restrict its potential target companies to any specific business, industry or geographical location. The analysis of business opportunities will be undertaken by, or under the supervision of, the officers and directors of the Company.





NOTE 2 -           SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:





(a)
Use of Estimates:




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 amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the balance sheet and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.





(b)
Cash Equivalents:


The Company considers highly liquid financial instruments purchased with a maturity of three months or less to be cash equivalents. There are no cash equivalents at the balance sheet date.





(c)
Income Taxes:




The Company utilizes the liability method of accounting for income taxes. Under the liability method deferred tax assets and liabilities are determined based on the differences between financial reporting basis and the tax basis of the assets and liabilities and are measured using enacted tax rates and laws that will be in effect, when the differences are expected to reverse. An allowance against deferred tax assets is recognized, when it is more likely than not, that such tax benefits will not be realized.





The Company recognizes the financial statement benefit of an uncertain tax position only after considering the probability that a tax authority would sustain the position in an examination. For tax positions meeting a “more-likely-than-not” threshold, the amount recognized in the financial statements is the benefit expected to be realized upon settlement with the tax authority. For tax positions not meeting the threshold, no financial statement benefit is recognized. The Company recognizes interest and penalties, if any, related to uncertain tax positions in income tax expense. As of December 31, 2010, the Company is unaware of any uncertain tax positions.




F-6




RFG ACQUISITION II INC.


(A Development Stage Company)


Notes to Financial Statements


December 31, 2010








NOTE 2 -           SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued):




(d)
Loss per Common Share:




Basic loss per share is calculated using the weighted-average number of common shares outstanding during each reporting period. Diluted loss per share includes potentially dilutive securities such as outstanding options and warrants, using various methods such as the treasury stock or modified treasury stock method in the determination of dilutive shares outstanding during each reporting period. The Company does not have any potentially dilutive instruments.





NOTE 3-
GOING CONCERN:





The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the recoverability of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred net losses from inception of approximately $155,000, which, among other factors, raises substantial doubt about the Company’s ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent upon management’s plan to find a suitable acquisition or merger candidate, raise additional capital from the sale of stock, receive additional loans from its stockholders, and ultimately, income from operations. The accompanying financial statements do not include any adjustments that might be required
should the Company be unable to recover the value of its assets or satisfy its liabilities.





NOTE 4 -           COMMON STOCK:





The Company is authorized to issue one hundred million (100,000,000) shares of common stock. On August 29, 2006 the Company sold two million five hundred thousand (2,500,000) shares of common stock to two investors for $250, which was paid on August 31, 2006. These shareholders also contributed an additional amount of $29,750, for total cash consideration of $30,000





NOTE 5 -           PREFERRED STOCK:





The Company is authorized to issue ten million (10,000,000) shares of $.0001 par value preferred stock with designations, voting and other rights and preferences as may be determined from time to time by the Board of Directors of the Company.




F-7


RFG ACQUISITION II INC.


(A Development Stage Company)


Notes to Financial Statements


December 31, 2010





NOTE 6 -           INCOME TAXES:





As of December 31, 2010, the Company has net operating loss carryforwards of approximately $155,000 to reduce future federal and state taxable income through 2030.





The Company has approximately $44,000 and $32,000 in deferred tax assets at December 31, 2010 and 2009, respectively, resulting from net operating loss carryforwards. At December 31, 2010 and 2009, a valuation allowance has been recorded to fully offset these deferred tax assets because the future realization of the related income tax benefits is uncertain. The difference between the statutory tax rate of 34% and the effective tax rate of 0% is due to the surtax exemption and the valuation allowance.





The Company currently has no federal or state tax examinations in progress nor has it had any federal or state examinations since its inception.





The earliest tax years that are subject to examination by taxing authorities by major jurisdictions are as follows:





Jurisdiction

Fiscal YearFederal

2007Delaware

2007




NOTE 7 -           LOAN PAYABLE STOCKHOLDERS:





On November 20, 2006, the Company entered into formal line of credit agreements with its two stockholders, who are also officers of the company. The agreements provided the Company with revolving credit lines up to an aggregate maximum of $12,510. The agreements were amended on February 26, 2007 to increase the maximum aggregate principal amount to $30,000. On June 1, 2007, the agreements were amended to increase the rate of interest from 4.75% to the prime rate of interest, as reported in the Wall Street Journal, plus 1.0% per annum. In addition, the default rate of interest was changed from 10.0% to the prime rate of interest, as reported in the Wall Street Journal, plus 6.0% per annum. On September 24, 2007, the agreements were amended to increase the maximum aggregate principal amount to $50,000. On June 20,
2008, the agreements were amended to increase the maximum aggregate principal amount to $100,000. On March 5, 2010, the agreements were amended to increase the maximum aggregate principal amount to $200,000. This maximum principal amount may be further amended from time to time. Interest on outstanding loans is calculated based on actual days outstanding and a 360 day year. Outstanding principal and accrued interest is to be repaid in full upon the earlier of the completion of a merger or December 31, 2013. At December 31, 2010, the balance outstanding under these agreements is $111,510 plus accrued interest of $13,044.





