Form 10-K Ecomax, Inc For: Jun 30

September 28, 2021 6:18 AM EDT

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

 

FORM 10-K

 

 

 

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

 

For the fiscal year ended June 30, 2021

 

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

 

For the transition period from ________ to ________

 

Commission file number: 000-21613

 

Ecomax, Inc.

(Exact Name Of Company As Specified In Its Charter)

 

Nevada   13-3865026

(State of Incorporation)

 

(I.R.S. Employer Identification No.)

 

1 Rockefeller Plaza, 10th floor New York, NY   10020
(Address of Principal Executive Offices)   (ZIP Code)

 

Registrant’s telephone number, including Area Code: (646)-722-2931

 

Securities registered under Section 12(b) of the Exchange Act: None

 

Securities registered under Section 12(g) of the Exchange Act: None

 

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

Yes ☐ No ☒

 

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

Yes ☐ No ☒

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

 

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

 

Large accelerated filer ☐ Accelerated filer ☐ Non-Accelerated filer ☒ Smaller reporting company ☒
      Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

 

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

 

Yes ☒ No ☐

 

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant, as of the last business day of the registrants most recently completed second fiscal quarter was $288,540.

 

As of September 28, 2021, the registrant had 2,380,952 shares of common stock issued and outstanding.

 

 

 

 

 

 

TABLE OF CONTENTS

 

Item   Description   Page
         
PART I  
         
ITEM 1.   BUSINESS   3
ITEM 1A.   RISK FACTORS   10
ITEM 1B.   UNRESOLVED STAFF COMMENTS   10
ITEM 2.   PROPERTY   10
ITEM 3.   LEGAL PROCEEDINGS   10
ITEM 4.   MINE SAFETY DISCLOSURES   10
         
PART II  
         
ITEM 5.   MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES   10
ITEM 6.   [RESERVED]   11
ITEM 7.   MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATION   11
ITEM 7A.   QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK   14
ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA   14
ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE   14
ITEM 9A.   CONTROLS AND PROCEDURES   14
ITEM 9B.   OTHER INFORMATION   15
ITEM 9C.   DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS   15
         
PART III  
         
ITEM 10.   DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE   15
ITEM 11.   EXECUTIVE COMPENSATION   17
ITEM 12.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS   17
ITEM 13.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE   18
ITEM 14.   PRINCIPAL ACCOUNTING FEES AND SERVICES   18
         
PART IV    
         
ITEM 15.   EXHIBITS AND FINANCIAL STATEMENT SCHEDULES   19
ITEM 16.   FORM 10–K SUMMARY.   19

 

2 

 

 

PART I

 

ITEM 1. BUSINESS

 

Some of the statements contained in this annual report on Form 10-K of Ecomax, Inc. (hereinafter the “Company”, “We” or the “Company”) discuss future expectations, contain projections of our plan of operation or financial condition or state other forward-looking information. In this annual report, forward-looking statements are generally identified by the words such as “anticipate”, “plan”, “believe”, “expect”, “estimate”, and the like. Forward-looking statements involve future risks and uncertainties, there are factors that could cause actual results or plans to differ materially from those expressed or implied. These statements are subject to known and unknown risks, uncertainties, and other factors that could cause the actual results to differ materially from those contemplated by the statements. The forward-looking information is based on various factors and is derived using numerous assumptions. A reader, whether investing in the Company’s securities or not, should not place undue reliance on these forward-looking statements, which apply only as of the date of this annual report. Important factors that may cause actual results to differ from projections include, for example:

 

the success or failure of Management’s efforts to implement the Company’s plan of operation;
the ability of the Company to fund its operating expenses;
the ability of the Company to compete with other companies that have a similar plan of operation;
the effect of changing economic conditions impacting our plan of operation;
the ability of the Company to meet the other risks as may be described in future filings with the Securities and Exchange Commission, or the SEC.

 

3 

 

 

General Background of the Company

 

Ecomax, Inc.(formerly known as Ecomat Inc., the “Company” or “Ecomax) was incorporated on December 14, 1995 pursuant to the laws of the State of Delaware and was formed to develop the Ecomat concept - an environmentally sound solution to the current standard dry cleaning method that utilizes percloroethylene, which has been shown to have various toxic effects.

 

On March 26, 1999, the Company filed a petition under Chapter 7 for liquidation of the Company’s business. As a result of which all of our properties were transferred to a United States Trustee and the Company terminated all of its business operations. The Bankruptcy Trustee has disposed of all of the assets.

 

On June 14, 2006, the Bankruptcy Court granted an order approving the contract and finding that Park Avenue Group was a good faith purchaser within the meaning of 11 USC Section 363(m) of the Bankruptcy Code.

 

On June 15, 2006 and as a result of the Bankruptcy Court Order, Park Avenue Group appointed Ivo Heiden to the Board of Directors of the Company and to serve as its Chief Executive Officer, Chief Financial Officer, sole director, and Chairman of the Board of Directors.

 

On February 5, 2007, the Company issued 13,230,000 shares of common stock to Ivo Heiden, for services provided valued at $2,500. Since then, Ivo Heiden controlled 78.58% of the issued and outstanding shares of common stock.

 

On February 9, 2007, the Company completed its change in domicile to Nevada.

 

On January 5, 2021, the Company entered into a Stock Purchase Agreement (the “SPA”) with Clark Orient (BVI) Limited, (“Clark Orient”), Mr. Heiden, and WWYD, Inc. (WWYD, Inc. was a 5% or more shareholder of the Company. Mr. Heiden and WWYD, Inc. collectively referred to as the “Sellers”), pursuant to which Clark Orient acquired 20,205,000 shares of common stock of the Company (the “Shares”) from Sellers for an aggregate purchase price of $320,000. The transaction contemplated in the SPA closed on January 7, 2021. The Shares represent approximately 85% of the issued and outstanding common stock of the Company. The transaction resulted in a change in control of the Company.

 

In connection with the change in control, Mr. Heiden, our then Chief Executive Officer, Chief Financial Officer, sole director, and Chairman of the Board of Directors of the Company, resigned from all of his positions with the Company and the resignations became effective on January 6, 2021. Ms. Yang Gui was appointed as the Chief Executive Officer, Chief Financial Officer, sole director, and Chairwoman of the Board of Directors of the Company, effective on January 6, 2021.

 

On March 11, 2021, upon the departure of Ms. Yang Gui, Mr. Yu Yam Anthony Chau was appointed as the Chief Executive Officer, Chief Financial Officer, sole director, and Chairman of the Board of Directors of the Company, effective on March 11, 2021.

 

On March 18, 2021, by unanimous written consent of the Board of Directors of the Company, the Board of Directors adopted resolutions approving 1) a reverse split of the Company’s common stock at a ratio of 1-for-10, whereby every 10 shares of the issued and outstanding common stock shall be combined into one share of issued and outstanding common stock (the “Reverse Stock Split”); 2) an increase in the number of the authorized capital stock from 75,000,000 to 500,000,000, with the par value remaining at $0.0001 per share, consisting of 450,000,000 shares of common stock, par value $0.0001 per share and 50,000,000 shares of preferred stock, par value $0.0001 per share (the “Increase of Authorized Stock”); 3) a change of the Company’s name and ticker from “Ecomat, Inc.” and “ECMT,” to “Ecomax, Inc.” and “ECMX” (the “Change of Name,” together with the Reverse Stock Split and the Increase of Authorized Stock, collectively the “Corporate Actions”); 4) amendments to its articles of incorporation to reflect the Corporate Actions (the “Amendments of Articles of Incorporation”); and 5) a proposal that such resolutions be submitted for a vote of the stockholders of the Company.

 

On March 18, 2021, the stockholder holding in the aggregate 20,205,000 shares of common stock or approximately 85% of the common stock outstanding on such date, approved the Corporate Actions.

 

On April 1, 2021, the Company filed a preliminary information statement on Schedule 14C with the SEC.

 

On April 13, 2021, the Company filed a definitive information statement on Schedule 14C with SEC.

 

On April 20 and 21, 2021, the Company filed a certificate of change and a certificate of amendment with the Secretary of State of the State of Nevada.

 

On April 28, 2021, the Company filed an Issuer Notification Form with FINRA requesting confirmation of the Change of Name.

 

On May 20, 2021, FINRA informed the Company that the change of the Company’s name to “Ecomax, Inc.” would become effective on May 21, 2021. The new ticker symbol EMAX would not be effective for 20 business days. For a reverse split, a “D” will be appended as the 5th character for 20 business days including the effective date. After 20 business days the new symbol would be EMAX.

 

4 

 

 

The Corporate Actions, as of the date of this report, have all came into effect. As of the date of this report, our ticker symbol on OTC Markets has been changed to EMAX and our name has been changed to Ecomax, Inc.

 

Business Objectives of the Company

 

The Company has no business operations. Management has determined to direct its efforts and limited resources to pursue potential new business opportunities. The Company does not intend to limit itself to a particular industry and has not established any particular criteria upon which it shall consider a business opportunity.

