UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549


FORM
10-K





x  ANNUAL
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934





For the
year ended December 31, 2009





 ̈  TRANSITION
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934





For the
transition period from __________ to __________





APOLLO CAPITAL GROUP,
INC.


(Exact
name of registrant as specified in its charter)




FLORIDA
                  
                  001-34296
                  
                  22-3962092(State
      or other jurisdiction of incorporation)
                  
                  (Commission
      File Number)
                  
                  (IRS
      Employer Identification
No.)


20900
N.E. 30thAvenue,
8th
Floor


Aventura,
FL 33180


(Address
of principal executive offices) (Zip Code)





(786)
871-4858


(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, par value $.001





Indicate
by check mark whether if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act:


 ̈
Yes     x No





Check
whether the issuer has (1) filed all reports required to be filed by Section 13
of 15(d) of the Exchange Act during the past 12 months (or for such shorter
period the Company was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days.   ̈
Yes     xNo





Check if
there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of Company’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.  x





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


(Check
one):


 ̈ Large accelerated
filer      ̈ 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





State the
aggregate market value of the voting and non-voting common equity held by
non-affiliates computed by reference to the price at which the common equity was
last sold, or the average bid and asked price of such common equity, as of the
last business day of the registrant’s most recently completed second fiscal
quarter: $632,653.





Indicate
the number of shares outstanding of each of the registrant’s classes of common
stock, as of the latest practicable date 16,644,659 as of May 11,
2010.





DOCUMENTS
INCORPORATED BY REFERENCE


None





As
used throughout this report, unless the context otherwise requires the terms
“Apollo,” “we,” “us,” “the Company” and “our Company” refer to Apollo
Capital Group, Inc. and Alpha Music Mfg. Corp., its wholly-owned subsidiary,
which is in the process of being spun off.  See “Item 1.  Description of
Business.”




FORWARD-LOOKING
STATEMENTS




The
statements contained in this Annual Report on Form 10-K that are not historical
fact are forward-looking statements (as such term is defined in the Private
Securities Litigation Reform Act of 1995), within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended.  The forward-looking statements
contained herein are based on current expectations that involve a number of
risks and uncertainties.  These statements can be identified by the
use of forward-looking terminology such as “believes,” “expects,” “may,” “will,”
“should,” or “anticipates,” or the negative thereof or other variations thereon
or comparable terminology, or by discussions of strategy that involve risks and
uncertainties.  The Company wishes to caution the reader that its
forward-looking statements that are historical facts are only
predictions.  No assurances can be given that the future results
indicated, whether expressed or implied, will be achieved.  While
sometimes presented with numerical specificity, these projections and other
forward-looking statements are based upon a variety of assumptions relating to
the business of the Company, which, although considered reasonable by the
Company, may not be realized.  Because of the number and range of
assumptions underlying the Company’s projections and forward-looking statements,
many of which are subject to significant uncertainties and contingencies that
are beyond the reasonable control of the Company, some of the assumptions
inevitably will not materialize, and unanticipated events and circumstances may
occur subsequent to the date of this report.  These forward-looking
statements are based on current expectations and the Company assumes no
obligation to update this information.  Therefore, the actual
experience of the Company and the results achieved during the period covered by
any particular projections or forward-looking statements may differ
substantially from those projected.  Consequently, the inclusion of
projections and other forward-looking statements should not be regarded as a
representation by the Company or any other person that these estimates and
projections will be realized.  The Company’s actual results may vary
materially.  There can be no assurance that any of these expectations
will be realized or that any of the forward-looking statements contained herein
will prove to be accurate.




PART
I




Item
1.  Description of Business.




Over the
next twelve (12) months, Apollo intends to become a fully operating company
engaged in mining exploration and reforestation.




Apollo
was incorporated in the state of Florida on April 12, 2007 under the name “Pop Starz Publishing Corp.” as
a wholly-owned subsidiary of Pop Starz Records , Inc. (“PSR”) and on June 24, 2008
changed its name to “Apollo
Entertainment Group, Inc.” in connection with its spin-off to
shareholders of PSR.




Apollo’s
initial business, which was concluded through its wholly-owned subsidiary, Alpha
Music Mfg. Corp. (“Alpha”) was the pressing of
vinyl records, CD/CD Rom duplication and DVD duplication.




On
October 19, 2009, pursuant to a Stock Purchase and Sale Agreement dated October
1, 2009, Mr. Manfred H. Wutzer acquired 15,950,237 shares (or approximately
95.8%) of the Company’s outstanding common stock from Mrs. Michelle Tucker, the
Company’s then President, Chief Executive Officer, sole director and principal
shareholder (the “Change in
Control Transaction”).  Upon consummation of the Change in
Control Transaction,







Ms.
Tucker resigned from her positions with the Company and the following persons
were appointed to the offices set forth beside their respective
names:




Name
                
                PositionsGuenter
      Bauer
                
                Chairman
      of the Board and DirectorAnthony
      J. Finn
                
                Chief
      Executive OfficerSigfried
      M. Klein
                
                PresidentJoerg
      W. Linder
                
                Secretary-Treasurer





Mr.
Linder resigned from his positions in February 2010 for personal
reasons.  See “Item
10.  Directors, Officers and Corporate Governance” for
biographical information on Messrs. Bauer, Finn and Klein.




Mr.
Wutzer, as the Company’s new majority shareholder, and new management elected to
redirect the Company’s business activities into the fields of mining exploration
and reforestation as they believed they afforded Apollo and its shareholders
greater long-term growth potential.  Accordingly, in connection with
the Change in Control Transaction, Apollo agreed to distribute the shares of
Alpha, its wholly owned subsidiary, to Apollo’s shareholders of record
immediately prior to the Change in Control Transaction.  A
registration statement to effect such spin-off has been filed with the
Securities and Exchange Commission (the “SEC”), but has not yet been
declared effective.




Since
completion of the Change in Control Transaction, we have focused our efforts on
expanding our Company’s management, identifying potential properties for mining
exploration and reforestation and seeking funding for Apollo’s transition into a
fully operating company engaged in mining exploration and
reforestation.  On December 10, 2009, we changed our name to “Apollo Capital Group, Inc.” to
better reflect our intended business plan.




In March
2010, we expanded our board of directors and management with the addition of
Humberto Medeiros de Moraes as Vice President, Ramon Cachafeiro Troitiño as
Secretary-Treasurer and João Borges Andrade, Thorsten Barth and Ciaran Sheamus
Kelly as directors.  See “Item 10.  Directors,
Officers and Corporate Governance” for biographical information on such
individuals.




The
Company is currently exploring various options for financing its transition into
an operating company engaging in mining exploration and reforestation, including
private placements of our common stock in exchange for the contribution to the
Company of securities and other assets.  We have not entered into any
agreements with respect to any such transaction and there can be no assurance
that we can do so.




We have
also identified and are exploring and evaluating the acquisition of various land
parcels or interests on which we plan to conduct our mining exploration and
reforestation activities.  We have not entered into any agreements in
this regard and there can be no assurance that we can do so, or in any case,
effectively transition into an operating company.




Item
1A.  Risk Factors.




Not
applicable.




Item
1B.  Unresolved Staff Comments.




Not
applicable.




Item
2.  Description of Property.




Our
offices are located in an executive center at 20900 N.E. 30th Avenue,
8th
Floor, in Aventura, Florida 33180.  We utilize such space pursuant to
a month to month agreement at a monthly cost of approximately $215.00, which
includes telephone and fax lines and related support services.




2


Alpha
currently conducts its business operations in Plantation, Florida where it
leases a 5,000 square foot warehouse facility.  Alpha pays a monthly
rent of $2,961.33 pursuant to the terms and conditions of a three year lease,
which commenced on August 1, 2008 and which includes an option for three
additional years at an annual increase of 5% per annum.




Item
3.  Legal Proceedings.




None.




Item
4.  Removed and Reserved.




PART
II




Item
5.  Market for Common Equity and Related Stockholder
Matters.




Market
for Common Stock




Our
common stock has been quoted on the OTC Bulletin Board since June 24, 2009,
originally under the symbol “APEN” and since March 30, 2010 under the symbol
“APLI.”  The trading in our common stock is extremely limited and
sporadic.  The following table sets forth for the periods indicated,
the high and low prices for our common stock as reported by the OTC Bulletin
Board.  The prices represent inter-dealer quotations without retail
mark-up, mark-down or commissions and may not represent actual
transactions.




Quarter Ended
                      
                      High
                      
                      
                      LowMarch
      31, 2010
                      
                      $
                      .60
                      
                      
                      $
                      .60December
      31, 2009
                      
                      $
                      .60
                      
                      
                      $
                      .60


We may
also seek to list our common stock for trade on various European stock
exchanges, such as the Frankfurt and Berlin stock exchanges.  There
can be no assurance that we can do so or that if we do so, that a regular and
sustained trading market for our common stock will develop on those
exchanges.




Holders




As of May
11, 2010, there were seventy (70) holders of record of our common
stock.




Dividends




We have
not declared any cash dividends on its common stock since our Company’s
inception and do not anticipate doing so in the foreseeable future.




Securities
Authorized for Issuance Under Equity Compensation Plans




We have
not established any equity compensation plan.  Prior to consummation
of the Change in Control Transactions, we were party to agreements with four
individuals whereby they received shares of our common stock pursuant to their
employment and directors agreements.  During the year ended December
31, 2009, no shares of common stock were issued to such
individuals.




Recent
Sales of Unregistered Securities




None.




Item
6.  Selected Financial Data.




Not
applicable.




3




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




Forward
Looking Statements




The
statements contained herein that are not historical facts are forward-looking
statements within the meaning of the Private Securities Litigation Reform
Act.  Forward-looking statements are made based upon management’s
current expectations and beliefs concerning future developments and their
potential effects upon the Company.  There can be no assurance that
future developments affecting the Company will be those anticipated by
management.  Actual results may differ materially from those included
in the forward-looking statements.  You should not assume that the
information contained in this report is accurate as of any date other than the
date of this report.  Changes to the information contained in this
report may occur after that date and the Company does not undertake any
obligation to update the information unless required to do so by
law.




General




At
present we are transitioning into an operating company which plans to engage in
mining exploration and reforestation.  To date, our only revenues have
been generated by Alpha.  We are in the process of spinning off Alpha
to our former shareholders of record at the time of the Change in Control
Transaction.




Results
of Operations




Year
ended December 31, 2009 as compared to the year ended December 31,
2008.