F-8


RFG ACQUISITION II INC.


(A Development Stage Company)


Notes to Financial Statements


December 31, 2010





NOTE 8 -           RELATED PARTY TRANSACTIONS:





The Company utilizes the office space and equipment of its management at no cost.





NOTE 9 -           RECENT ACCOUNTING PRONOUNCEMENTS:





Management does not believe that any recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying financial statements.





F-9




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





There are not and have not been any disagreements between the Company and its accountants on any matter of accounting principles, practices or financial statement disclosure.





Item 9A. Controls and Procedures.





Evaluation of Disclosure Controls and Procedures





The Company’s management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) that is designed to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive officer or officers
and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.





In accordance with Exchange Act Rules 13a-15 and 15d-15, an evaluation was completed under the supervision and with the participation of the Company’s management, including the Company’s President, Principal Financial Officer and Secretary, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of the end of the period covered by this Annual Report. Based on that evaluation, the Company’s management including the President, Principal Financial Officer and Secretary, concluded that the Company’s disclosure controls and procedures were effective in providing reasonable assurance that information required to be disclosed in the Company’s reports filed or submitted under the Exchange Act was recorded, processed, summarized, and
reported within the time periods specified in the Commission’s rules and forms.





Evaluation of Internal Controls and Procedures





Our management is also responsible for establishing and maintaining adequate internal control over financial reporting. The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.





Our internal control over financial reporting includes those policies and procedures that:





·
Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;




·
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of the Company’s management and sole director; and




·
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.





Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2010. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control over Financial Reporting – Guidance for Smaller Public Companies. Based on our assessment of those criteria, management believes that the Company maintained effective internal control over financial reporting as of December 31, 2010.





12


This annual report does not include an attestation report of our registered public accounting firm regarding our internal controls over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to Section 404(c) of the Sarbanes-Oxley Act that permits us to provide only management’s report in this annual report.





Changes in Internal Controls over Financial Reporting





There have been no significant changes to the Company’s internal controls over financial reporting that occurred during our last fiscal quarter of the year ended December 31, 2010, that materially affected, or were reasonably likely to materially affect, our internal controls over financial reporting.





Item 9B. Other Information.





None.





PART III





Item 10. Directors, Executive Officers, Promoters and Control Persons; Compliance With Section 16(a) of the Exchange Act.





(a) Identification of Directors and Executive Officers. The following table sets forth certain information regarding the Company’s sole director and executive officers:





Name

Age

PositionRichard F. Beston, Jr.

47

President and DirectorJohn W. Branch

53

SecretaryDavid W. Matre

45

Chief Financial Officer





The Company’s officers and sole director are elected annually for a one year term or until their respective successors are duly elected and qualifiedor until their earlier resignation or removal.





Richard F. Beston, Jr., the Company’s President and sole director, has served in this capacity since the inception of the Company during August 2006. Mr. Beston has worked in the U.S. capital markets for over 15 years with top securities firms in New York and Chicago. He has served in senior leadership roles in Management, Investment Banking and Institutional Sales/Trading. His career has focused on the areas of Emerging Markets, Derivatives, Venture Capital and Private Equity investing. Since April 2005, Mr. Beston has served as Chairman and Chief Executive Officer of RainMaker Financial Group Inc. and affiliated companies including RainMaker Securities LLC, a NASD/SIPC member broker/dealer, RM Advisors LLC, a registered Investment Advisor, and the
Ten X Capital Partners Companies, a series of private equity funds, which he founded in 2004. Since October 2003, Mr. Beston has also served as the President of Ten X Holdings LLC. From July 2002 to September 2003, Mr. Beston was a Senior Vice President with Friedman, Billings, Ramsey Inc., where he founded and managed the firm’s Chicago office. From October 2000 to July 2002, Mr. Beston was a Partner with Advanced Equities Inc. in Chicago, where he specialized in raising capital for emerging private companies backed by top-tier national venture capital firms. From November 1994 to July 1999, Mr. Beston was a Senior Vice President at Societe Generale Group in New York, where he specialized in emerging market debt, derivatives, and structured product, while managing 25 of the firm’s largest and most demanding buy-side account relationships. Mr. Beston also serves as the President and sole director of RFG Acquisition II Inc., a blank check, non-trading and publicly
reporting shell company. Mr. Beston received his Masters degree in International Management from the American Graduate School of International Management (Thunderbird) in 1988, and his Bachelors degree from the University of Iowa in 1985. He is a member of the Turnaround Management Association, and holds multiple securities licenses (7, 63, 65, and 24).