 

The Company’s common stock is subject to quotation on the OTC Pink Sheets under the symbol EMAX. There is currently only a limited trading market in the Company’s shares and the Company believes that no active trading market has existed for the last 3 years. In the event that an active trading market commences, there can be no assurance as to the market price of our shares of common stock, whether any trading market will provide liquidity to investors, or whether any trading market will be sustained.

 

Management would have substantial flexibility in identifying and selecting a prospective new business opportunity. The Company is dependent on the judgment of its Management in connection with this process. In evaluating a prospective business opportunity, we would consider, among other factors, the following:

 

costs associated with pursuing a new business opportunity;
growth potential of the new business opportunity;
experiences, skills and availability of additional personnel necessary to pursue a potential new business opportunity;
necessary capital requirements;
the competitive position of the new business opportunity;
stage of business development;
the market acceptance of the potential products and services;
proprietary features and degree of intellectual property; and
the regulatory environment that may be applicable to any prospective business opportunity.

 

The foregoing criteria are not intended to be exhaustive and there may be other criteria that Management may deem relevant. In connection with an evaluation of a prospective or potential business opportunity, Management may be expected to conduct a due diligence review.

 

The time and costs required to pursue new business opportunities, which includes negotiating and documenting relevant agreements and preparing requisite documents for filing pursuant to applicable securities laws, cannot be ascertained with any degree of certainty. In addition, the global COVID-19 pandemic has created significant challenges for us to research for a target and any target business with which we ultimately consummate a business combination, may be materially adversely affected by the COVID-19 pandemic.

 

Management intends to devote such time as it deems necessary to carry out the Company’s affairs. The exact length of time required for the pursuit of any new potential business opportunities is uncertain. No assurance can be made that we will be successful in our efforts. We cannot project the amount of time that our Management will actually devote to the Company’s plan of operation.

 

The Company’s intends to conduct its activities so as to avoid being classified as an “Investment Company” under the Investment Company Act of 1940, and therefore avoid application of the costly and restrictive registration and other provisions of the Investment Company Act of 1940 and the regulations promulgated thereunder.

 

5 

 

 

The Company’s is a Blank Check Company

 

At present, the Company is a development stage company with no revenues, no assets and no specific business plan or purpose. The Company’s business plan is to seek new business opportunities or to engage in a merger or acquisition with an unidentified company. As a result, the Company is a “blank check company” and, as a result, any offerings of the Company’s securities under the Securities Act of 1933, as amended (the “Securities Act”) must comply with Rule 419 promulgated by the SEC under the Act. The Company’s common stock is a “penny stock,” as defined in Rule 3a51-1 promulgated by the SEC under the Securities Exchange Act of 1934 (the “Exchange Act”). The penny stock rules require a broker-dealer, prior to a transaction in penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that provides information about penny stocks and the nature and level of risks in the penny stock market (the “Penny Stock Rules”). The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its sales person in the transaction, and monthly account statements showing the market value of each penny stock held in the customer’s account. In addition, the Penny Stock Rules require that the broker-dealer, not otherwise exempt from such rules, must make a special written determination that the penny stock is suitable for the purchaser and receive the purchaser’s written agreement to the transaction. These disclosure rules have the effect of reducing the level of trading activity in the secondary market for a stock that becomes subject to the Penny Stock Rules. So long as the common stock of the Company is subject to the Penny Stock Rules, it may be more difficult to sell the Company’s common stock.

 

The Company is a shell company as defined in Rule 405 promulgated by the SEC under the Securities Act. A shell company is one that has no or nominal operations and either: (i) no or nominal assets; or (ii) assets consisting primarily of cash or cash equivalents. As a shell company, we are restricted in our use of Registrations on Form S-8 under the Securities Act; the lack of availability of the use of Rule 144 by security holders; and the lack of liquidity in our stock.

 

Form S-8

 

Shell companies are prohibited from using Form S-8 to register securities under the Securities Act. If a company ceases to be a shell company, it may use Form S-8 sixty calendar days, provided it has filed all reports and other materials required to be filed under the Exchange Act during the preceding 12 months (or for such shorter period that it has been required to file such reports and materials after the company files “Form 10 information,” which is information that a company would be required to file in a registration statement on Form 10 if it were registering a class of securities under Section 12 of the Exchange Act. This information would normally be reported on a current report on Form 8-K reporting the completion of a transaction that caused the company to cease being a shell company.

 

Unavailability of Rule 144 for Resale

 

Rule 144(i) “Unavailability to securities of issuers with no or nominal operations and no or nominal non-cash assets” provides that Rule 144 is not available for the resale of securities initially issued by an issuer that is a shell company. We have identified our company as a shell company and, therefore, the holders of our securities may not rely on Rule 144 to have the restriction removed from their securities without registration or until the company is no longer identified as a shell company.

 

As a result of our classification as a shell company, our investors are not allowed to rely on the “safe harbor” provisions of Rule 144, promulgated pursuant to the Securities Act, so as not to be considered underwriters in connection with the sale of our securities until one year from the date that we cease to be a shell company. This will likely make it more difficult for us to attract additional capital through subsequent unregistered offerings because purchasers of securities in such unregistered offerings will not be able to resell their securities in reliance on Rule 144, a safe harbor on which holders of restricted securities usually rely to resell securities.

 

Very Limited Liquidity of our Common Stock

 

Our common stock trades from time to time on the OTC Pink Sheet Market but there is no active market maker in our common stock. As a result, there is only limited liquidity in our common stock.

 

We will be deemed a blank check company under Rule 419 of the Securities Act

 

The provisions of Rule 419 apply to registration statements filed under the Securities Act by a blank check company, such as the Company. Rule 419 requires that a blank check company filing a registration statement deposit the securities being offered and proceeds of the offering into an escrow or trust account pending the execution of an agreement for an acquisition or merger.

 

6 

 

 

In addition, an issuer is required to file a post-effective amendment to the registration statement upon the execution of an agreement for such acquisition or merger. The rule provides procedures for the release of the offering funds in conjunction with the post effective acquisition or merger. The obligations to file post-effective amendments are in addition to the obligations to file Forms 8-K to report for both the entry into a material definitive (non-ordinary course of business) agreement and the completion of the transaction. Rule 419 applies to both primary and re-sale or secondary offerings.

 

Within five (5) days of filing a post-effective amendment setting forth the proposed terms of an acquisition, the Company must notify each investor whose shares are in escrow. Each investor then has no fewer than 20 and no greater than 45 business days to notify the Company in writing if they elect to remain an investor. A failure to reply indicates that the person has elected to not remain an investor. As all investors are allotted this second opportunity to determine to remain an investor, acquisition agreements should be conditioned upon enough funds remaining in escrow to close the transaction.

 

Effecting a business combination

 

Prospective investors in the Company’s common stock will not have an opportunity to evaluate the specific merits or risks of any of the one or more business combinations that we may undertake. A business combination may involve the acquisition of, or merger with, a company which needs to raise substantial additional capital by means of being a publicly trading company, while avoiding what it may deem to be adverse consequences of undertaking a public offering itself. These include time delays, significant expense, loss of voting control and compliance with various federal and state securities laws. A business combination may involve a company which may be financially unstable or in its early stages of development or growth.

 

The Company has not identified a target business or target industry

 

The Company’s effort in identifying a prospective target business will not be limited to a particular industry and the Company may ultimately acquire a business in any industry Management deems appropriate. To date, the Company has not selected any target business on which to concentrate our search for a business combination. While the Company intends to focus on target businesses in the United States, it is not limited to U.S. entities and may consummate a business combination with a target business outside of the United States. Accordingly, there is no basis for investors in the Company’s common stock to evaluate the possible merits or risks of the target business or the particular industry in which we may ultimately operate. To the extent we effect a business combination with a financially unstable company or an entity in its early stage of development or growth, including entities without established records of sales or earnings, we may be affected by numerous risks inherent in the business and operations of financially unstable and early stage or potential emerging growth companies. In addition, to the extent that we effect a business combination with an entity in an industry characterized by a high level of risk, we may be affected by the currently unascertainable risks of that industry. An extremely high level of risk frequently characterizes many industries which experience rapid growth. In addition, although the Company’s Management will endeavor to evaluate the risks inherent in a particular industry or target business, we cannot assure you that we will properly ascertain or assess all significant risk factors.

 

Sources of target businesses

 

Our Management anticipates that target business candidates will be brought to our attention from various unaffiliated sources, including securities broker-dealers, investment bankers, venture capitalists, bankers and other members of the financial community, who may present solicited or unsolicited proposals. Our Management may also bring to our attention target business candidates. While we do not presently anticipate engaging the services of professional firms that specialize in business acquisitions on any formal basis, we may engage these firms in the future, in which event we may pay a finder’s fee or other compensation in connection with a business combination. In no event, however, will we pay Management any finder’s fee or other compensation for services rendered to us prior to or in connection with the consummation of a business combination.

 

7 

 

 

Selection of a target business and structuring of a business combination

 

Management has broad flexibility in identifying and selecting a prospective target business. In evaluating a prospective target business, our Management will consider, among other factors, the following:

 

financial condition and results of operation of the target company;
growth potential;
experience and skill of Management and availability of additional personnel;
capital requirements;
competitive position;
stage of development of the products, processes or services;
degree of current or potential market acceptance of the products, processes or services;
proprietary features and degree of intellectual property or other protection of the products, processes or services;
regulatory environment of the industry; and
costs associated with effecting the business combination.

