Some of the statements contained in this quarterly report of Ecomax, Inc.
(hereinafter the "Company" or "We") discuss future expectations, contain
projections of our plan of operation or financial condition or state other
forward-looking information. 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.
General Background of the Company
Ecomax, Inc. (formerly known as Ecomat Inc.) 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, all of our properties were transferred
to a United States Trustee and the Company terminated all of its business
operations.
On June 14, 2006, the Bankruptcy Court granted an order approving the sale of
certain assets to Park Avenue Group.
On June 15, 2006 and as a result of a Bankruptcy Court order, Park Avenue Group
appointed Ivo Heiden to the Board of the Company and to serve as its Chief
Executive Officer, Chief Financial Officer, sole director, and Chairman of the
Board.
On February 5, 2007, the Company issued 13,230,000 shares of common stock to Ivo
Heiden, for services provided valued at $2,500. From that date, 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. are 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 the 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.
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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
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 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 the Company, effective on March 11, 2021.
On March 18, 2021, by unanimous written consent of the Board of the Company, the
Board 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 with
respect to the Corporate Actions.
On April 28, 2021, the Company filed an Issuer Notification Form with FINRA
requesting confirmation of the Change of Name.
On May, 2021, the Corporate Actions came into effect; our ticker symbol on OTC
Markets was changed to EMAX and our name was 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.
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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.
The Company is a Blank Check Company
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
therefore 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.
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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.
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.
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; 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 three months ended March 31, 2022 as compared
to the three months ended March 31, 2021
We have not generated any revenues during the three months ended March 31, 2022
and 2021. We had total operating expenses of $22,290 related to general and
administrative expenses during the three months ended March 31, 2022 compared to
$47,132 during the same period in the prior year. We incurred interest expenses
of $2,385 during three months ended March 31, 2022 compared to interest expenses
of $0 during the three months ended March 31, 2021. During the three months
ended March 31, 2022 and 2021, we had a net loss of $24,675 and $47,132,
respectively. The decrease in our net loss was due to combination effect of
increased CEO's compensation and decreased legal expenses.
Results of Operations during the nine months ended March 31, 2022 as compared to
the nine months ended March 31, 2021
We have not generated any revenues during the nine months ended March 31, 2022
and 2021. We had total operating expenses of $68,698 related to general and
administrative expenses during the nine months ended March 31, 2022 compared to
$49,741 during the same period in the prior year. We incurred interest expenses
of $5,829 during the nine months ended March 31, 2022 compared to interest
expenses of $7,917 during the nine months ended March 31, 2021. During the nine
months ended March 31, 2022 and 2021, we had a net loss of $74,527 and $57,658,
respectively. The increase in our net loss was due to the increase of CEO's
compensation and legal expenses.
Liquidity and Capital Resources
At present, the Company has no business operations and no cash resources other
than advances 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 such
time 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 and 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.
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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.
? registered agent fees and accounting fees, and
? investigating, analyzing and consummating an acquisition or business
combination.
On March 31, 2022 and June 30, 2021, we had no current assets. As of March 31,
2022, we had $167,612 in liabilities consisting of accounts payable of $4,500,
advance from a related party of $134,897, accrued interest due to related
parties of $6,495 in one loan agreement, and accrued expenses of $21,720. As of
June 30, 2021, we had $93,085 in liabilities consisting of accounts payable of
$7,664, advance from a related party of $59,725, accrued interest due to related
parties of $666 in one loan agreement, and accrued expenses of $17,030.
During the nine months ended March 31, 2022, we had negative cash flow from
operating activities of $75,172 due to a net loss of $74,527. We financed our
negative cash flow from operations $75,172 in advances from New York Listing
Management Inc., an affiliated party. During the nine months ended March 31,
2021, we had negative cash flow from operating activities of $5,916 due to a net
loss of $57,658. We financed our negative cash flow from operations through
$5,916 in advances from the previous CEO.
The Company currently plans to satisfy its cash requirements for the next 12
months through borrowings from New York Listing Management Inc. 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 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 March 31, 2022, the Company has received a total of $134,897
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 March 31, 2022, and 2021, 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.
Critical Accounting Policies
We prepare our financial statements in conformity with accounting principles
generally accepted by the United States of America ("U.S. GAAP"), which require
us to make judgments, estimates, and assumptions that affect our reported amount
of assets, liabilities, revenue, costs and expenses, and any related
disclosures. Although there were no material changes made to the accounting
estimates and assumptions in the past three years, we continually evaluate these
estimates and assumptions based on the most recently available information, our
own historical experience and various other assumptions that we believe to be
reasonable under the circumstances. Since the use of estimates is an integral
component of the financial reporting process, actual results could differ from
our expectations as a result of changes in our estimates.
We believe that our accounting policies involve a higher degree of judgment and
complexity in their application and require us to make significant accounting
estimates. Accordingly, the policies we believe are the most critical to
understanding and evaluating our financial condition and results of operations
are summarized in "Note 1. The Company and Significant Accounting Policies" in
the notes to our unaudited financial statements.
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Recent Accounting Pronouncements
See "Note 1. The Company and Significant Accounting Policies - Recently Issued
Accounting Pronouncements" in the notes to our unaudited financial statements
for a discussion of recent accounting pronouncements.
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