13


John W. Branch, the Company’s Secretary, has served in this capacity since the inception of the Company during August 2006. Since August 2004, Mr. Branch has served as the Vice President and General Counsel of Ten X Holdings, a consulting and business holdings entity. He also serves as the Vice President and General Counsel of Ten X Capital Partners Companies, a series of private equity funds and as the Vice President of RainMaker Securities LLC, a NASD/SIPC member broker/dealer. In addition, he is the Chief Operating Officer of RainMaker Financial Group Inc. and the Vice President and General Counsel of RM Advisors LLC, entities where he provides legal counsel and business analysis. From October 2002 until July 2004, Mr. Branch was in private law
practice. Prior to holding these positions, from October 2000 to September 2002, Mr. Branch served as the Chief Financial Officer of Gold Coast Water Company, LLC and the Chief Financial Officer of Atlantic Beverage Company, LLC. Mr. Branch brings over 20 years of experience as a Certified Public Accountant and over 15 years as an attorney at law. He has significant experience in business start-ups, turnarounds, taxation, securities offerings, business transactional law and litigation. Mr. Branch also serves as the Secretary of RFG Acquisition II Inc., a blank check, non-trading and publicly reporting shell company. Mr. Branch received his Juris Doctorate from Western State University College of Law and has earned a Bachelor of Science degree from the University of Redlands with a major in Accounting.





David W. Matre, the Company’s Chief Financial Officer, has served in this capacity since the inception of the Company during August 2006. Since February 2006, Mr. Matre has served as the Chief Financial Officer of Ten X Capital Partners Companies, a series of private equity funds. From June 2001 to February 2006, Mr. Matre was the Vice President and Treasurer of Midas, Inc., a NYSE listed franchisor of auto repair facilities. From October 1999 to March 2001, Mr. Matre was the Chief Financial Officer of Closerlook, Inc., a professional services firm. Prior to 1999, Mr. Matre held various senior financial positions in early stage, pre-IPO and publicly traded high growth companies. His background includes a demonstrated track record in strategic planning,
mergers & acquisitions, financial reporting and domestic and international banking. He has managed numerous capital markets transactions and is a proven leader in financial analysis, cash management and actively managing multiple project/companies simultaneously in a portfolio approach. Mr. Matre also serves as the Chief Financial Officer of RFG Acquisition II Inc., a blank check, non-trading and publicly reporting shell company. Mr. Matre earned a Master of Business Administration degree from DePaul University and a Bachelor of Science degree in Business Administration from the University of Wisconsin-Stevens Point.





(b) Significant Employees.





As of the date hereof, the Company has no significant employees.




(c) Family Relationships.





There are no family relationships among directors, executive officers, or persons nominated or chosen by the issuer to become directors or executive officers.




(d) Involvement in Certain Legal Proceedings.




There have been no events under any bankruptcy act, no criminal proceedings and no judgments, injunctions, orders or decrees material to the evaluation of the ability and integrity of any director, executive officer, promoter or control person of Registrant during the past ten years.




Compliance with Section 16(a) of the Exchange Act





Section 16(a) of the Exchange Act requires the Company’s directors and officers, and persons who beneficially own more than 10% of a registered class of the Company’s equity securities, to file reports of beneficial ownership and changes in beneficial ownership of the Company’s securities with the SEC on Forms 3, 4 and 5. Officers, directors and greater than 10% stockholders are required by SEC regulation to furnish the Company with copies of all Section 16(a) forms they file.





14


Based solely on the Company’s review of the copies of the forms received by it during the fiscal year ended December 31, 2010 and written representations that no other reports were required, the Company believes that no persons who, at any time during such fiscal year, was a director, officer or beneficial owner of more than 10% of Common Stock failed to comply with all Section 16(a) filing requirements during such fiscal year.