 

These criteria are not intended to be exhaustive. Any evaluation relating to the merits of a particular business combination will be based, to the extent relevant, on the above factors as well as other considerations deemed relevant by our Management in effecting a business combination consistent with our business objective. In evaluating a prospective target business, we will conduct a due diligence review which will encompass, among other things, meetings with incumbent Management and inspection of facilities, as well as review of financial and other information which will be made available to us.

 

We will endeavor to structure a business combination so as to achieve the most favorable tax treatment to us, the target business and both companies’ stockholders. However, there can be no assurance that the Internal Revenue Service or applicable state tax authorities will necessarily agree with the tax treatment of any business combination we consummate.

 

The time and costs required to select and evaluate a target business and to structure and complete the business combination cannot presently be ascertained with any degree of certainty. Any costs incurred with respect to the identification and evaluation of a prospective target business with which a business combination is not ultimately completed will result in a loss to us.

 

Probable lack of business diversification

 

While we may seek to effect business combinations with more than one target business, it is more probable that we will only have the ability to effect a single business combination, if at all. Accordingly, the prospects for our success may be entirely dependent upon the future performance of a single business. Unlike other entities which may have the resources to complete several business combinations with entities operating in multiple industries or multiple areas of a single industry, it is probable that we will lack the resources to diversify our operations or benefit from the possible spreading of risks or offsetting of losses. By consummating a business combination with only a single entity, our lack of diversification may:

 

subject us to numerous economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact upon the particular industry in which we may operate subsequent to a business combination, and
result in our dependency upon the development or market acceptance of a single or limited number of products, processes or services.

 

Limited ability to evaluate the target business’ Management

 

Although we intend to closely scrutinize the Management of a prospective target business when evaluating the desirability of effecting a business combination, we cannot assure you that our assessment of the target business’ Management will prove to be correct. In addition, we cannot assure you that the future Management will have the necessary skills, qualifications or abilities to manage a public company intending to embark on a program of business development. Furthermore, the future role of our director, if any, in the target business cannot presently be stated with any certainty.

 

8 

 

 

While it is possible that our director will remain associated in some capacity with us following a business combination, it is unlikely that he will devote his full efforts to our affairs subsequent to a business combination. Moreover, we cannot assure you that our director will have significant experience or knowledge relating to the operations of the particular target business.

 

Following a business combination, we may seek to recruit additional managers to supplement the incumbent Management of the target business. We cannot assure you that we will have the ability to recruit additional managers, or that additional managers will have the requisite skills, knowledge or experience necessary to enhance the incumbent Management.

 

Our auditors have expressed substantial doubt about our ability to continue as a going concern

 

Our audited financial statements for the years ended June 30, 2021 and 2020, were prepared using the assumption that we will continue our operations as a going concern. Our independent accountants in their audit report have expressed substantial doubt about our ability to continue as a going concern. Our operations are dependent on our ability to raise sufficient capital or complete business combination as a result of which we become profitable. Our financial statements do not include any adjustments that may result from the outcome of this uncertainty. There is not enough cash on hand to fund our administrative expenses and operating expenses for the next twelve months. Therefore, we may be unable to continue operations in the future as a going concern. If we cannot continue as a viable entity, our stockholders may lose some or all of their investment in the Company’s shares of common stock.

 

Competition

 

In identifying, evaluating and selecting a target business, we expect to encounter intense competition from other entities having a business objective similar to ours. Many of these entities are well established and have extensive experience identifying and effecting business combinations, either directly or through affiliates. Many if not virtually most of these competitors possess far greater financial, human and other resources compared to our resources. While we believe that there are numerous potential target businesses that we may identify, our ability to compete in acquiring certain of the more desirable target businesses will be limited by our limited financial and human resources. Our inherent competitive limitations are expected by Management to give others an advantage in pursuing the acquisition of a target business that we may identify and seek to pursue. Further, any of these limitations may place us at a competitive disadvantage in successfully negotiating a business combination. Our Management believes, however, that our status as a reporting public entity with potential access to the United States public equity markets may give us a competitive advantage over certain privately-held entities having a similar business objective in acquiring a desirable target business with growth potential on favorable terms.

 

If we succeed in effecting a business combination, there will be, in all likelihood, intense competition from existing competitors of the business we acquire. In particular, certain industries which experience rapid growth frequently attract an increasingly larger number of competitors, including those with far greater financial, marketing, technical and other resources than the initial competitors in the industry in which we seek to operate. The degree of competition characterizing the industry of any prospective target business cannot presently be ascertained. We cannot assure you that, subsequent to a business combination, we will have the resources to compete effectively, especially to the extent that the target business is in a high-growth industry.

 

Employees

 

Mr. Yu Yam Anthony Chau, our CEO and CFO, is our sole executive officer. Mr. Chau is not obligated to devote any specific number of hours per week and, in fact, intends to devote only as much time as he deems reasonably necessary to administer the Company’s affairs until such time as a business combination is consummated. The amount of time he will devote in any time period will vary based on the availability of suitable target businesses to investigate. We do not intend to have any full-time employees prior to the consummation of a business combination.

 

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Conflicts of Interest

 

The Company’s management is not required to commit its full time to the Company’s affairs. As a result, pursuing new business opportunities may require a longer period of time than if management would devote full time to the Company’s affairs. Management is not precluded from serving as an officer or director of any other entity that is engaged in business activities similar to those of the Company. Management has not identified and is not currently negotiating a new business opportunity for us. In the future, our management may become associated or affiliated with entities engaged in business activities similar to those we intend to conduct. In such event, our management may have conflicts of interest in determining to which entity a particular business opportunity should be presented. In the event that the Company’s Management has multiple business affiliations, our Management may have legal obligations to present certain business opportunities to multiple entities. In the event that a conflict of interest shall arise, Management will consider factors such as reporting status, availability of audited financial statements, current capitalization and the laws of jurisdictions. If several business opportunities or operating entities approach Management with respect to a business combination, Management will consider the foregoing factors as well as the preferences of the Management of the operating company. However, Management will act in what it believes will be in the best interests of the shareholders of the Company.

 

ITEM 1A. RISK FACTORS

 

As a smaller reporting company, we are not required to provide the information required by this item.

 

ITEM 1B. UNRESOLVED STAFF COMMENTS

 

Not applicable.

 

ITEM 2. PROPERTIES

 

The Company’s corporate office is located at 1 Rockefeller Plaza, 10th floor, New York, NY 10020, which space is provided to us on a rent-free basis by New York Listing Management Inc. The Company believes that the office facilities are sufficient for the foreseeable future and this arrangement will remain until we find a new business opportunity.

 

ITEM 3. LEGAL PROCEEDINGS

 

None.

 

ITEM 4. MINE SAFETY DISCLOSURES

 

Not applicable.

 

PART II

 

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

 

Market Information

 

Our common stock is currently quoted on the OTC market “Pink Sheets” under the symbol EMAX and has very limited trading. We cannot assure you that there will be a market in the future for our common stock. The closing price of our common stock on the OTC on September 21, 2021 was $ 1.75 per share. As of September 16, 2021, our shares of common stock were held by approximately 47 stockholders of record. The transfer agent of our common stock is Standard Registrar and Transfer Company, Inc. at 440 East 400 South, Suite 200, Salt Lake City, UT 84111. Their phone number is (801) 571-8844.

 

10 

 

 

Dividends

 

Holders of common stock are entitled to dividends when, as, and if declared by the Board of Directors, out of funds legally available therefore. We have never declared cash dividends on its common stock and our Board of Directors does not anticipate paying cash dividends in the foreseeable future as it intends to retain future earnings to finance the growth of our businesses. There are no restrictions in our articles of incorporation or bylaws that restrict us from declaring dividends.

 

Securities Authorized for Issuance Under Equity Compensation Plans

 

No equity compensation plan or agreements under which our common stock is authorized for issuance has been adopted during the fiscal year ended June 30, 2021 and 2020.

 

Recent Sales of Unregistered Securities

 

None.

 

Recent Purchases of Equity Securities by us and our Affiliated Purchasers

 

None.

 

ITEM 6. SELECTED FINANCIAL DATA

 

[Reserved]

 

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS

 

The following discussion and analysis of financial condition and results of operations relates to the operations and financial condition reported in the consolidated financial statements of the Company thereto, which appear elsewhere in this Annual Report on Form 10-K, and should be read in conjunction with such financial statements and related notes included in this report. Except for the historical information contained herein, the following discussion, as well as other information in this report, contain “forward-looking statements,” 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, and are subject to the “safe harbor” created by those sections. Actual results and the timing of the events may differ materially from those contained in these forward-looking statements due to many factors, including those discussed in the “Forward-Looking Statements” set forth elsewhere in this Annual Report on Form 10-K.

 

Management’s Plan of Operation

 

The following discussion contains forward-looking statements. Forward-looking statements give our current expectations or forecasts of future events. You can identify these statements by the fact that they do not relate strictly to historical or current facts. They use of words such as “anticipate”, “estimate”, “expect”, “project”, “intend”, “plan”, “believe”, and other words and terms of similar meaning in connection with any discussion of future operating or financial performance. From time to time, we also may provide forward-looking statements in other materials we release to the public.