Sales for
the year ended December 31, 2009 were $112,419 as compared to $69,761 for the
year ended December 31, 2008.  Almost all of the sales were
attributable to production of vinyl records by Alpha.




Cost of
sales for Alpha for the years ended December 31, 2009 and 2008 were $74,056 and
$58,261, respectively, with gross profits of Alpha of $38,363 and $11,655,
respectively.




General
and administrative expenses for the year ended December 31, 2009, were $251,643
($172,599 of which was attributable to Alpha) as compared to general and
administrative expenses of $98,017 for the year ended December 31, 2008 (all
attributable to Alpha).




Net loss
for the year ended December 31, 2009 was $213,899 ($144,017 of which was
attributable to Alpha), as compared to $88,591 for the year ended December 31,
2008 (all attributable to Alpha).




Net loss
per share for the year ended December 31, 2009 was ($0.01) based on 15,633,141
average shares outstanding.




Liquidity
and Capital Resources




Through
October 19, 2009, the date the Change in Control Transaction was consummated,
our Company relied on a note payable from an affiliate of its former President
and principal shareholder and other short term cash advances made to us by our
President and principal shareholder and/or her affiliates.  All such
advances were satisfied prior to consummation of the Change in Control
Transaction, as were any inter-company transactions from Alpha.




Subsequent
to consummation of the Change in Control Transaction, we have relied on a loan
in the amount of $100,000 made in February 2010 by Eurospaininvest, S.L., a
principal shareholder, and guaranteed by Manfred H. Wutzer, another principal
shareholder, to meet our capital needs.  The loan is due and payable
in February 2013, together with interest at the rate of five percent (5%) per
annum.  The loan may be repaid at any time.  There can be no
assurance that any of our principal shareholders or any members of management
and our board of directors or any of their respective affiliates will make any
future loans to meet our working capital needs.




4


In order
to transition into an operating company engaged in mining exploration and
reforestation, we will require and ability to continue as a gains concern is
dependent upon our security significant capital.  We are currently
exploring various options for raising the necessary capital, including without
limitation, private placements of our common stock in exchange for the
contribution to the Company of securities and other assets.  However,
we have not reached any definitive agreements to raise capital and there can be
no assurance given that we can successfully do so on favorable terms or
otherwise.  If we are unable to meet our capital needs, there is a
substantial likelihood that we may have to cease operations.




Off-Balance
Sheet Arrangements




We do not
have any off-balance sheet arrangements.




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




Not
applicable.




Item
8.  Financial Statements and Supplementary Data.




The
financial statements and schedules are included herewith commencing on page
F-1.




Consolidated
      Financial Statement for the year ended December 31,
2009Report
      of Independent Registered Public Accounting Firm
                  
                  F-1Consolidated
      Balance Sheet
                  
                  F-2Consolidated
      Statement of Operations
                  
                  F-3Consolidated
      Statement of Stockholders’ Deficit
                  
                  F-4Consolidated
      Statement of Cash Flows
                  
                  F-5Notes
      to Consolidated Financial Statements
                  
                  F-6Consolidated
      financial statements for the year ended December 31, 2008 and the period
      from the date of Inception (April 12, 2007) to December 31,
      2007Report
      of Independent Registered Public Accounting Firm
                  
                  F-13Consolidated
      Balance Sheets
                  
                  F-14Consolidated
      Statements of Operations
                  
                  F-15Consolidated
      Statements of Changes in Stockholders’ Equity (Deficit)
                  
                  F-16Consolidated
      Statements of Cash Flows
                  
                  F-17Notes
      to Consolidated Financial Statements
                  
                  F-18




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




(a)
            Termination of Stan J.H. Lee,
      CPA




On March
16, 2010, the Company terminated Stan J.H. Lee, CPA (“Lee”) as the Company’s
independent registered public accounting firm.  The decision to
terminate Lee was authorized and approved by the Company’s sole
director.




5


The
report of Lee on the financial statements of the Company for the years ended
December 31, 2008 and 2007 did not contain an adverse opinion or disclaimer of
opinion, nor was such report qualified or modified as to uncertainty, audit
scope or accounting principle, except that Lee’s report on the Company’s
financial statements for the years ended December 31, 2008 and 2007 contained an
explanatory paragraph indicating that substantial doubt exists about the
Company’s ability to continue as a going concern.




During
the years ended December 31, 2008 and 2007 and the subsequent interim period
through March 16, 2010, there were no disagreements with Lee on any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedure, which disagreements, if not resolved to the satisfaction of
Lee, would have caused Lee to make reference thereto in its reports on the
financial statements for such years.  In connection with the audits of
the years ended December 31, 2008 and 2007 and the subsequent interim period
through march 16, 2010, there have been no “reportable events” (as defined in
Item 304(a)(1)(v) of Regulations S-K).




(b)
            Engagement of DaszkalBolton
      LLP




On March
16, 2010, upon authorization and approval of the Company’s sole director, the
Company engaged DaszkalBolton LLP as the Company’s independent registered public
accounting firm.




During
the years ended December 31, 2008 and 2007 and the subsequent period through
March 16, 2010, neither the Company nor anyone acting on its behalf consulted
with DaszkalBolton regarding either (i) the application of accounting principles
to a specific transaction, either completed or proposed, or the type of audit
opinion that might be rendered on the Company’s financial statements or (ii) any
matter that was either the subject of a disagreement (as such term is defined in
Item 304(a)(1)(iv) of Regulation S-K), or a reportable event (as such term is
described in Item 304(a)(1)(v) of Regulation S-K).




Item
9A.  Disclosure Controls and Procedures.




Disclosure
Controls and Procedures




Under the
supervision and with the participation of our management, including our
principal executive officer and principal financial officer, we conducted an
evaluation of the effectiveness of the design and operation of our disclosure
controls and procedures, as defined in Rules 13a-15(e) under the Securities
Exchange Act of 1934, as amended, as of the end of the period covered by this
report (the “Evaluation
Date”).  Based on this evaluation, our principal executive
officer and principal financial officer concluded as of the Evaluation Date that
our disclosure controls and procedures were effective such that the information
relating to our Company, including our consolidated subsidiaries, required to be
disclosed in our SEC reports (i) is recorded, processed, summarized and reported
with the time periods specified in SEC rules and forms and (ii) is accumulated
and communicated to the Company’s management, including our principal executive
officer and principal financial officer, as appropriate, to allow timely
decisions regarding required disclosure.




Our
management, including our Chief Executive Officer and our Secretary-Treasurer,
does not expect that our disclosure controls and procedures or our internal
controls will prevent all error and all fraud.  A control system, no
matter how well conceived and operated, can provide only reasonable, not
absolute, assurance that the objectives of the control system are
met.  Further, the design of a control system must reflect the fact
that there are resource constraints and the benefits of controls must be
considered relative to their costs.  Due to the inherent limitations
in all control systems, no evaluation of controls can provide absolute assurance
that all control issues and instances of fraud, if any, within the Company have
been detected.




Management’s
Report on Internal Control Over Financial Reporting




Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting (as defined in Rule 13a-15(f) under the
Securities Exchange Act of 1934, as amended).  Our management assessed
the effectiveness of our internal control over financial reporting as of
December 31, 2009.  In making this assessment, our management used the
criteria set forth by the Committee of Sponsoring Organizations of the Treadway
Commission (“COSO”) in
Internal Control-Integrated
Framework.  Our management has concluded that, as of December
31, 2009, our internal control over financial reporting is effective based on
these criteria.




6


Changes
in Internal Control Over Financial Reporting




Our
management has also evaluated our internal controls over financial reporting,
and there have been no significant changes in our internal controls or in other
factors that could significantly affect those controls subsequent to the date of
their last evaluation.




Item
9B.  Other Information.




Not
applicable.


7


PART
III




Item
10.  Directors, Executive Officers and Corporate
Governance.




The name,
age and positions of our directors and executive officers are set forth
below.




Name
                    
                    Age
                    
                    PositionsGuenter
      Bauer
                    
                    66
                    
                    Chairman
      of the Board and DirectorAnthony
      J. Finn
                    
                    50
                    
                    Chief
      Executive OfficerSigfried
      M. Klein
                    
                    48
                    
                    PresidentHumberto
      Medeiros de Moraes
                    
                    66
                    
                    Vice
      PresidentRamon
      Cachafeiro Troitiño
                    
                    65
                    
                    Secretary-TreasurerJoão
      Borges Andrade
                    
                    66
                    
                    DirectorThorsten
      Barth
                    
                    39
                    
                    DirectorCiaran
      Sheamus Kelly
                    
                    45
                    
                    Director




Set forth
is a brief description of each of our directors and executive
officers.




Guenter Bauer became Chairman
of the Board and a director of our Company on October 19, 2009, upon
consummation of the Change in Control Transaction.  Since 2002, Mr.
Bauer has owned and operated Hippocampus Corporate Development, AG, a firm
specializing in the design, analysis and marketing of special investment
products principally investment funds.  Mr. Bauer is a graduate of the
University of St. Gall, Switzerland.  We believe that Mr. Bauer’s
experience in investment and finance makes him a valuable asset to our
Company.




Anthony J. Finn became Chief
Executive Officer of our Company on October 19, 2009, upon consummation of the
Change in Control Transaction.  Mr. Finn has been self employed as a
financial consultant to clients in the United Kingdom and Brazil for the last
ten (10) years.




Sigfried M. Klein became
President of our Company on October 19, 2009, upon consummation of the Change in
Control Transaction.  Mr. Klein holds a German Banking License issued
by the Chamber of Commerce & Industry in Darmstadt,
Germany.  Since 2004, Mr. Klein, who is based in Aventura, Florida,
has acted as a private investment advisor focused primarily on international
commercial real estate investment projects.




Humberto Madieros de Moraes
became Vice President of our Company on March 25, 2010.  Since 1989,
Mr. de Moraes has served as Chief Executive Officer of Capital Merchant Bank, a
Sao Paolo, Brazil-based merchant banking firm.




Ramon Cachafeiro Troitiño
became Secretary-Treasurer of our Company on March 25, 2010.  For at
least the past eight (8) years, Mr. Troitiño has been the Managing Director of
MAK, S.A., a Spanish-based investment advisory firm.  He has a
background as an economist.




João Borges Andrade became a
director of our Company on March 25, 2010.  Mr. Andrade has for the
past fifteen (15) years been the Managing Director of TLT Marketing, S.A., a
Lisbon, Portugal-based market research firm.  Mr. Andrade is an
economist with a specialization in market strategies.  We believe that
his experience in economics, investments and finance makes him a valuable asset
to our Company.