Code of Ethics




On December 31, 2007, Company adopted a formal code of ethics statement for senior officers and director (the “Code of Ethics”) that is designed to deter wrongdoing and to promote ethical conduct and full, fair, accurate, timely and understandable reports that the Company files or submits to the Securities and Exchange Commission and others. A form of the Code of Ethics has been filed as an exhibit to the Company’s annual report on Form 10-KSB filed with the Securities and Exchange Commission on March 5, 2008. Requests for copies of the Code of Ethics should be sent in writing to RFG Acquisition I Inc., Attention: President, c/o RainMaker Financial Group Inc., 650 Warrenville Road, Suite 103, Lisle, Illinois 60532.





Nominating Committee





We have not adopted any procedures by which security holders may recommend nominees to our Board of Directors.





Audit Committee





The Board of Directors acts as the audit committee. The Company does not have a qualified financial expert at this time because it has not been able to hire a qualified candidate. Further, the Company believes that it has inadequate financial resources at this time to hire such an expert. The Company intends to continue to search for a qualified individual for hire.





Item 11. Executive Compensation.





The following table sets forth the cash and other compensation paid by the Company to its President and all other executive officers during the fiscal year ended December 31, 2009, 2010 and through the date of this filing.





Name and Position

Year

Salary

Bonus

Option

Awards

All Other

Compensation

TotalRichard F. Beston, Jr., President and Director

2010

2009

None

None

None

None

None

None

None

None

None

NoneJohn W. Branch,

Secretary

2010

2009

None

None

None

None

None

None

None

None

None

NoneDavid W. Matre,

Chief Financial Officer

2010

2009

None

None

None

None

None

None

None

None

None

None




15




The following compensation discussion addresses all compensation awarded to, earned by, or paid to the Company’s officers and sole director. The Company’s officers and sole director have not received any cash or other compensation since inception. They will not receive any compensation until the consummation of an acquisition. No compensation of any nature has been paid for on account of services rendered by a director in such capacity. Our officers and sole director intend to devote very limited time to our affairs.





It is possible that, after the Company successfully consummates a business combination with an unaffiliated entity, that entity may desire to employ or retain our management for the purposes of providing services to the surviving entity.





No retirement, pension, profit sharing, stock option or insurance programs or other similar programs have been adopted by the Company for the benefit of its employees.





There are no understandings or agreements regarding compensation our management will receive after a business combination.





Compensation Committee and Insider Participation





The Company does not have a standing compensation committee or a committee performing similar functions, since the Board of Directors has determined not to compensate the officers and directors until such time that the Company completes a reverse merger or business combination.





Compensation Committee Report





The Company does not have a standing compensation committee or a committee performing similar functions; therefore, it does not have a compensation committee report.





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





(a)           The following tables set forth certain information as of March 22, 2011, regarding (i) each person known by the Company to be the beneficial owner of more than 5% of the outstanding shares of Common Stock, (ii) each director, nominee and executive officer of the Company and (iii) all officers and directors as a group.




Name and Address

Amount and Nature of Beneficial Ownership


Percentage of ClassRichard F. Beston, Jr. (1)

c/o RainMaker Financial Group Inc.

650 Warrenville Road, Suite 103

Lisle, IL 60532


1,250,000



50
%John W. Branch (2)

c/o RainMaker Financial Group Inc.

650 Warrenville Road, Suite 103

Lisle, IL 60532


1,250,000



50
%David W. Matre (3)

650 Warrenville Road

Suite 103

Lisle, IL 60532


0



0
%All Directors and Officers as a Group

(3 individuals)


2,500,000



100
%





(1)
Richard F. Beston, Jr. is President and Director of the Company.




(2)
John W. Branch is Secretary of the Company.




(3)
David W. Matre is Chief Financial Officer of the Company.





16


(b)           The Company currently has not authorized any compensation plans or individual compensation arrangements.





Item 13. Certain Relationships and Related Transactions.





On November 20, 2006, the Company entered into a line of credit agreement with each of its two stockholders (the “Loan Agreements”). The Loan Agreements each provide the Company with a revolving credit line up to a maximum of $6,255, for an aggregate credit line of $12,510 (the “Credit Line”). The Credit Line may be increased or amended from time to time. The outstanding amount due under the Credit Line will accrue interest at a rate of 4.75% per annum and will be calculated based on actual days outstanding and a 360-day year. Outstanding principal and accrued interest shall be repaid in full upon the earlier of the completion of a merger or December 31, 2010. On February 26, 2007, the Loan Agreements were amended to increase the Credit Line
to an aggregate of $30,000. The Loan Agreements were further amended on June 1, 2007 to increase the interest rate charged on outstanding loan borrowings from 4.75% per annum to the Prime Rate of Interest, as listed in the Wall Street Journal, plus 1% per annum. In addition, the default rate of interest was changed from 10.0% to the prime rate of interest, as reported in the Wall Street Journal, plus 6.0% per annum. On September 24, 2007, the Loan Agreements were amended to further increase the Credit Line to an aggregate of $50,000. On June 20, 2008, the agreements were amended to increase the maximum aggregate principal amount to $100,000. On March 5, 2010 the Loan Agreements were amended to increase the maximum aggregate principal amount to $200,000. This maximum principal amount may be further amended from time to time. Interest on outstanding loans is calculated based on actual days outstanding and a 360 day year. Outstanding principal and accrued interest is to be
repaid in full upon the earlier of the completion of a merger or December 31, 2013. At December 31, 2010, the balance outstanding under these agreements is $111,510 plus accrued interest of $13,044.