 

Overview

 

The Company’s current business objective is to seek a business combination with an operating company. We intend to use the Company’s limited personnel and financial resources in connection with such activities. The Company will utilize its capital stock, debt or a combination of capital stock and debt, in effecting a business combination. It may be expected that entering into a business combination will involve the issuance of restricted shares of capital stock. The issuance of additional shares of our capital stock:

 

may significantly reduce the equity interest of our stockholders;
will likely cause a change in control if a substantial number of our shares of capital stock are issued, and most likely will also result in the resignation or removal of our present officer and director; and
may adversely affect the prevailing market price for our common stock.

 

11 

 

 

Similarly, if we issued debt securities, it could result in:

 

default and foreclosure on our assets if our operating revenues after a business combination were insufficient to pay our debt obligations;
acceleration of our obligations to repay the indebtedness even if we have made all principal and interest payments when due if the debt security contained covenants that required the maintenance of certain financial ratios or reserves and any such covenants were breached without a waiver or renegotiations of such covenants;
our immediate payment of all principal and accrued interest, if any, if the debt security was payable on demand; and
our inability to obtain additional financing, if necessary, if the debt security contained covenants restricting our ability to obtain additional financing while such security was outstanding.

 

Results of Operations during the year ended June 30, 2021 as compared to the year ended June 30, 2020

 

We have not generated any revenues during the years 2021 and 2020. We had total operating expenses of $95,028 related to general and administrative expenses during the year ended June 30, 2021 compared to total operating expenses of $56,673 during the year ended June 30, 2020. We incurred interest expense of $8,853 during the year ended June 30, 2021 compared to interest expense of $10,788 during the year ended June 30, 2020. During the year ended June 30, 2021 and 2020, we had a net loss of $103,611 and $67,461, respectively, mainly due to our general and administrative expenses.

 

Liquidity and Capital Resources

 

At present, the Company has no business operations and no cash resources other than that provided by our majority shareholder or an affiliated party. We are dependent upon interim funding provided by our majority shareholder or an affiliated party to pay professional fees and expenses. Our majority shareholder and an affiliated party have agreed to provide funding as may be required to pay for accounting fees and other administrative expenses of the Company until the Company enters into a business combination. The Company would be unable to continue as a going concern without interim financing provided by our majority shareholder or our affiliated party.

 

If we require additional financing, we cannot predict whether equity or debt financing will become available at terms acceptable to us, if at all. The Company depends upon services provided by Management and funding provided by our majority shareholder or our affiliated party to fulfill its filing obligations under the Exchange Act. At present, the Company has no financial resources to pay for such services.

 

The Company does not currently engage in any business activities that provide cash flow.

 

During the next 12 months we anticipate incurring costs related to:

 

filing of Exchange Act reports.
franchise fees, registered agent fees and accounting fees,
Compensation to our Management, and
investigating, analyzing and consummating an acquisition or business combination.

 

We estimate that these costs will be in the range of five to ten thousand dollars per year, and that we will be able to meet these costs as necessary, to be loaned to us by our majority shareholder or our affiliated party.

 

As of June 30, 2021 and 2020, we had no current assets. As of June 30, 2021, we had $93,085 in current liabilities consisting of advance from a related party of $59,725, accrued expenses of $25,030, accrued interest due to related parties of $666, and accounts payable of 7,664. As of June 30, 2020, we had $214,961 in liabilities consisting of accounts payable of $3,350, advance from a related party of $28,155, accrued interest due to related parties of $18,456 and a $165,000 in convertible notes.

 

12 

 

 

On January 6, 2021, Ivo Heiden waived the accrued interests and liabilities of the loan agreement between him and the Company dated September 1, 2017, and two convertible notes (one dated May 1, 2020, the other October 12, 2018) for the total amount of $225,487, and the Company recorded such amount as additional paid in capital accordingly.

 

We had a negative cash flow from operations of $65,684 during the year ended June 30, 2021 mainly due to a net loss of $103,611 offset by an increase in accounts payable and accrued liabilities of $37,927. We financed our negative cash flow from operations during the year ended June 30, 2021 through advances made by our affiliated party of $65,684.

 

We had a negative cash flow from operations of $8,324 during the year ended June 30, 2020, mainly due to a net loss of $67,461 offset by an increase in accounts payable and accrued liabilities of $59,137. We financed our negative cash flow from operations during the year ended June 30, 2020 through advances made by our CEO of $8,324.

 

The Company currently plans to satisfy its cash requirements for the next 12 months through borrowings from New York Listing Management Inc., an affiliated party, and believes it can satisfy its cash requirements so long as it is able to obtain financing from New York Listing Management Inc. The Company expects that money borrowed will be used during the next 12 months to satisfy the Company’s operating costs, professional fees and for general corporate purposes. On September 1, 2017, we formalized a verbal funding agreement and entered into a loan agreement with Ivo Heiden, our then sole officer and director, under which we receive funding of up to $100,000 for general operating expenses from time-to-time as needed by the Company. The loan bore an interest rate of 8% per annum and was due and payable on a date three hundred sixty-six (366) days from the date of the loan agreement. On May 1, 2020, the loan agreement was extended to September 1, 2021. As of January 6, 2021, the Company has received a total of $34,114 under this loan agreement. On January 6, 2021, Mr. Heiden waived the liabilities as well as the interests owed by the Company.

 

On March 31, 2021, we entered into a loan agreement with New York Listing Management Inc., a related party, under which we are able to receive funding of up to $200,000 for general operating expenses from time-to-time as needed by the Company. The loan bears an interest rate of 8% per annum and shall be due and payable on a date three hundred sixty-six (366) days from the date of such loan agreement. As of June 30, 2021, the Company has received a total of $59,275 under this loan agreement.

 

The Company intends to repay the loan from New York Listing Management Inc. at a time when it has the cash resources to do so.

 

The Company has only limited capital. Additional financing is necessary for the Company to continue as a going concern. Our independent auditors issued an unqualified audit opinion for the years ended June 30, 2021 and 2020 with an explanatory paragraph on going concern.

 

Off-Balance Sheet Arrangements

 

As of June 30, 2021 and 2020, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K promulgated under the Securities Act of 1934.

 

Contractual Obligations and Commitments

 

As of June 30, 2021 and 2020, we did not have any contractual obligations.

 

Significant Accounting Policies

 

Our significant accounting policies are described in the notes to our financial statements for the years ended June 30, 2021 and 2020, and are included elsewhere in this annual report.

 

13 

 

 

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

We have not entered into, and do not expect to enter into, financial instruments for trading or hedging purposes.

 

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

 

Our financial statements required by this item are included on the pages immediately following the Index to Financial Statements appearing on page F-1.

 

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

 

N.A.

 

ITEM 9A. CONTROLS AND PROCEDURES

 

Evaluation of Disclosure Controls and Procedures

 

As of June 30, 2021, the Company’s Chief Executive Officer conducted an evaluation regarding the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Exchange Act. Based upon the evaluation of these controls and procedures as provided under the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework (2013), our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were ineffective because of the identification of material weaknesses including lack of sufficient internal accounting personnel in order to ensure complete documentation of complex transactions and adequate financial reporting during the fiscal year ended June 30, 2021. The Company has no formal control process related to the identification and approval of related party transactions. As a shell company, the Company currently has no operations and limited personnel, and it has to date not taken corrective actions for the ineffective disclosure controls and procedures. The Company intends to take corrective actions in the future when its starts operations.

 

Management’s Annual Report on Internal Control Over Financial Reporting

 

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Exchange Act Rule 13a-15. Internal control over financial reporting is defined in Rule 13a-15(f) and 15(d)-15(f) under the Exchange Act as a process designed to provide reasonable assurance to the Company’s management and Board of Directors regarding the preparation and fair presentation of published financial statements. Management conducted an assessment of the Company’s internal control over financial reporting as of June 30, 2021 based on the framework and criteria established by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework (2013).

 

Based on our assessment and those criteria, we have concluded that our internal control over financial reporting were ineffective because of the identification of material weaknesses including lack of sufficient internal accounting personnel in order to ensure complete documentation of complex transactions and adequate financial reporting during the year ended June 30, 2021. The Company has no formal control process related to the identification and approval of related party transactions. As a shell company, the Company currently has no operations and limited personnel, and it has to date not taken corrective actions for the ineffective internal control over its financial reporting. The Company intends to take corrective actions in the future when its starts operations.

 

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

 

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

 

14 

 

 

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

 

Changes in Internal Control Over Financial Reporting

 

There were no changes in our internal control over financial reporting or in other factors identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 or 15d-15 that occurred during the fourth quarter ended June 30, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

ITEM 9B. OTHER INFORMATION

 

None.

 

ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

 

Not applicable.

 

PART III

 

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

 

The following table sets forth the names and ages of the member of our Board of Director and our executive officers and the positions held by each.