Thorsten Barth became a
director of our Company on March 25, 2010.  Mr. Barth has for the past
six (6) years been the Managing Director of Deweg Investments AG, a private
investment firm based in Zug, Switzerland.  His background is in
banking.  We believe that his experience in banking and investments
makes him a valuable asset to our Company.




Ciaran Sheamus Kelly became a
director of our Company on March 25, 2010.  Mr. Kelly has for the past
eight (8) years been the President of Moreline, Ltd., a London, England-based
computer leasing company.  We believe that his business experience
makes him a valuable asset to our Company.




8




Control
Person




Upon
consummation of the Change in Control Transaction, Mr. Manfred H. Wutzer
acquired 95.8% of our outstanding  common stock and therefore may be
deemed to be a “control
person.”  Mr. Wutzer, 60, is the owner of International
Investment & Commerce, S.A., a company involved in the design and marketing
of investment products.  A resident of Palma de Mallorca, Spain, Mr.
Wutzer was educated at the University of Cologne in Germany, where he received
both Bachelor of Arts and Master of Business Administration
degrees.




Involvement
in Legal Proceedings




Neither
our directors, executive officers nor our control person has been the subject of
any order, judgment, or decree of any court of competent jurisdiction, or any
regulatory agency permanently or temporarily enjoining, barring suspending or
otherwise limiting him from acting as an investment advisor, underwriter, broker
or dealer in the securities industry, or as an affiliated person, director or
employee of an investment company, bank, savings and loan association, or
insurance company, or from engaging in or continuing any conduct or practice in
connection with any such activity or in connection with the purchase or sale of
any securities.




Neither
our directors, executive officers nor our control person has been convicted in
any criminal proceeding (excluding traffic violations) or is the subject of a
criminal proceeding that is currently pending.




Neither
our directors, executive officers nor our control person are the subject of any
pending legal proceeding.




Family
Relationships




There are
no family relationships among our directors, executive officers and control
person.




Compensation
of Directors




Our
bylaws provide that, unless otherwise restricted by our certificate of
incorporation, our board of directors has the authority to fix the compensation
of directors.  The directors may be paid their expenses, if any,
related to attendance at each meeting of the board of directors and may be paid
a fixed sum for attendance at each meeting of the board of directors or a stated
salary as our director.  Our bylaws further provide that no such
payment will preclude any director from serving our Company in any other
capacity and receiving compensation therefore.  Further, members of
special or standing committees may be given compensation for attending committee
meetings.  At present, none of our directors receive compensation for
their services.




Terms
of Directors and Executive Officers




All of
our directors serve until the next annual meeting of shareholders and until
their successors are elected by shareholders and qualified, or until their
earlier death, retirement, resignation or removal.  Currently, our
board of directors consists of four (4) persons.  Our bylaws
authorized the board of directors to designate from among its members one or
more committees and alternate members thereof, as they deem desirable, each
consisting of one or more of the directors, with such powers and authority (to
the extent permitted by law and these bylaws) as may be provided in such
resolution.  We do not currently have any standing
committees.  Executive officers serve at the pleasure of the board of
directors.




Board
Committees and Independence




We
presently do not have any committees of the board of directors, but intend to
establish audit, compensation and nominating and corporate governance committees
as we transition into an operating company engaged in mining exploration and
reforestation. Our board of directors has determined that each of its current
members is “independent” within the meaning of the applicable rules and
regulations of the SEC.




9




Compensation
Consultants




Neither
our board of directors nor management of our Company has engaged outside
compensation consultants.




Governance
Structure




The
Company has chosen to separate the chief executive officer and chairman of the
board positions.  Further, all four (4) members of the Company’s board
of directors are independent.  We believe that this is the most
appropriate leadership structure for the Company.




Board
of Directors Role in Risk Oversight




The board
of directors has periodic meetings with management and the Company’s independent
auditors to perform risk oversight with respect to the Company’s internal
control processes.  The Company’s board of directors is comprised
entirely of independent directors.  The Company believes that the
board of director’s role in risk oversight does not materially affect the
leadership structure of the Company.




Code
of Ethics




We have
adopted a code of ethics that applies to all of our executive officers,
directors and employees.  The code of ethics codifies the business and
ethical principles that govern all aspects of our business.  This
document will be made available in print, free of charge, to any shareholder
requesting a copy in writing from our Secretary at our executive offices in
Aventura, Florida.




Section
16(a) Beneficial Ownership Reporting Compliance




Section
16(a) of the Securities Exchange Act of 1934, as amended, requires our
directors, executive officers and persons who own more than 10% of a registered
class of our equity securities to file reports of ownership of, and transactions
in, our equity securities with the SEC.  Such directors, executive
officers and 10% shareholders also are required to furnish us with copies of all
Section 16(a) reports they file.




Based on
a review of the copies of such reports and the written representations of such
reporting persons, we believe that all Section 16(a) filing requirements
applicable to our directors, executive officers and 10% shareholders were
complied with during the year ended December 31, 2009.




10


Item
11.  Executive Compensation.




Summary
Executive Compensation Table




The
following table sets forth certain information concerning the compensation paid
to our Chief Executive Officer and our other executive officers during the
periods described below.




Name and Principal
                            Position
                          
                          Year
                          
                          Salary
                          
                          
                          Stock
                            Awards
                          
                          
                          Opinion
                            Awards
                          
                          
                          All Other
                            Compensation
                          
                          
                          Total
                            CompensationAnthony
      J. Finn
                            Chief
      Executive Officer (1)
                          
                          2009
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -Sigfried
      M. Klein
                            President
      (1)
                          
                          2009
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -Joerg
      W. Linder
                            Secretary-Treasurer
      (2)
                          
                          2009
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -Michelle
      Tucker
                          
                          2009
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -Former
      President and COO (3)
                          
                          2008
                          
                          $
                          12,000
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          $
                          12,000





(1)
            Messrs.
      Finn and Klein assumed their positions on October 19, 2009 upon
      consummation of the Change in Control
  Transaction.




(2)
            Mr.
      Linder resigned from his positions on February
  2010.




(3)
            Ms.
      Tucker resigned as an executive officer and director of the Company
      effective October 19, 2009, upon consummation of the Change in Control
      Transaction.




Employment
Agreement




Effective
October 19, 2009, the Company entered into an “at will” employment agreement
with Sigfried M. Klein, which provides for a monthly salary of
$3,000.




We are
not party to an employment agreement with any of our other executive
officers.




Director
Compensation




Directors
of the Company are not compensated for the services as such, although the board
of directors reserves the right to implement a compensation plan for
non-employee directors in the future.




Outstanding
Equity Awards at Fiscal Year-End




None.


11


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




The
following table sets forth information with respect to the beneficial ownership
of our common stock as of May 11, 2010 for:




·
            each
      of our directors and executive
officers;




·
            all
      of our directors and executive officers as a group;
  and




·
            any
      other beneficial owner of more than five percent (5%) of our outstanding
      common stock.




Directors and Executive Officers (1)
                    
                    Shares Beneficially
                      Owned
                    
                    
                    PercentageGuenter
      Bauer
                    
                    
                    0
                    
                    
                    
                    0Anthony
      J. Finn
                    
                    
                    0
                    
                    
                    
                    0Sigfried
      M. Klein
                    
                    
                    0
                    
                    
                    
                    0Humberto
      Medeiros de Moraes
                    
                    
                    0
                    
                    
                    
                    0Ramon
      Cachafeiro Troitiño
                    
                    
                    0
                    
                    
                    
                    0João
      Borges Andrade
                    
                    
                    0
                    
                    
                    
                    0Thorsten
      Barth
                    
                    
                    0
                    
                    
                    
                    0Ciaran
      Sheamus Kelly
                    
                    
                    0
                    
                    
                    
                    0All
      directors and executive officers as a group
                      (8
      persons)
                    
                    
                    0
                    
                    
                    
                    05% or greater beneficial holders
      (1)
                    
                    
                    0
                    
                    
                    
                    0Manfred
      H. Wutzer
                    
                    
                    13,950,237
                    
                    
                    
                    83.8
                    %Eurospaininvest,
      P.L. (2)
                    
                    
                    2,000,000
                    
                    
                    
                    12.0
                    %





(1)
                    The
      address of each director, executive officer and 5% or greater beneficial
      owner is c/o the Company, 20900 N.E. 30th
      Avenue, 8th
      Floor, Aventura, FL
33180.




(2)
                Mr.
      Dieter Huhn is the majority owner and sole officer of Eurospaininvest,
      P.L.




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




Prior to
consummation of the Change in Control Transaction, the former principal
shareholder, certain former officers and their respective affiliates advanced
funds to Alpha and us for working capital purposes.  These funds
aggregated approximately $67,000.  On December 2, 2009, these advances
were converted into promissory notes issued by Alpha bearing interest at an
annual rate of eight percent (8%) per annum.  These notes are
convertible into shares of Alpha’s common stock at the rate of $0.01 per share
and mature on December 1, 2011.




Subsequent
to consummation of the Change in Control Transaction, we have relied on a loan
in the amount of $100,000 made n February 2010 by Eurospaininvest, S.L., a
principal shareholder and guaranteed by Manfred H. Wutzer, another principal
shareholder, to meet our capital needs.  The loan is due and payable
in February 2013, together with interest at the rate of five percent (5%) per
annum.  The loan may be repaid at any time.  There can be no
assurance that any of our principal shareholders or any members of management
and our board of directors or any of their respective affiliates will make any
future loans to meet our working capital needs.




In April
2010, Manfred H. Wutzer sold 2,000,000 shares of our common stock held by him to
Eurospaininvest, S.L., a private investment banking firm owned by Dieter Huhn,
for $200,000 in a private transaction.




12




Board
Independence




Our board
of directors has determined that each of its current members is “independent”
within the meaning of the applicable rules and regulations of the
SEC.




Conflicts
Relating to Directors and Executive Officers




To date,
we do not believe that there are any conflicts of interest involving our
directors or executive officers.




With
respect to transactions involving real or apparent conflicts of interest, we
have adopted policies and procedures which require that: (i) the fact of the
relationship or interest giving rise to the potential conflict be disclosed or
known to the directors who authorize or approve the transaction prior to such
authorization or approval, (ii) the transaction be approved by a majority of our
disinterested directors, and (iii) the transaction be fair and reasonable to us
at the time it is authorized or approved by our directors.




Item
14.  Principal Accounting Fees and Services.




