UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended March 31, 2021
OR
[ ] | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission file number 000-21613
Ecomat, Inc. |
(Exact name of registrant as specified in its charter) |
Nevada | 13-3865026 | |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
40 Wall Street, 28th Floor, New York NY | 10005 | |
(Address of principal executive offices) | (Zip Code) |
(323) 552-9867
(Telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
N/A | N/A | N/A |
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 last 90 days.
Yes [X] 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 [X] 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 filer, “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 | [X] | Smaller reporting company | [X] |
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 is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [X] No [ ]
As of April 29, 2021, there were 23,811,750 shares of common stock, par value $0.0001 per share, outstanding.
TABLE OF CONTENTS
Page | ||
Part I FINANCIAL INFORMATION | ||
Item 1. | Financial Statements | 4 |
Statements of Balance Sheets (unaudited) | 4 | |
Statements of Operations and Comprehensive Income (unaudited) | 5 | |
Statements of Cash Flows (unaudited) | 6 | |
Statements of Stockholders’ Equity (unaudited) | 7 | |
Notes to Financial Statements (unaudited) | 8 | |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 13 |
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 15 |
Item 4. | Controls and Procedures | 15 |
Part II OTHER INFORMATION | ||
Item 1. | Legal Proceedings | 15 |
Item 1A. | Risk Factors | 15 |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 15 |
Item 3. | Defaults Upon Senior Securities | 16 |
Item 4. | Mine Safety Disclosures | 16 |
Item 5. | Other Information | 16 |
Item 6. | Exhibits | 16 |
SIGNATURE |
2 |
FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains certain forward-looking statements (as such term is defined in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934). The statements herein which are not historical reflect our current expectations and projections about the Company’s future results, performance, liquidity, financial condition, prospects and opportunities and are based upon information currently available to us and our management and our interpretation of what we believe to be significant factors affecting our business, including many assumptions about future events. Such forward-looking statements include statements regarding, among other things:
● | our projected revenues, profitability, and other financial metrics; | |
● | our future financing plans; | |
● | our anticipated needs for working capital; | |
● | our ability to expand our sales and marketing capability; | |
● | acquisitions of other companies or assets that we might undertake in the future; | |
● | competition existing today or that will likely arise in the future; | |
● | the impact of the COVID-19 pandemic; and | |
● | other factors discussed elsewhere herein. |
Forward-looking statements, which involve assumptions and describe our future plans, strategies, and expectations, are generally identifiable by use of the words “may,” “should,” “will,” “plan,” “could,” “target,” “contemplate,” “predict,” “potential,” “continue,” “expect,” “anticipate,” “estimate,” “believe,” “intend,” “seek,” or “project” or the negative of these words or other variations on these or similar words. Actual results, performance, liquidity, financial condition and results of operations, prospects and opportunities could differ materially from those expressed in, or implied by, these forward-looking statements as a result of various risks, uncertainties and other factors, including the ability to raise sufficient capital to continue the Company’s operations. These statements may be found under Part I, Item 2— “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” as well as elsewhere in this Quarterly Report on Form 10-Q generally. Actual events or results may differ materially from those discussed in forward-looking statements as a result of various factors, including, without limitation, matters described in this Quarterly Report on Form 10-Q.
In light of these risks and uncertainties, there can be no assurance that the forward-looking statements contained in this Quarterly Report on Form 10-Q will in fact occur.
Potential investors should not place undue reliance on any forward-looking statements. Except as expressly required by the federal securities laws, there is no undertaking to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances or any other reason.
The forward-looking statements in this Quarterly Report on Form 10-Q represent our views as of the date of this Quarterly Report on Form 10-Q. Such statements are presented only as a guide about future possibilities and do not represent assured events, and we anticipate that subsequent events and developments will cause our views to change. You should, therefore, not rely on these forward-looking statements as representing our views as of any date after the date of this Quarterly Report on Form 10-Q.
Potential investors should not make an investment decision based solely on our projections, estimates or expectations.
3 |
PART I.
FINANCIAL INFORMATION
ECOMAT, INC.