 

Name   Age   Title
Yu Yam, Anthony, Chau   45  
Chief Executive Officer, Chief Financial Officer, sole director and Chairman of the Board

 

Yu Yam, Anthony, Chau, 45, has been our Chief Executive Officer, Chief Financial Officer, sole director and Chairman of the Board of Directors since March 11, 2021. Mr. Chau has over 20 years of experience in providing financial advisory and corporate service to companies across various industries. From March 1998 to January 2014, Mr. Chau worked at W. M. Sum & Co., an audit firm, as an audit trainee and his last position held was senior auditor during which he was responsible for preparing audit reports and advising on tax matters for private companies in Hong Kong and the PRC, such as property investors, manufacturers, property developers and securities traders. Mr. Chau then acted as group financial controller to Rising Peak Investment Guangzhou Company Limited, an investment company, between February 2014 and August 2015, where he was mainly responsible for financial and company secretarial matters. From September 2015 to November 2018. Mr. Chau served as group financial controller to Wide Strong Resources Limited, an investment company, during which he supervised the initial public offering of a PRC company on the Shenzhen Stock Exchange and was involved in subsequent fund raising activities. Mr. Chau received a Bachelor in Business (Accounting and Finance) from the University of Technology Sydney in Australia in May 1998. Mr. Chau completed the CPA qualification programme with the Hong Kong Institute of Certified Public Accountants in September 2010. In January 2011, Mr. Chau became a certified public accountant of the Hong Kong Institute of Certified Public Accountants and has been registered as a practicing certified public accountant since January 2015. In March 2018, Mr. Chau became a fellow of the Hong Kong Institute of Certified Public Accountants. Mr. Chau has not been a director of any public company in the last three years.

 

15 

 

 

Directors’ Compensation

 

Our director holds office until the next annual meeting of stockholders and until his successor has been duly elected and qualified. There are no agreements with respect to the election of directors. We do not compensate our directors. Officers are appointed annually by the Board of Directors and each executive officer serves at the discretion of the Board of Directors.

 

Committees of the Board of Directors

 

Our Board of Directors has not established any committees, including an audit committee, a compensation committee, a nominating committee or any committee performing a similar function. The functions of those committees are being undertaken by our sole board member. Because we have only one director and do not have any independent directors, the establishment of committees of the Board of Directors would not provide any benefits to our company and could be considered more form than substance.

 

Involvement in Certain Legal Proceedings

 

To the best of our knowledge, our sole director and executive officer has not, during the past ten years:

 

  been convicted in a criminal proceeding or been subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);
  had any bankruptcy petition filed by or against the business or property of the person, or of any partnership, corporation or business association of which he was a general partner or executive officer, either at the time of the bankruptcy filing or within two years prior to that time;
  been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction or federal or state authority, permanently or temporarily enjoining, barring, suspending or otherwise limiting, his involvement in any type of business, securities, futures, commodities, investment, banking, savings and loan, or insurance activities, or to be associated with persons engaged in any such activity;
  been found by a court of competent jurisdiction in a civil action or by the SEC or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated;
  been the subject of, or a party to, any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated (not including any settlement of a civil proceeding among private litigants), relating to an alleged violation of any federal or state securities or commodities law or regulation, any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order, or any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or
  been the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

 

Code of Ethics

 

As a shell company, we currently have not adopted a code of ethics. We plan to adopt a code of ethics when we become an operating company.

 

Family Relationships

 

There are no family relationships among the director and executive officer of the Company.

 

16 

 

 

ITEM 11. EXECUTIVE COMPENSATION

 

The table below summarizes all compensation awarded to, earned by, or paid to our Chief Executive Officer and Chief Financial Officer who occupied such position at the end of our latest fiscal year.

 

               Stock
Option
  Stock   All Other    
Name and      Salary   Bonus   Awards  Awards   Compensation  Total 
Principal Position  Year   ($)   ($)   ($)  (#)   ($)  ($) 
Yu Yam, Anthony, Chau
Chief Executive Officer
and Chief Financial Officer(1)
   2020   $0    N/A   N/A   N/A   N/A  $0 
    2021   $24,000    N/A    N/A   N/A   N/A  $24,000 

 

(1) Mr. Chau received employment compensation pursuant to an employment agreement entered into with the Company dated March 11, 2021 as the Company’s Chief Executive Officer and Chief Financial Officer.

 

As of June 30, 2021 and 2020, accrued compensation due to Mr. Heiden was $0 and $0, respectively.

 

Option Grants in Last Fiscal Year

 

The Company did not grant any options in the fiscal year ended June 30, 2021.

 

Pension, Retirement or Similar Benefit Plans

 

There are no arrangements or plans in which we provide pension, retirement, or similar benefits for directors or executive officers. We have no material bonus or profit-sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers.

 

Employment Agreements

 

The Company has not entered into employment agreements with officers and other key employees except as disclosed in this Item 11.

 

Equity Compensation Plan

 

The Company does not have any Equity Compensation Plan.

 

Directors’ and Officers’ Liability Insurance

 

The Company currently does not have insurance for directors and officers against liability.

 

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

 

The following table sets forth information regarding the beneficial ownership of our common stock as of June 30, 2021. The information in this table provides the ownership information for: each person known by us to be the beneficial owner of more than 5% of our common stock; each of our directors; each of our executive officers; and our executive officers and directors as a group.

 

Beneficial ownership has been determined in accordance with the rules and regulations of the SEC and includes voting or investment power with respect to the shares. Unless otherwise indicated, the persons named in the table below have sole voting and investment power with respect to the number of shares indicated as beneficially owned by them.

 

Name of Beneficial Owner  Common Stock Beneficially Owned   Percentage of Common Stock Owned 
Director and Officers        
Yu Yam, Anthony, Chau (1)   0    0%
           
5% Shareholders          
Clark Orient (BVI) Limited   2,020,500    84.861%
ROOM 2906, 29/F
CHINA ONLINE CENTRE
333 LOCKHART ROAD, WANCHAI
HONG KONG
CHINA
       
           
Palatin AG   156,000    6.552%
Beethovenstrasse 43          
8022 Zuerich, Switzerland       
           
All officers and directors as a group (one person)   0    0%

 

(1) The address of Mr. Chau is 40 Wall Street, 28th Floor, New York, NY, 10005

 

17 

 

 

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

 

During the years ended June 30, 2021 and 2020, New York Listing Management Inc. made cash advances of $59,275 and $0, respectively, to the Company for franchise taxes, audit fees and registered agent fees. As of June 30, 2021 and 2020, the Company owed $666 and $0, respectively, in accrued interest to New York Listing Management Inc. The interest for these advances is 8%.

 

During the years ended June 30, 2021 and 2020, our then director, Mr. Heiden made cash advances of $5,959 and $8,324, respectively, to the Company for franchise taxes, audit fees and registered agent fees. As of June 30, 2021 and 2020, the Company owed $0 and $18,456, respectively, in accrued interest to Mr. Heiden. The interest for these advances is 8%. On January 6, 2021, Mr. Heiden has waived the accrued interests and liabilities of the Loan Agreement and two convertible notes (one dated May 1, 2020, the other October 12, 2018) for the total amount of $225,487, the Company has recorded such amount as additional paid in capital accordingly.

 

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

 

The Company’s Board of Directors has appointed M&K CPAS, PLLC as independent public accountant for the fiscal year ended June 30, 2021 and 2020.

 

Principal Accounting Fees

 

The following table presents the fees for professional audit services rendered by M&K CPAS, PLLC for the audit of the Company’s annual financial statements for the years ended June 30, 2021 and 2020, and fees billed for other services rendered by M&K CPAS, PLLC during those periods.

 

   Year Ended 
   June 30, 2021   June 30, 2020 
Audit fees  $6,875   $6,375 
Audit Related Fees   -    - 
Tax Fees          

All Other Fees
   -    - 
In total   6,875    6,375 

 

Effective May 6, 2003, the SEC adopted rules that require that before our independent registered public accounting firm is engaged by us to render any auditing or permitted non-audit related service, the engagement be:

 

  approved by our audit committee; or
  entered into pursuant to preapproval policies and procedures established by the audit committee, provided the policies and procedures are detailed as to the particular service, the audit committee is informed of each service, and such policies and procedures do not include delegation of the audit committee’s responsibilities to management.

 

We do not have an audit committee. Our sole director preapproves all services provided by our independent registered public accounting firm. However, all of the above services and fees were reviewed and approved by the sole board member for the respective services were rendered.

 

18 

 

 

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULE

 

(a) The following documents are filed as exhibits to this report on Form 10-K or incorporated by reference herein. Any document incorporated by reference is identified by a parenthetical reference to the SEC filing that included such document.

 

(1) Financial Statements: See Index to Financial Statements on page F-1.

 

(2) Financial statement schedules are omitted because they are not required or are not applicable or the required information is shown in the financial statements or notes thereto.