Audit
Fees




The
aggregate fees billed by the independent auditors or accrued for the fiscal
years ended December 31, 2009 and 2008 for professional services for the audit
of the Company’s annual financial statements and the reviews included in the
Company’s Form 10-Q and services that are normally provided by the accountants
in connection with statutory and regulatory filings or engagements for those
years were $0 and $2,450, respectively.




Audit-Related
Fees




No fees
were billed in each of the years ended December 31, 2009 and 2008 for assurance
and related services by our independent auditors that are reasonably related to
the performance of the audit or review of the Company’s financial statements and
are not reported under Item 9(e)(1) of Schedule 14A.




Tax
Fees




No fees
were billed in each of the years ended December 31, 2009 and 2008 for
professional services rendered by our independent auditors for tax compliance,
tax advice, and tax planning.




All
Other Fees




During
the years ended December 31, 2009 and 2008 there were no other fees charged by
the independent auditors other than those disclosed above.




Audit
Oversight




The board
of directors as a whole, in its oversight of the Company’s accounting and
financial reporting processes and the audits of the Company’s financial
statements, including (i) the quality and integrity of the Company’s financial
statements, (ii) the Company’s compliance with legal and regulatory
requirements, (iii) the independent auditors’ qualifications and independence
and (iv) the performance of our Company’s internal audit functions and
independent auditors, as well as other matters which may come before it as
directed by the board of directors.  Further, the audit committee, to
the extent it deems necessary or appropriate, among its several other
responsibilities, shall:




·
            be
      responsible for the appointment, compensation, retention, termination and
      oversight of the work of any independent auditor engaged for the purpose
      of preparing or issuing an audit report or performing other audit, review
      or attest services for our Company;




13




·
            discuss
      the annual audited financial statements and the quarterly unaudited
      financial statements with management and the independent auditor prior to
      their filing with the SEC in our Annual Report on Form 10-K and Quarterly
      Reports on Form 10-Q;




·
            review
      with the Company’s financial management on a period basis (a) issues
      regarding accounting principles and financial statement presentations,
      including any significant changes in our Company’s selection or
      application of accounting principles, and (b) the effect of any regulatory
      and accounting initiatives, as well as off-balance sheet structures, on
      the financial statements of our
Company;




·
            monitor
      our Company’s policies for compliance with federal, state, local and
      foreign laws and regulations and our Company’s policies on corporate
      conduct;




·
            maintain
      open, continuing and direct communication between the board of directors
      and our independent auditors; and




·
            monitor
      our compliance with legal and regulatory requirements and shall have the
      authority to initiate any special investigations of conflicts of interest,
      and compliance with federal, state and local laws and
      regulations.




Policy
for Pre-Approval of Audit and Non-Audit Services




Our board
of directors’ policy is to pre-approve all audit services and all non-audit
services that our independent auditors are permitted to perform for us under
applicable federal securities regulations.  As permitted by the
applicable regulations, our board of directors’ policy utilizes a combination of
specific pre-approval on a case-by-case basis of individual engagements of the
independent auditors and general pre-approval of certain categories of
engagements up to predetermined dollar thresholds that are reviewed annually by
our board of directors.  Specific pre-approval is mandatory for the
annual financial statement audit engagement, among others.




PART
IV




Item
15.  Exhibits and Financial Statement Schedules.




(b)        Exhibits




Exhibit No.
                
                Description3(i).1
                
                Articles
      of Incorporation (1)3(i).2
                
                Amended
      Articles of Incorporation (1)3(i).3
                
                Second
      Amended Articles of Incorporation (1)3(i).4
                
                Third
      Amendment to Articles of Incorporation (2)3(ii).1
                
                By-laws
      (1)10.1
                
                Form
      of Stock Purchase and Sale Agreement (3)10.2
                
                Form
      of Employment Agreement with Sigfried M. Klein (3)21.1
                
                Subsidiaries
      of the Registrant (4)31.1
                
                Certification
      of the Chief Executive Officer pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002
(4)




14





31.2
              
              Certification
      of the Chief Financial Officer pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002 (4)32.1
              
              Certification
      of the Chief Executive Officer pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002 (4)32.2
              
              Certification
      of the Chief Financial Officer pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002
(4)





(1)
              Incorporated
      by reference to the Exhibit of the same number included in registrant’s
      Registration Statement on Form S-1 as filed with the SEC on September 15,
      2008.




(2)
              Incorporated
      by reference to the Exhibit included to the registrant’s Information
      Statement on Schedule 14C dated November 6,
  2009.




(3)
              Incorporated
      by reference to the Exhibit of the same number included in registrant’s
      Current Report on Form   8-K dated October 19,
      2009.




(4)
            Filed
      herewith.




15


SIGNATURES




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




May
      12, 2010
                By:
                /s/ Anthony J. FinnAnthony
      J. Finn
                  Chief
      Executive Officer
                  (principal
      executive officer)May
      12, 2010
                By:
                /s/ Ramon Cachafeiro
    TroitiñoRamon
      Cachafeiro Troitiño
                  Secretary-Treasurer(principal
      financial officer)May
      12, 2010
                By:
                /s/ Humberto Medeiros de
    MoraesHumberto
      Medeiros de Moraes
                  Chairman
      of the Board and DirectorMay
      12, 2010
                By:
                /s/ João Borges AndradeJoão
      Borges Andrade
                  DirectorMay
      12, 2010
                By:
                /s/ Thorsten BarthThorsten
      Barth
                  DirectorMay
      12, 2010
                By:
                /s/ Ciaran Sheamus KellyCiaran
      Sheamus Kelly
                  Director


16


Report
of Independent Registered Public Accounting Firm





To the
Board of Directors


Apollo
Capital Group, Inc.


Aventura,
Florida





We have
audited the accompanying consolidated balance sheet of Apollo Capital Group,
Inc. (the “Company”) as of December 31, 2009, and the related consolidated
statement of operations, statement of changes in stockholder’s equity, and
statement of cash flows for the year then ended. These combined consolidated
financial statements are the responsibility of the Company’s management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audit.





We
conducted our audit 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. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.





In our
opinion, the combined consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Apollo
Capital Group, Inc. as of December 31, 2009, and the results of their operations
and their cash flows for the year then ended 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 shown in the financial statements, the
Company incurred a net loss of $213,899 during the year ended December 31, 2009,
and, as of that date, had a working capital deficiency of $15,695 and an
accumulated deficit of $348,430 as described more fully in Notes 3 to the
financial statements. These factors raise substantial doubt about the Company’s
ability to continue as a going concern. Management’s plans in regard to these
matters are also described in Note 3. The financial statements do not include
any adjustments that might result from the outcome of this
uncertainty.





/s/
Daszkal Bolton LLP





Boca
Raton, FL


May 10,
2010




F-1





Apollo
Capital Group


Consolidated
Balance Sheet


December
31, 2009





ASSETSCurrent
      assets:Cash
      and cash equivalents
                                  
                                  $
                                  11,948Accounts
      receivable, net
                                  
                                  
                                  15,959Inventory
                                  
                                  
                                  3,561Total
      current assets
                                  
                                  
                                  31,468Equipment,
      net of accumulated depreciation
                                  
                                  
                                  9,048Due
      from related parties
                                  
                                  
                                  1,750Total
      assets
                                  
                                  $
                                  42,266LIABILITIES
      AND STOCKHOLDERS' DEFICITCurrent
      liabilities:Accounts
      payable
                                  
                                  $
                                  30,179Accrued
      liabilities
                                  
                                  
                                  9,835Accrued
      salaries
                                  
                                  
                                  7,149Total
      current liabilities
                                  
                                  
                                  47,163Convertible
      notes payable - related party
                                  
                                  
                                  67,442Total
      Liabilities
                                  
                                  
                                  114,605Stockholders'
      deficit:Common
      stock, $0.001 par value per share; 100,000,000 authorized16,644,659,
      and 13,110,150, issued and outstanding
                                  
                                  
                                  16,645Additional
      paid in capital
                                  
                                  
                                  259,446Accumulated
      deficit
                                  
                                  
                                  (348,430
                                  )Total
      stockholders' deficit
                                  
                                  
                                  (72,339
                                  )Total
      liabilities and stockholders' deficit
                                  
                                  $
                                  42,266


See
accompanying notes to the consolidated financial statements.




F-2


Apollo
Capital Group


Consolidated
Statement of Operations


For
the Year Ended December 31, 2009





Sales
                                  
                                  $
                                  112,419Cost
      of sales
                                  
                                  
                                  74,056Gross
      profit
                                  
                                  
                                  38,363General
      and administrative expenses
                                  
                                  
                                  251,643Operating
      loss
                                  
                                  
                                  (213,280
                                  )Other
      expense:Interest
      expense
                                  
                                  
                                  (619
                                  )Net
      loss
                                  
                                  $
                                  (213,899
                                  )Basic
      and diluted loss per common share
                                  
                                  $
                                  (0.01
                                  )Basic
      and diluted weighted average shares outstanding
                                  
                                  $
                                  15,633,141




See
accompanying notes to the consolidated financial statements.


F-3


Apollo
Capital Group


Consolidated
Statement of Stockholder’s Deficit


For
the Year Ended December 31, 2009





Common Stock
                                      
                                      
                                      
                                      
                                      
                                      AccumulatedShares
                                      
                                      
                                      Amount
                                      
                                      
                                      Paid in Capital
                                      
                                      
                                      Deficit
                                      
                                      
                                      TotalBalance,
      December 31, 2008 as previously stated
                                      
                                      
                                      13,110,150
                                      
                                      
                                      $
                                      13,110
                                      
                                      
                                      $
                                      64,130
                                      
                                      
                                      $
                                      (126,410
                                      )
                                      
                                      $
                                      (49,170
                                      )Restatement
      adjustment
                                      
                                      
                                      -
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      (8,121
                                      )
                                      
                                      
                                      (8,121
                                      )Balance,
      December 31, 2008 as restated
                                      
                                      
                                      13,110,150
                                      
                                      
                                      $
                                      13,110
                                      
                                      
                                      $
                                      64,130
                                      
                                      
                                      $
                                      (134,531
                                      )
                                      
                                      $
                                      (57,291
                                      )Issuance
      of common shares
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      -from
      settlement of liabilities
                                      
                                      
                                      3,534,509
                                      
                                      
                                      
                                      3,535
                                      
                                      
                                      
                                      67,155
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      70,690Forgiveness
      of liabilities from stockholders
                                      
                                      
                                      -
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      113,682
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      113,682Company
      expenses paid by stockholders
                                      
                                      
                                      -
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      14,479
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      14,479Net
      loss
                                      
                                      
                                      -
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      (213,899
                                      )
                                      
                                      
                                      (213,899
                                      )Balance,
      December 31, 2009
                                      
                                      
                                      16,644,659
                                      
                                      
                                      $
                                      16,645
                                      
                                      
                                      $
                                      259,446
                                      
                                      
                                      $
                                      (348,430
                                      )
                                      
                                      $
                                      (72,339
                                      )




See
accompanying notes to the consolidated financial statements.