The Company utilizes the office space and equipment of its management at no cost. Management estimates such amounts to be immaterial.





Except as otherwise indicated herein, there have been no related party transactions, or any other transactions or relationships required to be disclosed pursuant to Item 404 of Regulation S-K.





Director Independence





The Company is not a listed issuer whose securities are listed on a national securities exchange, or an inter-dealer quotation system which has requirements that a majority of the board of directors be independent. Under NASDAQ Rule 5605(a)(2)(A), a director is not considered to be independent if he or she also is an executive officer or employee of the corporation. Under such definition, Richard F. Beston, our sole director would not be considered independent as he is also an executive officer of the Company.





Item 14. Principal Accounting Fees and Services





Raich Ende Malter & Company LLP (“Raich Ende”) is the Company’s independent registered public accounting firm.





17


Audit Fees





The aggregate fees billed by Raich Ende for professional services rendered for the audit of our annual financial statements and review of financial statements included in our quarterly reports on Form 10-Q or services that are normally provided in connection with statutory and regulatory filings were $15,500for the fiscal year ended December 31, 2010 and $15,500for the fiscal year ended December 31, 2009.





Audit-Related Fees





There were no feesbilled by Raich Ende for assurance and related services that are reasonably related to the performance of the audit or review of the Company’s financial statements for the fiscal year ended December 31, 2010 and for the period ended December 31, 2009.





Tax Fees





The aggregate fees billed by Raich Ende for professional services for tax compliance, tax advice, and tax planning were $500 for the fiscal year ended December 31, 2010 and$500 for the period ended December 31, 2009.





All Other Fees





There were no fees billed by Raich Ende for other products and services for the fiscal year ended December 31, 2010 andfor the period ended December 31, 2009.





Audit Committee’s Pre-Approval Process





The Board of Directors acts as the audit committee of the Company, and accordingly, all services are approved by all the members of the Board of Directors.





Part IV





Item 15. Exhibits, Financial Statement Schedules





(a) We set forth below a list of our audited financial statements included in Item 8 of this annual report on Form 10-K.





Statement

Page*Index to Financial Statements


F-1Report of Independent Registered Public Accounting Firm


F-2Balance Sheets


F-3Statements of Operations


F-4Statement of Changes in Stockholder’s Equity (Deficit)


F-5Statements of Cash Flows


F-6Notes to Financial Statements


F-7








*Page F-1 follows page 11 to this annual report on Form 10-K.





18





(b) Index to Exhibits required by Item 601 of Regulation S-K.





Exhibit

Description*3.1

Certificate of Incorporation*3.2

By-laws31.1

Certification of the Company’s Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, with respect to the registrant’s Annual Report on Form 10-K for the year ended December 31, 201031.2

Certification of the Company’s Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, with respect to the registrant’s Annual Report on Form 10-K for the year ended December 31, 201032.1

Certification of the Company’s Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 200232.2

Certification of the Company’s Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002





*
Filed as an exhibit to the Company’s registration statement on Form 10-SB, as filed with the Securities and Exchange Commission on November 22, 2006 and incorporated herein by this reference.




19





SIGNATURES





In accordance with 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.




RFG ACQUISITION II INC.Dated: March 22, 2011
By:
/s/ Richard F. Beston, Jr.Richard F. Beston, Jr.President and DirectorPrincipal Executive Officer


Dated: March 22, 2011
By:
/s/ John W. BranchJohn W. BranchSecretary


Dated: March 22, 2011
By:
/s/ David W. MatreDavid W. MatreChief Financial OfficerPrincipal Financial Officer





In accordance with Section 13 or 15(d) 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 dates indicated.




Title

Date/s/ Richard F. Beston, Jr.

President and Sole Director

March 22, 2011Richard F. Beston, Jr.





20