 

(3) Exhibits

 

Exhibit No.   Description
3.1   Certificate of Incorporation (incorporated by reference to our Form 10, Exhibit No.3.1, filed with the Securities and Exchange Commission on July 10, 2017)
3.2   Bylaws (incorporated by reference to our Form 10, Exhibit No.3.2, filed with the Securities and Exchange Commission on July 10, 2017)
3.3   Certificate of Amendment dated as of April 21, 2021 and Nevada State Business License dated as of April 22, 2021 (incorporated by reference to our Form 8-K, Exhibit No.3.2, filed with the Securities and Exchange Commission on May 26, 2021.)
3.4   Certificate of Change dated as of April 20, 2021(incorporated by reference to our Form 8-K, Exhibit No.3.2, filed with the Securities and Exchange Commission on May 26, 2021.)
10.1   Stock Purchase Agreement by and among Ecomat, Inc., Clark Orient (BVI) Limited and certain selling stockholders dated January 5, 2021. (incorporated by reference to our Form 8-K, Exhibit 10.01, filed with the Securities and Exchange Commission on January 12, 2021)
31.1*   Certification of Chief Executive Officer pursuant to Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*   Certification of Chief Financial Officer pursuant to Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1**   Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2**   Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 

* Filed herewith.

 

** In accordance with Item 601(b)(32)(ii) of Regulation S-K and SEC Release No. 34-47986, the certifications furnished in Exhibits 32.1 and 32.2 herewith are deemed to accompany this Form 10-K and will not be deemed filed for purposes of Section 18 of the Exchange Act. Such certifications will not be deemed to be incorporated by reference into any filings under the Securities Act or the Exchange Act.

 

ITEM 16. FORM 10-K SUMMARY

 

None.

 

19 

 

 

SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, this report has been signed below by the following person on behalf of the Company and in the capacities and on the date indicated.

 

Ecomax, Inc.  
   
By: /s/ Yu Yam, Anthony, CHAU  
  Yu Yam, Anthony, CHAU  
  Chief Executive Officer and Chairman  
  (Principal Executive Officer)  
  Date: September 28, 2021  

 

By: /s/ Yu Yam, Anthony, CHAU  
  Yu Yam, Anthony, CHAU  
  Chief Financial Officer  
  (Principal Financial and Principal Accounting Officer)  
  Date: September 28, 2021  

 

20 

 

 

ECOMAX, INC.

 

INDEX TO FINANCIAL STATEMENTS

 

Report of Independent Registered Public Accounting Firm F-2
Financial Statements:  
Consolidated Balance Sheets as of June 30, 2021 and 2020 F-3
Consolidated Statements of Operations for the Years Ended June 30, 2021 and 2020 F-4
Consolidated Statements of Changes in Stockholders’ Deficit for the Years Ended June 30, 2021 and 2020 F-5
Consolidated Statements of Cash Flows for the Years Ended June 30, 2021 and 2020 F-6
Notes to Financial Statements F-7

 

F-1
 

 

Report of Independent Registered Public Accounting Firm

 

To the Board of Directors and

Stockholders of Ecomax, Inc.

 

Opinion on the Financial Statements

 

We have audited the accompanying balance sheets of Ecomax, Inc. (the Company) as of June 30, 2021 and 2020, and the related statements of operations, stockholders’ deficit, and cash flows for each of the years in the two-year period ended June 30, 2021, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2021 and 2020, and the results of its operations and its cash flows for each of the years in the two-year period ended June 30, 2021, in conformity with accounting principles generally accepted in the United States of America.

 

Going Concern

 

The accompanying financial states have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company suffered a net loss from operations and has a net capital deficiency, which raises substantial doubt about its ability to continue as a going concern. Management’s plans regarding those matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

Basis for Opinion

 

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

 

Critical Audit Matters

 

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) related to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

 

Due to the net loss for the year, the Company evaluated the need for a going concern.

 

Auditing management’s evaluation of a going concern can be a significant judgement given the fact that the Company uses management estimates on future revenues and expenses which are not able to be substantiated.

 

As discussed in Note 2, the Company has a going concern due to net loss during the year as well as having negative cash flows from operations during the year ended June 30, 2021.

 

To evaluate the appropriateness of the going concern, we examined and evaluated the financial information along with management’s plans to mitigate the going concern and management’s disclosure on going concern.

 

/s/ M&K CPAS, PLLC  
   
We have served as the Company’s auditor since 2016.  
Houston, Texas  
September 28, 2021  

 

F-2
 

 

ECOMAX, INC.

 

BALANCE SHEETS

Balance Sheets as of June 30, 2021 and 2020

 

    June 30,     June 30,  
      2021       2020  
ASSETS                
                 
Current assets:                
Cash   $ -     $ -  
Total current assets     -       -  
                 
TOTAL ASSETS   $ -     $ -  
                 
LIABILITIES AND STOCKHOLDERS’ DEFICIT                
                 
Current liabilities:                
Accounts payable - trade   $ 7,664     $ 3,350  
Advances from - related party     59,725       28,155  
Accrued interest related party     666       18,456  
Accured expenses     17,030          
Accrued expenses - related party     8,000       -  
Convertible notes - related party     -       165,000  
                 
Total current liabilities     93,085       214,961  
                 
Stockholders’ deficit:                
Preferred stock, $0.0001 par value; 50,000,000 authorized; none issued and outstanding at  June 30, 2021 and 2020.     -       -  
Common stock, $0.0001 par value; 450,000,000 shares authorized; 2,380,952 issued and  outstanding at June 30, 2021 and 2020     238       238  
Additional paid-in capital     286,524       61,037  
Accumulated deficit     (379,847 )     (276,236 )
Total stockholders’ deficit     (93,085 )     (214,961 )
                 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)   $ -     $ -  

 

See Summary of Significant Accounting Policies and Notes to Financial Statements.

 

F-3
 

 

ECOMAX, INC.

 

STATEMENTS OF OPERATIONS

 

    Fiscal Year Ended June, 30  
    2021     2020  
                 
Revenues   $ -     $ -  
Cost and expenses:                
General and administrative     95,028       56,673  
Total operating expenses     95,028       56,673  
                 
Other income and expenses                
                 
Interest expenses     8,583       10,788  
Net loss   $ (103,611 )   $ (67,461 )
                 
Per common share - basic and diluted                
Basic and diluted net loss   $ (0.04 )   $ (0.00 )
                 
Weighted average shares                
Outstanding, basic and diluted     2,380,952       2,110,560  

  

See Summary of Significant Accounting Policies and Notes to Financial Statements.

 

F-4
 

 

ECOMAX, INC.

 

STATEMENTS OF STOCKHOLDERS’ DEFICIT

 

   Common stock   Additional         
   Number of   Stated or   Paid-in   Accumulated     
   Shares   Par Value   Capital   Deficit   Total 
Balance at June 30, 2019   1,683,452   $168   $5,307   $(208,775)  $(203,300)
Shares issued upon debt conversion   697,500    70    55,730    -    55,800 
Net loss   -    -    -    (67,461)   (67,461)
Balance at June 30, 2020   2,380,952    238    61,037    (276,236)   (214,961)
              -           
Balance at June 30, 2020   2,380,952   $238   $61,037   $(276,236)  $(214,961)
Cancellation of debt   -    -    225,487    -    225,487 
Net loss   -    -    -    (103,611)   (103,611)
Balance at June 30, 2021   2,380,952    238    286,524    (379,847)   (93,085)

 

See Summary of Significant Accounting Policies and Notes to Financial Statements.

 

F-5
 

 

ECOMAX, INC.

 

STATEMENTS OF CASH FLOWS

 

    Fiscal Year Ended  
    2021     2020  
                 
Cash flows from operating activities:                
Net loss   $ (103,611 )   $ (67,461 )
Adjustments to reconcile net loss to cash used in operating activities:                
Change in operating assets and liabilities:                
Increase (decrease) in accounts payable and accrued liabilities     37,927       59,137  
Net cash used by operating activities     (65,684 )     (8,324 )
                 
Cash flows from financing activities:                
Advances from related party     65,684       8,324  
Net cash provided by financing activities     65,684       8,324  
                 
Change in cash     -       -  
Cash at beginning of period     -       -  
Cash at end of period   $ -     $ -  
                 
Non-cash investing and financing activities:                
Forgiveness of accrued interest, related party   $ 26,373     $ -  
Forgiveness of advances, related party   $ 34,114     $ -  
Forgiveness of convertible short-term notes, related party   $ 165,000     $ -  
Accrued compensation settled with convertible notes payable   $ -     $ 90,000  
Common shares issued upon conversion of debt   $ -     $ 55,800  

 

See Summary of Significant Accounting Policies and Notes to Financial Statements.

 

F-6
 

 

Ecomax, Inc.

 

Background and Significant Accounting Policies

 

June 30, 2021

 

Note 1. The Company and Significant Accounting Policies

 

Ecomax, Inc., formerly Ecomat, Inc. (the “Company”) was incorporated on December 14, 1995 pursuant to the laws of the State of Delaware. On February 9, 2007, the Company completed its change in domicile to Nevada. The Company used to operate a wet-cleaning process which was one of the first environmentally sound solution to current dry-cleaning methods.

 

On April 13, 2021 the Board of Directors (the “Board”) of the Company filed the following with the State of Nevada:

 

  A reverse stock split of common stock of one share for every ten (1-for-10) shares outstanding.
  A change in name from Ecomat, Inc. to Ecomax, Inc.;
  An increase in the authorized number of shares of capital stock from 75,000,000 to 500,000,000, including 450,000,000 shares of common stock and 50,000,000 shares of preferred stock, and;

 

All share and per share information, including earnings per share, in this Form 10-K have been retroactively adjusted to reflect this reverse stock split and certain items in prior period financial statements have been revised to conform to the current presentation.