Balance Sheets as of March 31, 2021 and June 30, 2020
March 31, 2021 | June 30, 2020 | |||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash | $ | - | $ | - | ||||
Total current assets | - | - | ||||||
TOTAL ASSETS | $ | - | $ | - | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||
Current liabilities: | ||||||||
Accounts payable - trade | $ | 40,091 | $ | 3,350 | ||||
Advances from - related party | 5,916 | 28,155 | ||||||
Accrued interest related party | - | 18,456 | ||||||
Accrued expenses | 1,125 | - | ||||||
Convertible notes - related party | - | 165,000 | ||||||
Total current liabilities | 47,132 | 214,961 | ||||||
Stockholders’ deficit: | ||||||||
Preferred stock, $0.0001 par value; 1,000,000 authorized; none issued and outstanding at March 31, 2021 and June 30, 2020. | - | - | ||||||
Common stock, $0.0001 par value; 74,000,000 shares authorized; 23,811,750 issued and outstanding at March 31, 2021 and June 30, 2020 | 2,381 | 2,381 | ||||||
Additional paid-in capital | 284,381 | 58,894 | ||||||
Accumulated deficit | (333,894 | ) | (276,236 | ) | ||||
Total stockholders’ equity | (47,132 | ) | (214,961 | ) | ||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | $ | - | $ | - |
See Summary of Significant Accounting Policies and Notes to Financial Statements.
4 |
ECOMAT, INC.
STATEMENTS OF OPERATIONS (UNAUDITED)
For the Three and Nine Months ended March 31, 2021 and March 31, 2020
Three Months Ended March 31, | Nine Months Ended March 31, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Revenues | $ | - | $ | - | $ | - | $ | - | ||||||||
Cost and expenses: | ||||||||||||||||
General and administrative | 47,132 | 16,475 | 49,741 | 53,573 | ||||||||||||
Total operating expenses | 47,132 | 16,475 | 49,741 | 53,573 | ||||||||||||
Other income and expenses | ||||||||||||||||
Other income | ||||||||||||||||
Interest expenses | - | 2,040 | 7,917 | 7,552 | ||||||||||||
Net loss | $ | (47,132 | ) | $ | (18,515 | ) | $ | (57,658 | ) | $ | (61,125 | ) | ||||
Per common share - basic and diluted | ||||||||||||||||
Basic and diluted net loss | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | ||||
Weighted average shares | ||||||||||||||||
Outstanding, basic and diluted | 23,811,750 | 23,811,750 | 23,811,750 | 20,210,114 |
See Summary of Significant Accounting Policies and Notes to Financial Statements.
5 |
ECOMAT, INC.
STATEMENTS OF CASH FLOWS (Unaudited)
For the Nine Months ended March 31, 2021 and 2020
Nine Months Ended March 31, | ||||||||
2021 | 2020 | |||||||
Cash flows from operating activities: | ||||||||
Net loss | $ | (57,658 | ) | $ | (61,125 | ) | ||
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 | 51,742 | 53,676 | ||||||
Net cash used by operating activities | (5,916 | ) | (7,449 | ) | ||||
Cash flows from financing activities: | ||||||||
Advances from related party | 5,916 | 7,449 | ||||||
Net cash provided by financing activities | 5,916 | 7,449 | ||||||
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 | |||||||
Common shares issued upon conversion of debt | $ | - | $ | 55,800 |
See Summary of Significant Accounting Policies and Notes to Financial Statements.
6 |
ECOMAT, INC.
STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited)
Common stock | Additional | |||||||||||||||||||
Number of Shares | Stated or Par Value | Paid-in Capital | Accumulated Deficit | Total | ||||||||||||||||
Balance at June 30, 2019 | 16,836,750 | $ | 1,684 | $ | 3,791 | $ | (208,775 | ) | $ | (203,300 | ) | |||||||||
Net loss | - | - | - | (22,822 | ) | (22,822 | ) | |||||||||||||
Balance at September 30, 2019 | 16,836,750 | 1,684 | 3,791 | (231,597 | ) | (226,122 | ) | |||||||||||||
Shares issued upon debt conversion | 6,975,000 | 697 | 55,103 | - | 55,800 | |||||||||||||||
Net loss | - | - | - | (19,788 | ) | (19,788 | ) | |||||||||||||
Balance at December 31, 2019 | 23,811,750 | 2,381 | 58,894 | (251,385 | ) | (190,110 | ) | |||||||||||||
Net loss | - | - | - | (18,515 | ) | (18,515 | ) | |||||||||||||
Balance at March 31, 2020 | 23,811,750 | 2,381 | 58,894 | (269,900 | ) | (208,625 | ) | |||||||||||||
- | ||||||||||||||||||||
Balance at June 30, 2020 | 23,811,750 | $ | 2,381 | $ | 58,894 | $ | (276,236 | ) | $ | (214,961 | ) | |||||||||
Net loss | - | - | - | (5,470 | ) | (5,470 | ) | |||||||||||||
Balance at September 30, 2020 | 23,811,750 | 2,381 | 58,894 | (281,706 | ) | (220,431 | ) | |||||||||||||
Net loss | - | - | - | (5,056 | ) | (5,056 | ) | |||||||||||||
Balance at December 31, 2020 | 23,811,750 | 2,381 | 58,894 | (286,762 | ) | (225,487 | ) | |||||||||||||
Cancellation of debt | - | - | 225,487 | - | 225,487 | |||||||||||||||
Net loss | - | - | - | (47,132 | ) | (47,132 | ) | |||||||||||||
Balance at March 31, 2021 | 23,811,750 | 2,381 | 284,381 | (333,894 | ) | (47,132 | ) |
See Summary of Significant Accounting Policies and Notes to Financial Statements.