F-4





Apollo
Capital Group


Consolidated
Statement of Cash Flows


For
the Year Ended December 31, 2009





Cash
      flows from operating activities:Net
      loss
                                    
                                    $
                                    (213,899
                                    )Adjustments
      to reconcile net loss to net cash used in
                                      operating
      activities:Depreciation
                                    
                                    
                                    3,532Allowance
      for bad debt
                                    
                                    
                                    3,326Expenses
      settled in shares
                                    
                                    
                                    70,690Expenses
      paid by stocholder's
                                    
                                    
                                    14,479(Increase)
      decrease in:Accounts
      receivable, net
                                    
                                    
                                    (11,034
                                    )Prepaid
      expenses
                                    
                                    
                                    1,000Inventory
                                    
                                    
                                    1,957Due
      from related party
                                    
                                    
                                    (1,750
                                    )Increase
      in:Accounts
      payable
                                    
                                    
                                    8,042Accrued
      liabilities
                                    
                                    
                                    2,567Accrued
      salaries
                                    
                                    
                                    7,149Due
      to related party
                                    
                                    
                                    55,563Net
      cash used in operating activities
                                    
                                    
                                    (58,378
                                    )Cash
      flows from investing activities:
                                    
                                    
                                    -Cash
      flows from financing activities:Advances
      from stockholders
                                    
                                    
                                    67,442Net
      cash provided by financing activities
                                    
                                    
                                    67,442Net
      increase in cash and cash equivalents
                                    
                                    
                                    9,064Cash
      and cash equivalents, beginning of year
                                    
                                    
                                    2,884Cash
      and cash equivalents, end of year
                                    
                                    $
                                    11,948Supplemental cash flow
      information:Cash
      paid for interest
                                    
                                    $
                                    -Income
      taxes paid
                                    
                                    $
                                    -
  See
accompanying notes to the consolidated financial statements.
  F-5


Apollo
Capital Group
 Notes
to the Consolidated Financial Statements





Note 1 – Nature of
Operations





Apollo
Capital Group, Inc.  (“The Company” or “Apollo”) f/k/a Apollo
Entertainment Group, Inc. was incorporated in the State of Florida on April 12,
2007 under the name Pop Starz Publishing Corp. as a wholly owned subsidiary of
Pop Starz Records, Inc. On June 24, 2008, the Company changed its name to Apollo
Entertainment Group, Inc. and on the same date, the authorized number of shares
was increased from 10,000 to 100,000,000 and the par value of the common stock
was changed from $ .01 to $.001.





On
September 15, 2008, the Company filed an S-1 registration with the Securities
and Exchange Commission registering 4,553,081 shares of Apollo’s Company stock.
These registered shares were distributed by Pop Starz Records, Inc. at which
time Pop Starz Records, Inc. ceased to be the Company’s parent. The registration
statement was declared effective on October 3, 2008.   Following
a stock sale agreement on October 19, 2009, the Company changed its name to
Apollo Capital Group, Inc. on December 10, 2009.





Apollo is
a holding corporation. All of its operations were conducted through its
subsidiary, Alpha Music Mfg. Corp. which is a Florida corporation, incorporated
on June 24, 2008. The Company, through its subsidiary, Alpha Music Mfg. Corp.
(”Alpha”), offers the services of audio CD/CD Rom duplication and replication,
DVD duplication, and vinyl record pressing throughout the United
States.





Pursuant
to the Stock Purchase and Sale Agreement (Note 5), the Company has filed a
registration statement on Form S-1 to register the shares of
Alpha.  Upon effectiveness of the registration statement, the Company
plans to distribute the Alpha shares to the Company shareholders of record at
October 18, 2009.





Note 2 –
Restatement





The
Company restated its financial statements as of and for the period ended
December 31, 2008.  The nature and extent of the $8,121 restatement
consisted of (i) an increase to the valuation allowance for doubtful accounts in
the amount of $3,826 and (ii) an accrual for payroll and utility expenses in the
amount of $4,295. Due to the additional allowance for doubtful accounts and
accrued liabilities, the Company increased general and administrative expenses,
net loss and accumulated deficit by $8,121.





Note 3 – Going
Concern





At
December 31, 2009, the Company has a working capital deficit in the amount of
$15,695 and has an accumulated deficit of $348,430.  The accompanying
financial statements have been prepared assuming that the Company will continue
as a going concern. The Company currently does not have sufficient working
capital for its planned activities, which raises substantial doubt about its
ability to continue as a going concern.





Continuation
of the company as a going concern is dependent upon obtaining additional working
capital. Management of the Company have developed a strategy, which it believes
will accomplish this objective, through cash flows from future operations,
short-term loans from its stockholders and additional equity investments, which
will enable the Company to continue operations for the coming year.




See
accompanying notes to the consolidated financial
statements.


F-6





Apollo
Capital Group


Notes
to the Consolidated Financial Statements


Note 4 – Summary of
Significant Accounting Policies





Accounting
Estimates


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





Cash and Cash
Equivalents


Cash
equivalents include short-term, highly liquid investments that are readily
convertible to known amounts of cash and are of an original maturity of three
months or less.





Fair Value of Financial
Instruments


The
carrying amount of cash and cash equivalents, accounts receivable, accounts
payable and accrued expenses approximate fair value due to short-term maturities
of these instruments.




Principles of
Consolidation




The
accompanying consolidated financial statements include the accounts of the
Company and its wholly owned subsidiary, Alpha Music Mfg. Corp.  All
significant inter-company balances and transactions have been eliminated upon
consolidation.





Concentration of Credit
Risk


Financial
instruments that potentially subject the Company to concentrations of credit
risk are cash and accounts receivable.





Cash


At
various times during the year, the Company may have deposits with financial
institutions in excess of the federally insured limits.  However, the
Company maintains its cash with high quality financial institutions, which the
Company believes limits these risks.





Accounts
Receivable


The
Company does business and extends credit based on an evaluation of the
customer’s financial condition, generally without requiring collateral. 
Exposure to losses on receivables is expected to vary by customer due to the
financial condition of each customer.  The Company obtains detailed credit
evaluations of customers and establishes credit limits as required.  The
Company monitors exposure to credit losses and maintains allowances for
anticipated losses considered necessary under the circumstances.





The
Company’s trade receivables reflect two major customers that represent
approximately 75% of its receivables at December 31, 2009 and these same two
customers accounted for approximately 38% of net sales for the year ended
December 31, 2009.  The Company does not currently foresee a credit risk
associated with these receivables. The Company’s operations are also
concentrated in Florida.





See
accompanying notes to the consolidated financial statements.


F-7


Apollo
Capital Group


Notes
to the Consolidated Financial Statements


Note 4 – Summary of
Significant Accounting Policies, continued





Accounts
Receivable


Accounts
receivables are carried at the amount billed to a customer, net of the allowance
for doubtful accounts.  The allowance for doubtful accounts is an estimate
for credit losses based on a review of all outstanding amounts on a periodic
basis.  Management determines the allowance for doubtful accounts by
regularly evaluating individual customer receivables and considering a
customer’s financial condition, credit history and current economic
conditions.  Accounts receivable are written off when deemed
un-collectible.  Recoveries of accounts receivable previously written off
are recorded when received.





Inventories


Inventories
are valued at the lower of cost or market, with cost determined on the first in,
first out (FIFO) method.  Inventories consist of supplies and finished
goods.  The Company performs periodic assessments to determine the
existence of expired, damaged or obsolete inventories and records necessary
provisions to reduce such inventories to net realizable value.





Property and
Equipment


Property
and equipment are stated at cost.  Depreciation and amortization are
computed using the straight-line and over the estimated useful lives of the
assets which range from 5-7 years.  Expenditures for major renewals and
improvements that extend the useful lives of property and equipment are
capitalized.  Expenditures for maintenance and repairs are charged to
expense as incurred.





Management
reviews property and equipment for impairment when circumstances indicate the
carrying amount of an asset may not be recoverable based on the undiscounted
future cash flows of the asset.  If the carrying amount of an asset may not
be recoverable, a write-off is recorded.  No impairments were recorded
during the year ended December 31, 2009.





Revenue
Recognition


Revenues
are recognized when the products are shipped.





Shipping and Handling
Costs


Shipping
and handling costs are included in prices charged to customers and are reflected
as part of income in reported revenues.





Advertising


Advertising
costs are charged to operations in the year incurred.    There were no
advertising expenses for the years ended December 31, 2009.





Compensated
Absences


Employees
of the Company are entitled to paid vacation, paid sick days, and personal days
off, depending on job classification, length of service, and other
factors.  It is impractical to estimate the amount of compensation for
future absences, and accordingly, no liability has been recorded in the
accompanying financial statements.  The Company’s policy is to recognize
the costs of compensated absences when actually paid to employees.





See
accompanying notes to the consolidated financial statements.


F-8


Apollo
Capital Group


Notes
to the Consolidated Financial Statements


Note 4 – Summary of
Significant Accounting Policies, continued





Income
Taxes





The
provision for income taxes is computed using the asset and liability method,
under which deferred tax assets and liabilities are recognized for the expected
future tax consequences of temporary differences between the financial reporting
and tax bases of assets and liabilities, and for operating losses and tax credit
carryforwards. Deferred tax assets and liabilities are measured using the
currently enacted tax rates that apply to taxable income in effect for the years
in which those tax assets are expected to be realized or settled. The Company
records a valuation allowance to reduce deferred tax assets to the amount that
is believed more likely than not to be realized.





The
Company accounts for income taxes under the provisions of FASB Accounting
Standards Codification (“ASC”) 740, Income Taxes(formerly
referenced as FASB Financial Interpretation No. 48, Accounting for Uncertainty in Income
Taxes – an   interpretation of FASB Statement No. 109),which
changed the framework for accounting for uncertainty in income taxes.The adoption of this
standard does not have an impact on the Company's results of operations or
financial position.