 

Basis of Presentation:

 

We adopted “fresh-start” accounting as of June 15, 2006 in accordance with procedures specified by AICPA Statement of Position (“SOP”) No. 90-7, “Financial Reporting by Entities in Reorganization under the Bankruptcy Code.

 

Significant Accounting Policies:

 

Use of Estimates:

 

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

 

F-7
 

 

Cash and Cash Equivalents:

 

For financial statement presentation purposes, the Company considers those short-term, highly liquid investments with original maturities of three months or less to be cash or cash equivalents. There were no cash equivalents at June 30, 2021 or 2020.

 

Property and Equipment:

 

New property and equipment are recorded at cost. Property and equipment included in the bankruptcy proceedings and transferred to the Trustee had been valued at liquidation value. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally 5 years. Expenditures for renewals and betterments are capitalized. Expenditures for minor items, repairs and maintenance are charged to operations as incurred. Gain or loss upon sale or retirement due to obsolescence is reflected in the operating results in the period the event takes place.

 

Valuation of Long-Lived Assets:

 

We review the recoverability of our long-lived assets including equipment, goodwill and other intangible assets, when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on our ability to recover the carrying value of the asset from the expected future pre-tax cash flows (undiscounted and without interest charges) of the related operations. If these cash flows are less than the carrying value of such asset, an impairment loss is recognized for the difference between estimated fair value and carrying value. Our primary measure of fair value is based on discounted cash flows. The measurement of impairment requires management to make estimates of these cash flows related to long-lived assets, as well as other fair value determinations.

 

Stock Based Compensation:

 

Stock-based awards are accounted for using the fair value method in accordance with ASC 718, Share-Based Payments. Our primary type of share-based compensation consists of stock options. We use the Black-Scholes option pricing model in valuing options. The inputs for the valuation analysis of the options include the market value of the Company’s common stock, the estimated volatility of the Company’s common stock, the exercise price of the warrants and the risk-free interest rate.

 

F-8
 

 

Fair Value of Financial Instruments:

 

FASB ASC 825, “Financial Instruments,” requires entities to disclose the fair value of financial instruments, both assets and liabilities recognized and not recognized on the balance sheet, for which it is practicable to estimate fair value. FASB ASC 825 defines fair value of a financial instrument as the amount at which the instrument could be exchanged in a current transaction between willing parties. At June 30, 2021 and 2020, the carrying value of certain financial instruments (cash and cash equivalents, accounts payable and accrued expenses.) approximates fair value due to the short-term nature of the instruments or interest rates, which are comparable with current rates.

 

Earnings per Common Share:

 

We compute net income (loss) per share in accordance with ASC 260, Earning per Share. ASC 260 requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing Diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive.

 

Income Taxes:

 

We have adopted ASC 740, Accounting for Income Taxes. Pursuant to ASC 740, we are required to compute tax asset benefits for net operating losses carried forward. The potential benefits of net operating losses have not been recognized in these financial statements because the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward in future years.

 

We must make certain estimates and judgments in determining income tax expense for financial statement purposes. These estimates and judgments occur in the calculation of certain tax assets and liabilities, which arise from differences in the timing of recognition of revenue and expense for tax and financial statement purposes.

 

Deferred tax assets and liabilities are determined based on the differences between financial reporting and the tax basis of assets and liabilities using the tax rates and laws in effect when the differences are expected to reverse. ASC 740 provides for the recognition of deferred tax assets if realization of such assets is more likely than not to occur. Realization of our net deferred tax assets is dependent upon our generating sufficient taxable income in future years in appropriate tax jurisdictions to realize benefit from the reversal of temporary differences and from net operating loss, or NOL, carryforwards. We have determined it more likely than not that these timing differences will not materialize and have provided a valuation allowance against substantially all of our net deferred tax asset.

 

Management will continue to evaluate the realizability of the deferred tax asset and its related valuation allowance. If our assessment of the deferred tax assets or the corresponding valuation allowance were to change, we would record the related adjustment to income during the period in which we make the determination. Our tax rate may also vary based on our results and the mix of income or loss in domestic and foreign tax jurisdictions in which we operate.

 

F-9
 

 

In addition, the calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax regulations. We recognize liabilities for anticipated tax audit issues in the U.S. and other tax jurisdictions based on our estimate of whether, and to the extent to which, additional taxes will be due. If we ultimately determine that payment of these amounts is unnecessary, we will reverse the liability and recognize a tax benefit during the period in which we determine that the liability is no longer necessary. We will record an additional charge in our provision for taxes in the period in which we determine that the recorded tax liability is less than we expect the ultimate assessment to be.

 

ASC 740 which requires recognition of estimated income taxes payable or refundable on income tax returns for the current year and for the estimated future tax effect attributable to temporary differences and carry-forwards. Measurement of deferred income tax is based on enacted tax laws including tax rates, with the measurement of deferred income tax assets being reduced by available tax benefits not expected to be realized.

 

Uncertain Tax Positions:

 

The Financial Accounting Standards Board issued Interpretation No. 48, “Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement No. 109, Accounting for Income Taxes” (“FIN No. 48”) which was effective for the Company on January 1, 2007. FIN No. 48 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under FIN No. 48, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. The tax benefits recognized in the financial statements from such position should be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. FIN No. 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods and disclosure requirements.

 

Our federal and state income tax returns are open for fiscal years ending on or after June 30, 2007. We are not under examination by any jurisdiction for any tax year. At June 30, 2021, we had no material unrecognized tax benefits and no adjustments to liabilities or operations were required under FIN 48.

 

F-10
 

 

Recently Issued Accounting Pronouncements:

 

In January 2017, the FASB issued Accounting Standard Update (ASU) 2017-04, Intangibles-Goodwill and Other (Topic 350) which simplifies the test for goodwill impairment. To address concerns over the cost and complexity of the two-step goodwill impairment test, the amendments in this update remove the second step of the test. An entity will apply a one-step quantitative test and record the amount of goodwill impairment as the excess of a reporting unit’s carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. The new guidance does not amend the optional qualitative assessment of goodwill impairment. This update is effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017.

 

In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value”. ASU 2018-13 removes and modifies existing disclosure requirements on fair value measurement, namely regarding transfers between levels of the fair value hierarchy and the valuation processes for Level 3 fair value measurements. Additionally, ASU 2018-13 adds further disclosure requirements for Level 3 fair value measurements, specifically changes in unrealized gains and losses and other quantitative information. ASU 2018-13 is effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted.

 

In October 2018, the FASB issued ASU 2018-17, Consolidation (Topic 810): Targeted Improvements to the Related Party Guidance for Variable Interest Entities. ASU 2018-17 changes how entities evaluate decision-making fees under the variable interest entity guidance. To determine whether decision-making fees represent a variable interest, an entity considers indirect interests held through related parties under common control on a proportional basis, rather than in their entirety. This guidance will be adopted using a retrospective approach and is effective for the Company on January 1, 2020.

 

In December 2019, the FASB issued ASU 2019-12 - Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. This ASU provides an exception to the general methodology for calculating income taxes in an interim period when a year-to-date loss exceeds the anticipated loss for the year. This update also (1) requires an entity to recognize a franchise tax (or similar tax) that is partially based on income as an income-based tax and account for any incremental amount incurred as a non-income-based tax, (2) requires an entity to evaluate when a step-up in the tax basis of goodwill should be considered part of the business combination in which goodwill was originally recognized for accounting purposes and when it should be considered a separate transaction, and (3) requires that an entity reflect the effect of an enacted change in tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date. The Company adopted this ASU on January 1, 2021.

 

The Company has considered all new accounting pronouncements and has concluded that there are no new pronouncements that may have a material impact on results of operations, financial condition, or cash flows, based on current information.

 

F-11
 

 

Note 2. Going Concern

 

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. The Company has incurred losses, has negative operational cash flows and has no revenues. The future of the Company is dependent upon Management success in its efforts and limited resources to pursue and effect a business combination. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. These financial statements do not include any adjustments that might arise from this uncertainty.

 

If a business combination transaction is not consummated, we do not believe that we could succeed in raising additional capital, from unrelated parties, needed to sustain our operations without some strategic transaction, such as a business combination or merger. If we are unable to consummate such a transaction, we expect that we would need to cease all operations and wind down. Although we are currently evaluating our strategic alternatives with respect to all aspects of our business, we cannot assure you that any actions that we take would raise or generate sufficient capital to fully address the uncertainties of our financial position.

 

Note 3. Income Taxes

 

We have adopted ASC 740 which provides for the recognition of a deferred tax asset based upon the value the loss carry-forwards will have to reduce future income taxes and management’s estimate of the probability of the realization of these tax benefits.

 

We have a current operating loss carry-forward of $379,847. We have determined it more likely than not that these timing differences will not materialize and have provided a valuation allowance against substantially all our net deferred tax asset.

 

Future utilization of currently generated federal and state NOL and tax credit carry forwards may be subject to a substantial annual limitation due to the ownership change limitations provided by the Internal Revenue Code of 1986, as amended and similar state provisions. The annual limitation may result in the expiration of NOL and tax credit carry forwards before full utilization.