7 |
ECOMAT, INC.
FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 2021 AND 2020
Note 1. The Company and Significant Accounting Policies
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.
Basis of Presentation:
The Company 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.
The financial statements presented herein have been prepared by the Company in accordance with the accounting policies described in its June 30, 2020 audited financial statements and should be read in conjunction with the notes to financial statements which appear as part of those financial statements.
The preparation of these financial statements in conformity with accounting principles generally accepted in the United States of America requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, the Company evaluates our estimates, including those related to intangible assets, income taxes, insurance obligations and contingencies and litigation. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other resources. Actual results may differ from these estimates under different assumptions or conditions.
In the opinion of management, the information furnished in these interim financial statements reflects all adjustments necessary for a fair statement of the financial position and results of operations and cash flows as of and for the nine-month periods ended March 31, 2021 and 2020. All such adjustments are of a normal recurring nature. The Financial Statements have been prepared in accordance with the instructions to Form 10-Q and therefore do not include some information and notes necessary to conform with annual reporting requirements.
Recently Issued Accounting Pronouncements
In July 2018, the Financial Accounting Standards Board (the “FASB”) issued ASU No. 2018-10, Codification Improvements to Topic 842, Leases. The amendments in ASU 2018-10 provide additional clarification and implementation guidance on certain aspects of the previously issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”) and have the same effective and transition requirements as ASU 2016-02. Upon the effective date, ASU 2018-10 will supersede the current lease guidance in ASC Topic 840, Leases. Under the new guidance, lessees will be required to recognize for all leases, with the exception of short-term leases, a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis. Concurrently, lessees will be required to recognize a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. ASU 2018-10 is effective for private companies and emerging growth public companies for interim and annual reporting periods beginning after December 15, 2019, with early adoption permitted. The guidance is required to be applied using a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative periods presented in the financial statements. During the nine-month period ended March 31, 2021, the Company assessed the impact this guidance had on its financial statements and concluded that at present ASU No. 2018-10 has no impact on its financial statements.
8 |
In August, 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force). Effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. An entity that elects early adoption must adopt all of the amendments in the same period. The Company has adopted ASU No. 2016-15 and concluded that at present ASU No. 2016-15 has no impact on its statement of cash flows.
In May, 2016, the FASB issued ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients. The amendments in this Update affect the guidance in Accounting Standards Update 2014-09, Revenue from Contracts with Customers (Topic 606), which became effective. The effective date and transition requirements for the amendments in this Update are the same as the effective date and transition requirements for Topic 606 (and any other Topic amended by Update 2014-09). Accounting Standards Update 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, defers the effective date of Update 2014-09 by one year.
In April, 2016, the FASB issued ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing. The amendments in this Update affect the guidance in Accounting Standards Update 2014-09, Revenue from Contracts with Customers (Topic 606), which became effective. The effective date and transition requirements for the amendments in this Update are the same as the effective date and transition requirements in Topic 606 (and any other Topic amended by Update 2014-09). Accounting Standards Update 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, defers the effective date of Update 2014-09 by one year. The Company has adopted ASU No. 2016-12 and ASU No. 2016-10, and concluded that at present ASU No. 2016-12 and ASU No. 2016-10 have no impact on its revenue.
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.
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.