Income (Loss) Per
Share





Basic net
loss per common share is computed by dividing net loss applicable to common
shareholders by the weighted-average number of common shares outstanding during
the period.  Diluted net loss per common share is determined using the
weighted-average number of common shares outstanding during the period, adjusted
for the dilutive effect of common stock equivalents, consisting of shares that
might be issued upon exercise of common stock options and warrants. At December
31, 2009, the Company did not have any dilutive shares outstanding.





Recently Issued Accounting
Pronouncements





In June
2009, the FASB issued the FASB Accounting Standards Codification
(“Codification”) as the single source of authoritative U.S. generally accepted
accounting principles (“GAAP”) recognized by FASB to be applied by
non-governmental entities. Rules and interpretive releases of the Securities and
Exchange Commission (“SEC”) under authority of the federal securities laws are
also sources of authoritative GAAP for SEC registrants. The Codification is
effective for financial statements issued for interim and annual periods ending
after September 15, 2009. The Company adopted the Codification in the third
quarter of 2009, and the adoption did not have any impact on its results of
operations or financial position





Note 5 – Stock Purchase And
Sale Agreement





On
October 19, 2009, the Company entered into a Stock Purchase and Sale Agreement
between two outside, unrelated parties and the current stockholders of record
comprising approximately 96% of the outstanding shares of the Company.  As
a post closing obligation of the sale of the common stock of the Company, Apollo
agreed to distribute its holdings in the Alpha Music Mfg. Corp. to those
pre-closing stockholders of record at the close of business on (1) clearance day
by the Securities and Exchange Commission of Alpha's S-1 Registration Statement,
or (2) December 31, 2009, whichever is later (See Note 12). The company will
distribute the shares on the basis of one Alpha share for every one Apollo share
beneficially owned prior to the change in ownership.





See
accompanying notes to the consolidated financial statements.


F-9


Apollo
Capital Group


Notes
to the Consolidated Financial Statements


Note 5 – Stock Purchase And
Sale Agreement, Continued





Upon
closing, the sole officer and director of the Company resigned her position and
all contracts and agreements between the sellers and the Company were deemed
cancelled.  In addition, all financial obligations owed to Apollo by Alpha
Music Mfg. Corp. have be forgiven and cancelled.





Note 6 – Accounts
Receivable





Accounts
receivable consisted of the following at December 31, 2009:




Accounts
      receivable
                    
                    $
                    25,152Less
      allowance for doubtful accounts and warranties
                    
                    
                    (9,193
                    )15,959





Bad debt
expense for the years ended December 31, 2009 was $3,326.





Note 7 –
Equipment





Equipment
consisted of the following at December 31, 2009:




Office
      furniture and fixtures
                    
                    $
                    11,965Equipment
                    
                    
                    1,611Total
      Cost
                    
                    
                    13,576Accumulated
      depreciation
                    
                    
                    (4,528
                    )Net
      property and equipment
                    
                    $
                    9,048





Depreciation
expense for the years ended December 31, 2009 was $3,532.





Note 8 – Convertible Notes
Payable Related Party





The
stockholders and former officers of the Company have advanced funds to the
Company and its subsidiary for its operations. On December 2, 2009 these
advances were converted to subsidiary notes payable bearing an annual interest
of 8%. The notes are convertible into shares of subsidiary common stock at the
rate of $0.01 per share and mature on December 1, 2011.





See
accompanying notes to the consolidated financial statements.


F-10


Apollo
Capital Group


Notes
to the Consolidated Financial Statements


Note 9 –
Commitments





In 2008,
the Company entered into a three year lease agreement for an office and
warehouse space.  Monthly rental payments, including applicable use tax,
are $2,961.  In October 2009, the lease was amended to reduce monthly
rental payments to $2,200.  Rent expense included in general and
administrative expenses amounted to $34,013 as of December 31,
2009.





A summary
of estimated future minimum payments due December 31, under this lease are as
follows:




2011
                      
                      $
                      26,4002012
                      
                      
                      15,400Total
                      
                      $
                      41,800





On
October 20, 2009, the Company entered into an employment agreement with the new
president of the Company for a monthly salary of $3,000 per month for an
indefinite duration.  This agreement may be cancelled by either party given
fourteen days notice.  This compensation is subject to periodic review by
the board of directors and prospectively may also include vacation, bonus or
other benefits as deemed appropriate.





Note 10 – Income
Taxes





Deferred
tax assets and liabilities are determined based on the estimated future tax
effects of temporary differences between the financial statement and tax basis
of assets and liabilities, as measured by the current enacted tax rates.
Deferred tax expense (benefit) is the result of changes in the deferred tax
asset and liability.  The Company has recorded a valuation allowance that
fully offsets deferred tax assets arising from net operating loss carry-forwards
because the likelihood of the realization of the benefit may not be established.
The Internal Revenue Code contains provisions that may limit the net operating
loss carry-forwards available if significant changes in stockholder ownership of
the Company occur.





The
provision (benefit) for income taxes is comprised of the following:





Current
      taxes
                    
                    $
                    -Deferred
      tax benefit:Federal
      net operating loss carry-forward
                    
                    
                    97,434State
      net operating loss carry-forward
                    
                    
                    59,088Projected
      benefit obligation, end of year
                    
                    $
                    156,522Less
      valuation allowance
                    
                    
                    (156,522
                    )Total
      provision (benefit) for income taxes
                    
                    $
                    -





See
accompanying notes to the consolidated financial statements.


F-11


Apollo
Capital Group


Notes
to the Consolidated Financial Statements


Note 11 – Related Party
Transactions





In 2009,
the Tucker Family Spendthrift Trust advanced the Company $51,330. In February
2009 and June 2009, the Company issued shares totaling 1,319,475 shares as
repayment toward the advances. The Company also issued 625,000 shares to the
Tucker Family Spendthrift Trust for accrued rent and rent expense during the
year.





Note 12 – Subsequent
Events





Subsequent
to year end, the Company received a $100,000 loan from a principal
shareholder.  Interest on the loan accrues at five percent (5%) per annum,
with both principal and accrued interest due and payable in February
2013.





The Alpha
registration statement on Form S-1 has not been declared effective by the SEC as
of the date of this report.





See
accompanying notes to the consolidated financial statements.


F-12





Stan J.H.
Lee, CPA


2160
North Central Rd Suite 203, Fort Lee, NJ 07024


P.O. Box
436402, San Ysidro, CA 92143-9402


619-623-7799,
Fax 619-564-3408, stan2u@gmail.com




REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM




To the
Shareholders and Board Members of Apollo Entertainment Group, Inc.




We have
audited the accompanying balance sheet of Apollo Entertainment Group, Inc. as of
December 31, 2008 and the related statements of operation, changes in
stockholders' equity and cash flows for the year then ended.




These
financial statements are the responsibility of the company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.




We
conducted our audit 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. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for my opinion.




In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Apollo Entertainment Group, Inc. as
of December 31, 2008, and the results of its operations and its cash flows for
the year then ended in conformity with accounting principles generally accepted
in the United States of America.




The
accompanying financial statements have been prepared assuming the Company will
continue as a going concern. As discussed in Note 6 to the financial statements,
the Company is in the development stage, has suffered a loss, has a net capital
deficiency and has yet to generate an internal cash flow. These factors raise
substantial doubt about the Company's ability to continue as a going concern.
Management's plans in regard to these matters are also described in Note 6. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.





/s/
      Stan J.H. Lee, CPAStan
      J.H. Lee, CPAMarch
      9, 2009Fort
      Lee, New Jersey




REGISTERED
WITH THE PUBLIC COMPANY ACCOUNTING OVERSIGHT BOARD


MEMBER
OF NEW JERSEY SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS





See
accompanying notes to the consolidated financial statements.


F-13


APOLLO
ENTERTAINMENT GROUP, INC. AND SUBSIDIARY


CONSOLIDATED
BALANCE SHEETS





December 31,
                
                
                December 31,2008
                
                
                2007ASSETSCurrent
      Assets:Cash
                
                $
                2,884
                
                
                $
                -Accounts
      receivable
                
                
                12,077
                
                
                
                -Prepaid
      expenses
                
                
                1,000
                
                
                
                -Inventory
                
                
                5,518
                
                
                
                -Total
      Current Assets
                
                
                21,479
                
                
                
                -Equipment
                
                
                12,580
                
                
                
                -Total
      Assets
                
                $
                34,059
                
                
                $
                -




LIABILITIES
AND STOCKHOLDERS' EQUITY





Current
      Liabilities:Accounts
      payable
                
                $
                22,137
                
                
                $
                -Accrued
      liabilities
                
                
                1,251
                
                
                
                -Accrued
      wages
                
                
                1,722
                
                
                
                -Accrued
      liabilities-related party
                
                
                58,119
                
                
                
                -Total
      Current Liabilities
                
                
                83,229
                
                
                
                -Total
      Liabilities
                
                
                83,229
                
                
                
                -Stockholders'
      EquityCommon
      stock, $.001 par value 100,000,000 authorized 13,110,150 and 100,000
      issued and outstanding, respectively
                
                
                13,110
                
                
                
                100Additional
      Paid in Capital
                
                
                64,130
                
                
                
                139Accumulated
      deficit
                
                
                (126,410
                )
                
                
                (239
                )Total
      Stockholders' Equity
                
                
                (49,170
                )
                
                
                -Total
      Liabilities and Stockholders' Equity
                
                $
                34,059
                
                
                $
                -




The
Accompanying Notes are an Integral Part of the Financial Statements





See
accompanying notes to the consolidated financial statements.


F-14


APOLLO
ENTERTAINMENT GROUP, INC. AND SUBSIDIARY


CONSOLIDATED
STATEMENTS OF OPERATIONS





2008
                                
                                
                                2007Revenue
                                
                                $
                                69,761
                                
                                
                                $
                                -Cost
      of sales
                                
                                
                                58,106
                                
                                
                                
                                -Gross
      profit
                                
                                
                                11,655
                                
                                
                                
                                -General
      administrative expenses
                                
                                
                                136,706
                                
                                
                                
                                239Loss
      from operations
                                
                                
                                (125,051
                                )
                                
                                
                                (239
                                )Income
      tax expense
                                
                                
                                -
                                
                                
                                
                                -Interest
      expense
                                
                                
                                (1,120
                                )
                                
                                
                                -Net
      Loss
                                
                                $
                                (126,171
                                )
                                
                                $
                                (239
                                )Basic
      and DilutedLoss
      per Common Share
                                
                                $
                                (0.02
                                )
                                
                                $
                                -Basic
      and Diluted Weighted AverageCommon
      Shares Outstanding
                                
                                
                                6,223,413
                                
                                
                                
                                100,000




The
Accompanying Notes are an Integral Part of the Financial Statements





See
accompanying notes to the consolidated financial statements.