 

F-12
 

 

    June 30, 2021     June 30, 2020  
Individual components giving rise to the deferred tax assets are as follows:                
Future tax benefit arising from net operating loss carryovers   $ 79,768     $ 58,010  
Less valuation allowance     (79,768 )     (58,010 )
Total deferred tax asset   $ -       $ - -  

 

The Company is not under examination by any jurisdiction for any tax year. Our federal and state income tax returns are open for fiscal years ending on or after June 30, 2007.

 

Note 4. Stockholders’ Equity

 

Common Stock

 

The certificate of incorporation authorizes the issuance of 450,000,000 shares of common stock, par value $0.0001. All issued shares of common stock are entitled to one vote per share of common stock. As of June 30, 2021, the Company has 2,380,952 shares of common stock issued and outstanding.

 

During the year ended June 30, 2021, the Company did not issue any shares of common stock. During the year ended June 30, 2020, the Company and a note holder, agreed to convert the principal amount of $55,000 and the accrued interest of $5,800 into 6,975,000 shares of restricted common stock.

 

Preferred Stock

 

The certificate of incorporation authorizes the issuance of 50,000,000 shares of preferred stock with a par value of $0.0001 per share. None are issued.

 

Stock Based Compensation

 

There were no grants of employee or non-employee stock or options in either fiscal period ended June 30, 2021 and 2020.

 

F-13
 

 

Note 5. Convertible Note

 

On July 8, 2017, we issued a convertible promissory note for services provided in the principal amount of $50,000 bearing interest at 1% per annum until paid or converted. The conversion price of the note is $0.008 per share. The closing price of the Company’s common stock on July 7, 2017 was $0.08 per share. Interest will be payable upon the maturity date at July 7, 2018. On October 1, 2018, the Company agreed to adjust the interest rate, effective July 1, 2018, on this convertible note from 1% to 8%. On November 19, 2019, WWYD, Inc., the note holder, and the Company agreed to convert the principal amount and the accrued interest of $55,800 into 697,500 shares of restricted common stock. The Company did not record neither gain nor loss in connection with this conversion of debt into equity. As of June 30, 2020, the accrued interest for this convertible note was $0.

 

On October 12, 2018, we issued a $75,000 convertible promissory note to Ivo Heiden. The convertible note bears interest at 8% per annum until paid or converted. The conversion price of the note is $0.34 per share, the closing price of the Company’s common stock on the date of issuance. Interest will be payable upon the maturity date at October 12, 2020. On May 1, 2020, the convertible promissory note was extended to April 30, 2022. On January 6, 2021, the note holder waived interests and liability of the Company and terminated this note. During the years ended June 30, 2021 and 2020 the Company expensed interest of $3,008 and $5,984, respectively, related to this note. As of June 30, 2021, and June 30, 2020, the Company has recorded $0 and $10,241, respectively, in accrued interest with respect to this convertible note. Due to the forgiveness, the Company recorded $88,249, including $75,000 of the principal, and $13,249 of the accrued interests, into the additional paid in capital account, on January 6, 2021.

 

On May 1, 2020, we issued a $90,000 convertible promissory note to Ivo Heiden. The convertible note bears interest at 8% per annum until paid or converted. The conversion price of the note is $0.4 per share, the closing price of the Company’s common stock on the date of issuance. Interest will be payable upon the maturity date at May 1, 2022. On January 6, 2021, the note holder waived interests and liability of the Company and terminated this note. During the years ended June 30, 2021, and 2020 the Company expensed interest of $3,610 and $1,203, respectively, related to this note. As of June 30, 2021 and June 30, 2020, the Company has recorded $0 and $1,203, respectively, in accrued interest with respect to this convertible note. Due to the forgiveness, the Company recorded $94,813, including $90,000 of the principal, and $4,813 of the accrued interests, into the additional paid in capital account, on January 6, 2021.

 

F-14
 

 

On September 1, 2017, we entered into a Loan Agreement with Ivo Heiden, our sole officer and director, under which we receive funding for general operating expenses from time-to-time as needed by the Company. The Loan Agreement bears interest of 8% per annum and shall be due and payable on a date 366 days from the date of the loan. On May 1, 2020, the Loan Agreement was extended to September 1, 2021. On January 6, 2021, the balance of this loan and accrued interests were waived by Ivo Heiden and the Loan Agreement was terminated on the same day. As of June 30, 2021 and June 30, 2020, the outstanding balance on this loan was $0 and $28,155 with accrued interest of $0 and $7,012. During the years ended June 30, 2021 and 2020, the Company borrowed $0 and $8,324, respectively, under this Loan Agreement. During the years ended June 30, 2021 and 2020, we expensed interest of $1,299 and $2,066, respectively, related to this Loan Agreement. Due to the forgiveness, the Company recorded $42,425, including $75,000 of the total loan amount, and $8,311 of the accrued interests, into the additional paid in capital account, on January 6, 2021.

 

In accordance with ASC # 815, Accounting for Derivative Instruments and Hedging Activities, we evaluated the note holder’s non-detachable conversion right provision and liquidated damages clause, contained in the terms governing the Convertible Note to determine whether the features qualify as an embedded derivative instrument at issuance. Such non-detachable conversion right provision and liquidated damages clause did not need to be accounted as derivative financial instruments.

 

Note 6. Related Party Transactions

 

Due to Related Parties:

 

As of June 30, 2021, and June 30, 2020, the advances from our previous CEO was $0 and $28,155, respectively.

 

As of June 30, 2021, and June 30, 2020, accrued interest due to our previous CEO was $0 and $18,456, respectively.

 

On March 31, 2021, we entered into a Loan Agreement with New York Listing Management Inc, a related party of us, under which we receive funding for general operating expenses from time-to-time as needed by the Company. The Loan Agreement bears interest of 8% per annum and shall be due and payable on a date 366 days from the date of the loan. As of June 30, 2021 the outstanding balance on this loan was $59,725 with accrued interest of $666. During the year ended June 30, 2021, the Company borrowed $59,725, under this Loan Agreement. During the year ended June 30, 2021 we expensed interest of $666, related to this Loan Agreement.

 

F-15
 

 

On May 1, 2020, the Company issued a convertible note of $90,000 to our CEO evidencing previously accrued compensation.

 

As of September 30, 2019, the Company owed a $50,000 convertible note and accrued interest of $5,262 to WWYD, Inc., a related party.

 

On November 19, 2019, the Company and WWYD, Inc., a note holder, agreed to convert the principal amount of $55,000 and the accrued interest of $5,800 into 697,500 shares of restricted common stock.

 

During the year ended June 30, 2021 and 2020, the Company issued 0 and 697,500 shares of common stock.

 

As of June 30, 2021, the Company accrued $8,000 as compensation expense, which owned to our CEO for his services during the year ended June 30, 2021.

 

Note 7. Subsequent Events

 

The Company’s management has performed subsequent events procedures through the date the financial statements were available to be issued. There were no other subsequent events requiring adjustment to or disclosure in the consolidated financial statements.

 

F-16

 

 

Exhibit 31.1

 

CERTIFICATION

 

I, Yu Yam, Anthony, CHAU, certify that:

 

1. I have reviewed this report on Form 10-K for the year ended June 30, 2021, of Ecomax, Inc.;

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

 

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

 

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s Board of Directors (or persons performing the equivalent function):

 

a) all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: September 28, 2021

 

/s/ Yu Yam, Anthony, CHAU  
Yu Yam, Anthony, CHAU  
Chief Executive Officer and Chairman  

  

 

 

Exhibit 31.2

 

CERTIFICATION

 

I, Yu Yam, Anthony, CHAU, certify that:

 

1. I have reviewed this report on Form 10-K for the year ended June 30, 2021, of Ecomax, Inc.;

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

 

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

 

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s Board of Directors (or persons performing the equivalent function):

 

a) all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: September 28, 2021

 

/s/ Yu Yam, Anthony, CHAU  
Yu Yam, Anthony, CHAU  
Chief Financial Officer  

 

 

 

 

Exhibit 32.1

  

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

The undersigned hereby certifies, in his capacity as an officer of Ecomax, Inc. (the “Company”), for the purposes of 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of his knowledge:

 

(1) The Annual Report of the Company on Form 10-K for the year ended June 30, 2021, (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

Date: September 28, 2021

 

/s/ Yu Yam, Anthony, CHAU  
Yu Yam, Anthony, CHAU  
Chief Executive Officer    

 

A signed original of this written statement required by Section 906 has been provided to Ecomax, Inc. and will be retained by Ecomax, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

 

 

 

 

Exhibit 32.2

 

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

The undersigned hereby certifies, in his capacity as an officer of Ecomax, Inc. (the “Company”), for the purposes of 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of his knowledge:

 

(1) The Annual Report of the Company on Form 10-K for the year ended June 30, 2021, (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

Date: September 28, 2021

 

/s/ Yu Yam, Anthony, CHAU  
Yu Yam, Anthony, CHAU  
Chief Financial Officer  

 

A signed original of this written statement required by Section 906 has been provided to Ecomax, Inc. and will be retained by Ecomax, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

 

 

 



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