9 |
If a business combination transaction is not consummated, the Company does not believe that it could succeed in raising additional capital, from unrelated parties, needed to sustain its operations without some strategic transaction, such as a business combination or merger. If the Company is unable to consummate such a transaction, it expects that it would need to cease all operations and wind down. Although the Company is currently evaluating its strategic alternatives with respect to all aspects of its business, it cannot assure you that any actions that it takes would raise or generate sufficient capital to fully address the uncertainties of its financial position.
Note 3. Convertible Note
On October 12, 2018, the Company issued a $75,000 convertible promissory note to Ivo Heiden, the then CEO and the then sole officer and director. The convertible note bears interest at 8% per annum until paid or converted. The conversion price of the note is $0.034 per share, the closing price of the Company’s common stock on the date of issuance. Interest would 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 three-month periods ended March 31, 2021 and 2020 the Company expensed interest of $0 and $1,496, respectively, related to this note. As of March 31, 2021, and June 30, 2020, the Company has recorded $0 and $10,241, respectively, in accrued interest with respect to this convertible note.
On May 1, 2020, the Company 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 $0.04 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 three-month period ended March 31, 2021, the Company expensed interest of $0 related to this note. As of March 31, 2021 and June 30, 2020, the Company has recorded $0 and $1,203, respectively, in accrued interest with respect to this convertible note.
10 |
In accordance with ASC # 815, Accounting for Derivative Instruments and Hedging Activities, the Company 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 4. Related Party Transactions
Due to Related Parties:
As of March 31, 2021, and June 30, 2020, the advances from Ivo Heiden, our previous CEO, were $0 and $28,155, respectively.
As of March 31, 2021, and June 30, 2020, accrued interest due to our previous CEO was $0 and $18,456, respectively.
On September 1, 2017, the Company entered into a Loan Agreement (the “Loan Agreement”) with Ivo Heiden, its then sole officer and director, under which the Company received 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 September 1, 2018, the Loan Agreement was extended to September 1, 2019. On June 28, 2019, the Loan Agreement was extended to September 1, 2020. 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 March 31, 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 three-month periods ended March 31, 2021 and 2020, the Company borrowed $0 and $544, respectively, under this Loan Agreement. During the three-months period ended March 31, 2021 and 2020, the Company expensed interest of $0 and $544, respectively, related to this Loan Agreement. During the nine-month periods ended March 31, 2021 and 2020, the Company borrowed $5,959 and $7,449, respectively, under this Loan Agreement. During the nine-months period ended March 31, 2021 and 2020, we expensed interest of $1,299 and $1,528, respectively, related to this Loan Agreement.
On March 31, 2021, the Company entered into a Loan Agreement with New York Listing Management Inc, a related party, under which the Company receives 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 March 31, 2021, the outstanding balance on this loan was $5,916 with accrued interest of $0. During the three-month periods ended March 31, 2021, the Company borrowed $5,916, under this Loan Agreement. During the three-months period ended March 31, 2021 we expensed interest of $0, related to this Loan Agreement.
11 |
During the nine months ended March 31, 2021 and 2020, the Company issued 0 and 6,975,000 shares of common stock.
On January 6, 2021, Ivo 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.
Note 5. Subsequent Events
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,” subject to availability of such name and ticker (the “Change of Name,” together with the Reverse Stock Split and the Increase of Authorized Stock, collectively referred to as 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 U.S. Securities and Exchange Commission (the “SEC”).
On April 13, 2021, the Company filed a definitive information statement on Schedule 14C with SEC.
On April 20, 2021, the Company filed a certificate of change and a certificate of amendment with the Secretary of State of the State of Nevada.
The Corporate Actions, as of the date of this report, have not come into effect yet.
Beyond the events above, 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.
12 |
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Some of the statements contained in this quarterly report of Ecomat, Inc. (hereinafter the “Company”, “We” or the “Registrant”) 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.
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. |
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 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, 2021 as compared to the three months ended March 31, 2020
We have not generated any revenues during the three months ended March 31, 2021 and 2020. We had total operating expenses of $47,132 related to general and administrative expenses during the three months ended March 31, 2021 compared to $16,475 during the same period in the prior year. We incurred interest expense of $0 during three months ended March 31, 2021 compared to interest expense of $2,040 during the three months ended March 31, 2020. During the three months ended March 31, 2021 and 2020, we had a net loss of $47,132 and $18,515, respectively. The increase in our net loss was due to additional legal expenses and compensation paid to CEO.