F-15





APOLLO
ENTERTAINMENT GROUP, INC. AND SUBSIDIARY


CONSOLIDATED
STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY





TotalCommon Stock
                
                
                Paid in
                
                
                Accumulated
                
                
                Stockholders'Shares
                
                
                Amount
                
                
                Capital
                
                
                Deficit
                
                
                EquityBalance,
      April 12, 2007, date of inception
                
                
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                -Proceeds
      from Founders shares
                
                
                100,000
                
                
                
                100
                
                
                
                139
                
                
                
                -
                
                
                
                239Net
      Loss
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (239
                )
                
                
                (239
                )Balance,
      Decemeber 31, 2007
                
                
                100,000
                
                
                
                100
                
                
                
                139
                
                
                
                (239
                )
                
                
                -Proceeds
      from Founders shares issued
                
                
                4,700,000
                
                
                
                4,700
                
                
                
                -
                
                
                
                -
                
                
                
                4,700Issuance
      of shares of common stock for prepaid expenses
                
                
                1,200,000
                
                
                
                1,200
                
                
                
                -
                
                
                
                -
                
                
                
                1,200Issuance
      of shares of common stock for repayment of advances and
    debt
                
                
                7,090,150
                
                
                
                7,090
                
                
                
                63,811
                
                
                
                -
                
                
                
                70,901Issuance
      of shares of common stock for services-related party
                
                
                20,000
                
                
                
                20
                
                
                
                180
                
                
                
                -
                
                
                
                200Net
      Loss
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (126,171
                )
                
                
                (126,171
                )Balace,
      December 31, 2008
                
                
                13,110,150
                
                
                $
                13,110
                
                
                $
                64,130
                
                
                $
                (126,410
                )
                
                $
                (49,170
                )





The
Accompanying Notes are an Integral Part of the Financial Statements





See
accompanying notes to the consolidated financial statements.


F-16





APOLLO
ENTERTAINMENT GROUP, INC. AND SUBSIDIARY


CONSOLIDATED
STATEMENTS OF CASH FLOWS





From the dateFor the year
                
                
                of Inceptionended
                
                
                April 12, 2007December 31,
                
                
                to December 31,2008
                
                
                2007OPERATING
      ACTIVITIESNet
      loss
                
                $
                (126,171
                )
                
                $
                (239
                )Adjustments
      to reconcile net income (loss) to net cash Provided (used) by operating
      activities:Depreciation
                
                
                996
                
                
                
                -Amortization
      of prepaid expenses
                
                
                400
                
                
                
                -Accured
      interest payable-related party
                
                
                1,117
                
                
                
                -Changes
      in Assets and Liabilities:Accounts
      receivable
                
                
                (12,077
                )
                
                
                -Inventory
                
                
                (5,518
                )
                
                
                -Accounts
      payable
                
                
                22,137
                
                
                
                -Accrued
      wages
                
                
                1,722
                
                
                
                -Accrued
      liabilities
                
                
                1,251
                
                
                
                -Accrued
      liabilities-related party
                
                
                82,603
                
                
                
                -Net
      Cash Used by Operating Activities
                
                
                (33,540
                )
                
                
                (239
                )FINANCING
      ACTIVITIESPurchase
      of equipment
                
                
                (13,576
                )
                
                
                -Net
      Cash Used in Investing Activities
                
                
                (13,576
                )
                
                
                -INVESTING
      ACTIVITIESProceeds
      from issuance of common stock
                
                
                4,700
                
                
                
                239Proceeds
      from note payable-related party
                
                
                45,300
                
                
                
                -Net
      Cash Provided by Financing Activities
                
                
                50,000
                
                
                
                239Net
      Increase in Cash
                
                
                2,884
                
                
                
                -Cash
      at Beginning of Period
                
                
                -
                
                
                
                -Cash
      at End of Period
                
                $
                2,884
                
                
                $
                -Supplemental
      Disclosures:Cash
      paid for income taxes
                
                $
                -
                
                
                $
                -Cash
      paid for interest
                
                $
                -
                
                
                $
                -Non
      Cash Transactions:Stock
      issued for prepaid expenses
                
                $
                1,200
                
                
                $
                -Repayment
      of accrued liabilites related party
                
                $
                29,184
                
                
                $
                -Repayment
      of note payable through issuance common stock
                
                $
                45,300
                
                
                $
                -





The
Accompanying Notes are an Integral Part of the Financial Statements





See
accompanying notes to the consolidated financial statements.


F-17


APOLLO
ENTERTAINMENT GROUP, INC. AND SUBSIDIARY




NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS




NOTE
1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, NATURE OF OPERATIONS AND USE OF
ESTIMATES:




NATURE
OF BUSINESS AND BASIS OF PRESENTATION




Apollo
Entertainment Group, Inc. ("the Company" or "Apollo") was incorporated in the
State of Florida on April 12, 2007 under the name Pop Starz Publishing Corp. as
a wholly owned subsidiary of Pop Starz Records, Inc. On June 24, 2008, the
Company changed its name to Apollo Entertainment Group, Inc. Additionally, on
the same date, the authorized number of shares was increased from 10,000 to
100,000,000 and the par value of the common stock was changed from $.01 to
$.001.




In
September 2008, Pop Starz Records, Inc., the former parent of Apollo
Entertainment Group, Inc. announced its intention to spin off Apollo through the
payment of a stock dividend at the rate of one share of Apollo for each three
shares of Pop Starz Records, Inc. As of that date, Apollo ceased being a
subsidiary of Pop Starz Records, Inc.




The
Company, through its subsidiary, Alpha Music Mfg. Corp., offers the services of
Audio CD/CD Rom duplication and replication, audio cassette duplication, DVD
duplication, and vinyl record pressing throughout the United
States.




Apollo is
a holding corporation. All of our operations are conducted through our
subsidiary, Alpha Music Mfg. Corp. which is a Florida corporation, incorporated
on June 24, 2008.




The
accompanying financial statements have been prepared in accordance with
accounting principles generally accepted in the United States of America and
pursuant to the rules and regulations of the Securities and Exchange Commission
("SEC").




PRINCIPLES
OF CONSOLIDATION




The
consolidated financial statements include the accounts of Apollo Entertainment
Group, Inc. and its wholly owned subsidiary Alpha Music Mfg. Corp. All
intercompany accounts and transactions have been eliminated in
consolidation.




DEVELOPMENT
STAGE




At
December 31, 2007 and through June 2008, the Company was considered to be in the
development stage as our principal operations had not yet commenced. In July,
2008, through our subsidiary Alpha, we commenced our primary operations, and
therefore, are no longer in the development stage.




USE
OF ESTIMATES




The
preparation of financial statements, in conformity with accounting principals
generally accepted in the United States of America requires management to make
estimates and assumptions, which affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period.





See
accompanying notes to the consolidated financial statements.


F-18


APOLLO
ENTERTAINMENT GROUP, INC. AND SUBSIDIARY


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS




CASH
AND CASH EQUIVALENTS




Cash and
cash equivalents are considered to be all highly liquid investments purchased
with an initial maturity of three (3) months or less.




INVENTORY




Inventory
is stated at the lower of cost or market.




PROPERTY
AND EQUIPMENT




Property
and equipment is recorded at cost. Depreciation is recorded on a straight-line
basis over the estimated useful lives of the assets.




REVENUE
RECOGNITION




Revenues
are recognized in accordance with SEC Staff Accounting Bulletin (SAB) No. 101,
"Revenue Recognition in Financial Statements". Under SAB 101, product or service
revenues are recognized when persuasive evidence of an arrangement exists,
delivery has occurred (or service has been performed), the sales price is fixed
and determinable and collectability is reasonably assured.




Revenue
is recognized when payment is received, or when we have made other payment
arrangements with clients and management has a high degree of confidence that
collectability of the sale is assured.




SHIPPING
AND HANDLING COSTS




Shipping
and handling costs are included in prices charged to customers and reflected as
part of income in reported revenues.




FINANCIAL
INSTRUMENTS




Financial
instruments consist primarily of cash, accounts receivable and accounts payable
and accrued liabilities-related parties. The carrying amounts of these financial
instruments approximate fair value because of their short term
maturity.




ADVERTISING




Advertising
costs are charged to operations when incurred. For the years ended December 31,
2008 and 2007 we did not incur any advertising expense.




INCOME
TAXES




The
Company complies with the provisions of SFAS No. 109 "Accounting for Income
Taxes". Deferred income tax assets and liabilities are computed for differences
between the financial statement and tax bases of assets and liabilities that
will result in future taxable or deductible amounts and are based on enacted tax
laws and rates applicable to the periods in which the differences are expected
to affect taxable income. Valuation allowances are established, when necessary,
to reduce deferred income tax assets to the amount expected to be
realized.





See
accompanying notes to the consolidated financial statements.


F-19


APOLLO
ENTERTAINMENT GROUP, INC. AND SUBSIDIARY


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS




INCOME
(LOSS) PER SHARE




In
accordance with SFAS No. 128, "Earnings Per Share", the basic net loss per
common share is computed by dividing net loss available to common stockholders
by the weighted average number of common shares outstanding. Diluted net loss
per common share is computed similar to basic net loss per common share except
that the denominator is increased to include the number of additional common
shares that would have been outstanding if the potential common shares had been
issued and if the additional common shares were dilutive. At December 31, 2008,
the Company did not have any dilutive securities outstanding..




RECENT
ACCOUNTING PRONOUNCEMENTS




In
December 2007, the FASB issued SFAS No. 160, "Non-controlling Interests in
Consolidated Financial Statements, an amendment of Accounting Research Bulletin
No 51" (SFAS 160). SFAS 160 establishes accounting and reporting standards for
ownership interests in subsidiaries held by parties other than the parent,
changes in a parent's ownership of a non-controlling interest, calculation and
disclosure of the consolidated net income attributable to the parent and the
non-controlling interest, changes in a parent's ownership interest while the
parent retains its controlling financial interest and fair value measurement of
any retained non-controlling equity investment. SFAS 160 is effective for
financial statements issued for fiscal years beginning after December 15, 2008,
and interim periods within those fiscal years. Early adoption is prohibited. The
Company has not yet determined the effect of the adoption of SFAS No. 160 will
have on its financial position, results of operations or cash
flows.