Results of Operations during the nine months ended March 31, 2021 as compared to the nine months ended March 31, 2020
We have not generated any revenues during the nine months ended March 31, 2021 and 2020. We had total operating expenses of $57,658 related to general and administrative expenses during the nine months ended March 31, 2021 compared to $61,125 during the same period in the prior year. We incurred interest expense of $7,917 during nine months ended March 31, 2021 compared to interest expense of $7,552 during the nine months ended March 31, 2020. During the nine months ended March 31, 2021 and 2020, we had a net loss of $57,658 and $61,125, respectively. The decrease in our net loss was due to decreased officer compensation.
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Liquidity and Capital Resources
As of the date of this report, the Company has no business operations and no cash resources other than advances provided by our then CEO and New York Listing Management Inc., a related party. On March 31, 2021, we entered into a Loan Agreement with New York Listing Management Inc., under which we receive funding for general operating expenses from time-to-time as needed by the Company. New York Listing Management Inc. 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 New York Listing Management Inc. If we require additional financing, we cannot predict whether equity or debt financing will become available at terms acceptable to us, if at all. At present, the Company has no financial resources to pay for such services and may be required to issue restricted shares in lieu of cash or, in the alternative, issue debt instruments evidencing financial obligations if and when they arise.
During the next 12 months we anticipate incurring costs related to:
● | filing of Exchange Act reports. |
● | registered agent fees and accounting fees, legal fees, and |
● | investigating, analyzing and consummating an acquisition or business combination. |
On March 31, 2021 and June 30, 2020, we have had no current assets. As of March 31, 2021, we had $47,132 in liabilities consisting of accounts payable of $40,091, advance from a related party of $5,916, accrued interest due to related parties of $0 and $0 in convertible notes. 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.
During the nine months ended March 31, 2021, we had negative cash flow from operating activities of $47,132 due to a net loss of $57,658. We financed our negative cash flow from operations through $5,916 in advances from one related party and a total of $225,485 debt and interests waived by lenders. During the nine months ended March 31, 2020, we had negative cash flow from operating activities of $7,449 due to a net loss of $61,125 offset by an increase of $53,676 in accounts payable and accrued liabilities. We financed our negative cash flow from operations through $7,449 in advances from our then 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 September 1, 2017, we formalized a verbal funding agreement and entered into a Loan Agreement with Ivo Heiden, our former 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 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 the Loan Agreement. On June 28, 2019, the Loan Agreement was extended to September 1, 2020 and further on May 1, 2020, the Loan Agreement was extended again 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, the lender has 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., one related party, under which we 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 the Loan Agreement. As of March 31, 2021, the Company has received a total of $5,916 under this Loan Agreement.
The Company intends to repay these advances 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 have unqualified audit opinion for the years ended June 30, 2020 and 2019 with an explanatory paragraph on going concern.
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Off-Balance Sheet Arrangements
The Company has not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties. In addition, it has not entered into any derivative contracts that are indexed to its own shares and classified as stockholders’ equity, or that are not reflected in its financial statements. Furthermore, the Company does not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. Moreover, the Company does not have any variable interest in any unconsolidated entity that it provides financing, liquidity, market risk or credit support to or engages in hedging or research and development services with the Company.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
As a small reporting company, we are not required to provide the information required by this item.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of disclosure controls and procedures.
As of March 31, 2021, the Company’s chief executive officer and chief financial 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 period ended March 31, 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.
Changes in internal controls.
During the quarterly period covered by this report, no changes occurred in our internal control over financial reporting that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
PART II
OTHER INFORMATION
Other than ordinary routine litigation (of which the Company is not currently involved), the Company knows of no material, existing or pending legal proceedings against it, nor is the Company involved as a plaintiff in any material proceeding or pending litigation, and there are no proceedings in which any of the Company’s directors or officers is an adverse party or has a material interest adverse to the Company.
As a smaller reporting company, we are not required to provide the information otherwise required by this Item.
ITEM 2. UNREGISTERED SALE OF EQUITY SECURITIES AND USE OF PROCEEDS.
None.
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ITEM 3. DEFAULT UPON SENIOR SECURITIES.
None.
ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable.
None.
* | Filed herewith. |
** | In accordance with Item 601(b)(32)(ii) of Regulation S-K and SEC Release No. 34-47986, the certification furnished in Exhibit 32 herewith is deemed to accompany this Quarterly Report on Form 10-Q and will not be deemed filed for purposes of Section 18 of the Exchange Act. Such certification will not be deemed to be incorporated by reference into any filings under the Securities Act or the Exchange Act. |
(1) | Incorporated by reference from Exhibit 3.1 and 3.1(a) to the Company’s Form 10-12G filed with the Securities and Exchange Commission on July 10, 2017. |
(2) | Incorporated by reference from Exhibit 3.2 to the Company’s Form 10-12G filed with the Securities and Exchange Commission on July 10, 2017. |
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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 registrant and in the capacities and on the date indicated.
ECOMAT, INC. | ||
By: | /s/ Yu Yam, Anthony, Chau | |
Name: | Yu Yam, Anthony, Chau | |
April 29, 2021 | Title: | President, Sole Director, Chief Executive Officer |
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Exhibit 4.1
DESCRIPTION OF THE REGISTRANT’S SECURITIES
REGISTERED PURSUANT TO SECTION 12 OF THE
SECURITIES EXCHANGE ACT OF 1934
As of March 31, 2021, Ecomat, Inc., a Nevada corporation (the “Company” or “we” or “us” or “our”) had one class of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”): common stock, $0.0001 par value per share. The following is a description of the rights of common stock and related provisions of the Company’s Amended Articles of Incorporation (the “Articles”) and Bylaws (the “Bylaws”). This description is qualified in its entirety by, and should be read in conjunction with, the Articles, Bylaws and applicable Nevada law.
Authorized Capital Stock
The Company’s authorized capital stock consists of 74,000,000 shares of common stock, par value $0.0001 and 1,000,000 shares of preferred stock, par value $0.0001.
Common Stock
All of the outstanding shares of the Company’s common stock are fully paid and nonassessable. No shares of preferred stock are issued.
Our Certificate of Incorporation authorize the issuance of 74,000,000 shares of common stock, par value $0.0001. Our holders of shares of common stock are entitled to one vote for each share on all matters to be voted on by the shareholders. Holders of common stock do not have cumulative voting rights. Holders of common stock are entitled to share ratably in dividends, if any, as may be declared from time to time by the board of directors in its discretion from legally available funds. In the event of a liquidation, dissolution or winding up of the Company, the holders of common stock are entitled to share pro rata all assets remaining after payment in full of all liabilities. Holders of common stock have no preemptive rights to purchase the Company’s common stock. There are no conversion or redemption rights or sinking fund provisions with respect to the common stock.
Dividends
Dividends, if any, will be contingent upon our revenues and earnings, if any, capital requirements and financial conditions. The payment of dividends, if any, will be within the discretion of our board of directors. We intend to retain earnings, if any, for use in our business operations and accordingly, the board of directors does not anticipate declaring any dividends prior to a business combination transaction, nor can there be any assurance that any dividends will be paid following any business combination.
Preferred Stock
Our Certificate of Incorporation authorize the issuance of 1,000,000 shares of preferred stock, par value $0.0001, and vest in the Company’s board of directors the authority to establish series of unissued preferred shares by the designations, preferences, limitations and relative rights, including voting rights, of the preferred shares of any series so established to the same extent that such designations, preferences, limitations, and relative rights could have been fully stated in the Articles of Incorporation, and in order to establish a series, the board of directors shall adopt a resolution setting forth the designation of the series and fixing and determining the designations, preferences, limitations and relative rights, including voting rights, thereof or so much thereof as shall not be fixed and determined by the Certificate of Incorporation.
The board of directors may authorize the issuance of preferred shares without further action by our shareholders and any preferred shares would have priority over the common stock with respect to dividend or liquidation rights. Any issuance of preferred shares may have the effect of delaying, deferring or preventing a change in control of the Company and may contain voting and other rights superior to common stock. As a result, the issuance of preferred shares may adversely affect the relative rights of the holders of common stock.
Articles of Incorporation and Bylaws
In the event that a few stockholders end up owning a significant portion of our issued and outstanding common stock, the lack of cumulative voting would make it more difficult for other stockholders to replace our Board of Directors or for a third party to obtain control of us by replacing our Board of Directors. Our articles of incorporation and bylaws do not contain any explicit provisions that would have an effect of delaying, deferring or preventing a change in control of us.
Transfer Agent and Registrar
The transfer agent of our common stock is Standard Registrar and Transfer Company, Inc., 440 East 400 South, Suite 200 Salt Lake City, UT 84111, Telephone: 801-571-8844
Listing
Our common stock is quoted on the OTCQB under the symbol “ECMT.”