In
December 2007, the FASB issued SFAS 141R, "Business Combinations" ("SFAS 141R"),
which replaces FASB SFAS 141, "Business Combinations". This Statement retains
the fundamental requirements in SFAS 141 that the acquisition method of
accounting be used for all business combinations and for an acquirer to be
identified for each business combination. SFAS 141R defines the acquirer as the
entity that obtains control of one or more businesses in the business
combination and establishes the acquisition date as the date that the acquirer
achieves control. SFAS 141R will require an entity to record separately from the
business combination the direct costs, where previously these costs were
included in the total allocated cost of the acquisition. SFAS 141R will require
an entity to recognize the assets acquired, liabilities assumed, and any
non-controlling interest in the acquired at the acquisition date, at their fair
values as of that date. This compares to the cost allocation method previously
required by SFAS No. 141. SFAS 141R will require an entity to recognize as an
asset or liability at fair value for certain contingencies, either contractual
or non-contractual, if certain criteria are met. Finally, SFAS 141R will require
an entity to recognize contingent consideration at the date of acquisition,
based on the fair value at that date. This Statement will be effective for
business combinations completed on or after the first annual reporting period
beginning on or after December 15, 2008. Early adoption of this standard is not
permitted and the standards are to be applied prospectively only. Upon adoption
of this standard, there would be no impact to the Company's results of
operations and financial condition for acquisitions previously completed. The
adoption of SFAS No. 141R could have a material effect on our financial
position, results of operations or cash flows if we consummate any
acquisitions.





See
accompanying notes to the consolidated financial statements.


F-20


APOLLO
ENTERTAINMENT GROUP, INC. AND SUBSIDIARY


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS




In March
2008, the FASB issued SFAS No. 161 "Disclosures about Derivative Instruments and
Hedging Activities—An Amendment of FASB Statement No. 133." ("SFAS 161"). SFAS
161 establishes the disclosure requirements for derivative instruments and for
hedging activities with the intent to provide financial statement users with an
enhanced understanding of the entity's use of derivative instruments, the
accounting of derivative instruments and related hedged items under Statement
133 and its related interpretations, and the effects of these instruments on the
entity's financial position, financial performance, and cash flows. This
statement is effective for financial statements issued for fiscal years
beginning after November 15, 2008. We do not expect its adoption will have a
material impact on our financial position, results of operations or cash
flows.




CONTROL
BY PRINCIPAL STOCKHOLDERS




The
directors, executive officers and their affiliates or related parties, own
beneficially and in the aggregate, the majority of the voting power of the
outstanding shares of the common stock of the Company. Accordingly, the
directors, executive officers and their affiliates, if they voted their shares
uniformly, would have the ability to control the approval of most corporate
actions, including increasing the authorized capital stock of the Company and
the dissolution, merger or sale of the Company's assets or
business.




NOTE
2: RELATED PARTY TRANSACTIONS




On April
12, 2007 in connection with the formation of the Company, the founder of the
Company received 100,000 shares of common stock from the Company for an
aggregate of $239 or $.001 per share. The shares have been adjusted from 10,000
to 100,000 to reflect the change in par value from $.01 to $.001.




On June
25, 2008, the Company entered into a convertible note payable with the Tucker
Family Spendthrift Trust in the amount of $45,300. The convertible note payable
bears interest at the rate of 8% per annum, and was due on June 25, 2009. The
note holder had the right to convert the note payable into shares of common
stock at the rate of $.01 of principal for each share of common stock. On
October 14, 2008, the holder made the election to convert the note payable to
shares of common stock, and therefore, the Company issued 4,530,000 shares of
common stock to the Tucker Family Spendthrift Trust.




During
the period from July through October 2008 the Tucker Family Spendthrift Trust
advanced the Company funds totaling $28,978.




On
October 14, 2008, the Company issued 2,560,150 shares to the Tucker Family
Spendthrift Trust as repayment of advances made to the Company through that
date.




Through
November and December 2008, the Tucker Family Spendthrift advanced the Company
an additional $3,789.





See
accompanying notes to the consolidated financial statements.


F-21


APOLLO
ENTERTAINMENT GROUP, INC. AND SUBSIDIARY


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS




At
December 31, 2008, Accrued liabilities-related party consists of the
following:





Accrued
      wages and officers compensation
                    
                    $
                    45,715Accrued
      rent
                    
                    
                    6,000Accrued
      interest payable
                    
                    
                    1,117Due
      to the Tucker Family Spendthrift Trust
                    
                    
                    5,287$
                    58,119




NOTE
3: INCOME TAXES




At
December 31, 2008 and 2007 deferred tax assets consist of the
following:





December 31,2008
                  
                  
                  2007Federal
      loss carryforwards
                  
                  $
                  19,000
                  
                  
                  $
                  -State
      operating loss carryforwards
                  
                  
                  9,000
                  
                  
                  
                  -28,000
                  
                  
                  
                  -Less:
      valuation allowance
                  
                  
                  (28,000
                  )
                  
                  
                  -$
                  -
                  
                  
                  $
                  -




The
Company has established a valuation allowance equal to the full amount of the
deferred tax asset primarily due to uncertainty in the utilization of the net
operating loss carry forwards.




During
the year ended December 31, 2008, the valuation allowance increased by
$28,000.




As of
December 31, 2008, the effective tax rate is lower than the statutory rate due
to net operating losses.




The net
operating loss carry forwards begin to expire in 2027 for federal purposes and
in 2012 for state purposes.




NOTE
4: STOCKHOLDERS' EQUITY




At
December 31, 2008, the authorized capital of the Company consists of 100,000,000
shares of common stock with a par value of $.001. There were 13,110,150 and
100,000 shares of common stock issued and outstanding at December 31, 2008 and
2007, respectively.




On
September 15, 2008, the Company filed an S-1 registration statement with the
Securities and Exchange Commission registering 4,553,081 shares of Apollo's
common stock which were held by Pop Starz Records, Inc. the former Parent of the
Company. These registered shares were distributed by Pop Starz Records, Inc. to
the shareholders of Pop Starz Records, Inc. At the time of the distribution, Pop
Starz Records, Inc. ceased to be the Company's parent. The registration
statement was declared effective on October 3, 2008.





See
accompanying notes to the consolidated financial statements.


F-22


APOLLO
ENTERTAINMENT GROUP, INC. AND SUBSIDIARY


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS




NOTE
5: COMMITMENTS




On June
26, 2008, the Company, through its subsidiary Alpha, entered into a lease
agreement for an office and warehouse facility. The lease commenced August 1,
2008 with monthly rental payments of $2,961. The lease continues through July
2011. Rent expense included in general and administrative expenses for the year
ended December 31, 2008 and 2007 related to the aforementioned lease agreement
was $17,807 and nil, respectively.




A
schedule of future minimum payments due under the operating lease is as
follows:





Year
      EndingDecember 31,
                  
                  Amount2009
                  
                  $
                  35,5322010
                  
                  
                  35,5322011
                  
                  
                  20,727$
                  91,791




Effective
July 1, 2008, Alpha entered into a consulting agreement with a consultant. Alpha
will pay the consultant $1,000 per month for a minimum of 40 hours per month of
consulting services. Additionally the consultant is to receive 600,000 shares of
Apollo common stock. The shares vest ratably over a three year period and are
subject to forfeiture if the consultant does not remain with Alpha for a period
of three years. For a period of two years commencing on January 1, 2009, the
consultant shall have the right to exchange all of his Apollo shares for 33.33%
of Alpha conditioned upon the repayment of all funds advanced to Alpha plus
interest by Apollo and or its designees. For a period of two years commencing on
September 1, 2008, Apollo may exchange with consultant 33.33% of its shares in
Alpha for return of all of consultants Apollo shares without Alpha being
required to repay any of the advances made by Apollo.




Effective
July 1, 2008, Alpha entered into employment agreements with two employees. Alpha
will pay the employees $4,000 and $2,000 per month, respectively. Additionally
the employees are to receive 300,000 shares of Apollo common stock. The shares
vest ratably over a three year period and are subject to forfeiture if the
employee does not remain with Alpha for a period of three years. For a period of
two years commencing on January 1, 2009, the employee shall have the right to
exchange all of his Apollo shares for 16.66% of Alpha conditioned upon the
repayment of all funds advanced to Alpha plus interest by the Apollo and or its
designees. For a period of two years commencing on September 1, 2008, Apollo may
exchange with employee 16.66% of its Alpha shares for return of all of employees
shares in the Apollo without Alpha being required to repay any of the advances
made by Apollo.




Effective
July 1, 2008, the Company entered into a month to month lease agreement with the
Tucker Family Spendthrift Trust, a related party, for administrative office
space. The monthly rental expense associated with the lease is $1,000 per month.
Rent expense included in general and administrative expenses for the year ended
December 31, 2008 and 2007 related to the aforementioned lease agreement was
$6,000 and nil, respectively.





See
accompanying notes to the consolidated financial statements.


F-23


APOLLO
ENTERTAINMENT GROUP, INC. AND SUBSIDIARY


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS




Effective
July 1, 2008, the Company entered into an agreement with Mrs. Michelle Tucker
for her service as a Director. Mrs. Tucker is compensated as
follows:




(i) For
basic service as a member of the Company's board of directors, 5,000 shares per
month,




(ii) For
service as chairman of any committee, 2,500 shares per month,




(iii) For
service on any other committee, an additional 1,250 shares per
month.




Additionally,
effective September 1, 2008, Mrs. Tucker entered into an employment agreement
whereby she is to be paid $3,000 per month for services to be provided by her in
her capacity as President of the Company.




NOTE
6: GOING CONCERN




At
December 31, 2008, the Company has a working capital deficit in the amount of
$61,750 and has an Accumulated Deficit of $126,410. As such, the accompanying
financial statements have been prepared assuming that the Company will continue
as a going concern. The Company does not have sufficient working capital for its
planned activities, which raises substantial doubt about its ability to continue
as a going concern.




Continuation
of the company as a going concern is dependent upon obtaining additional working
capital and the management of the Company has developed a strategy, which it
believes will accomplish this objective through cash flows from operations,
short-term loans from its shareholders and additional equity investments, which
will enable the Company to continue operations for the coming year.




NOTE
7: SUBSEQUENT EVENTS




Subsequent
to December 31, 2008, the Company has issued 2,217,209 shares of common stock at
$.02 to related parties for advances, compensation, and accrued liabilites. The
Tucker Family Spendthrift Trust has advanced the Company approximately $8,300
subsequent to year end.





See
accompanying notes to the consolidated financial statements.


F-24