Exhibit 10.1
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the “Agreement”), is entered into as of March 11, 2021, by and between Ecomat, Inc., a Nevada corporation (the “Corporation”), and Yu Yam, Anthony, Chau, an individual (the “Executive”). Except with respect to the direct employment of the Executive by the Corporation, the term “Corporation” as used herein with respect to all obligations of the Executive hereunder shall be deemed to include the Corporation and all of its subsidiaries and affiliated entities (collectively, the “Group”).
RECITALS
A. The Corporation desires to employ the Executive as its Chief Executive Officer and Chief Financial Officer and to assure itself of the services of the Executive during the term of Employment (as defined below).
B. The Executive desires to be employed by the Corporation as its Chief Executive Officer and Chief Financial Officer during the term of Employment and upon the terms and conditions of this Agreement.
AGREEMENT
The parties hereto agree as follows:
1. | POSITION |
The Executive hereby accepts positions of Chief Executive Officer and Chief Financial Officer (the “Employment”) of the Corporation.
2. | TERM |
Subject to the terms and conditions of this Agreement, the initial term of the Employment shall be three (3) years, effective as of the date of this Agreement (the “Effective Date”), unless terminated earlier pursuant to the terms of this Agreement. The Employment will be renewed automatically for additional one-year terms if neither the Corporation nor the Executive provides a notice of termination of the Employment to the other party or otherwise proposes to re-negotiate the terms of the Employment with the other party within three months prior to the expiration of the applicable term.
3. | DUTIES AND RESPONSIBILITIES |
(a) | The Executive’s duties at the Corporation will include all jobs assigned by the Board of Directors (the “Board”). |
(b) | The Executive shall devote all of his working time, attention and skills to the performance of his duties at the Corporation and shall faithfully and diligently serve the Corporation in accordance with this Agreement, the Articles of Incorporation and Bylaws of the Corporation, as amended and restated from time to time (the “Charter Documents”), and the guidelines, policies and procedures of the Corporation approved from time to time by the Board. |
(c) | The Executive shall use his best efforts to perform his duties hereunder. |
4. | NO BREACH OF CONTRACT |
The Executive hereby represents to the Corporation that: (i) the execution and delivery of this Agreement by the Executive and the performance by the Executive of the Executive’s duties hereunder shall not constitute a breach of, or otherwise contravene, the terms of any other agreement or policy to which the Executive is a party or otherwise bound, except for agreements entered into by and between the Executive and any member of the Group pursuant to applicable law, if any; (ii) that the Executive has no information (including, without limitation, confidential information and trade secrets) relating to any other person or entity which would prevent, or be violated by, the Executive entering into this Agreement or carrying out his duties hereunder; (iii) that the Executive is not bound by any confidentiality, trade secret or similar agreement (other than this) with any other person or entity except for other member(s) of the Group, as the case may be.
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5. | Intentionally Omitted |
6. | COMPENSATION AND BENEFITS |
(a) | Base Salary. The Executive shall receive a base salary of $6,000 per month, which can be paid in cash or by shares of the Corporation’s common stock to be issued by the Corporation to the Executive, with such amount, manner, and schedule to be determined by the parties. Such compensation is subject to annual review and adjustment by the Corporation. |
(b) | Bonus. The Executive shall be eligible for Bonuses determined by the Board. |
(c) | Equity Incentives. To the extent the Corporation adopts and maintains a share incentive plan, the Executive will be eligible to participate in such plan pursuant to the terms thereof as determined by the Board. |
(d) | Benefits. The Executive is eligible for participation in any standard employee benefit plan of the Corporation that currently exists or may be adopted by the Corporation in the future, including, but not limited to, any retirement plan, life insurance plan, health insurance plan and travel/holiday plan. |
(e) | Expenses. The Executive shall be entitled to reimbursement by the Corporation for all reasonable ordinary and necessary travel and other expenses incurred by the Executive in the performance of his duties under this Agreement; provided that he properly accounts for such expenses in accordance with the Corporation’s policies and procedures. |
7. | TERMINATION OF THE AGREEMENT |
(a) | By the Corporation. |
(i) For Cause. The Corporation may terminate the Employment for cause, at any time, without notice or remuneration (unless notice or remuneration is specifically required by applicable law, in which case notice or remuneration will be provided in accordance with applicable law), if:
(1) the Executive is convicted or pleads guilty to a felony or to an act of fraud, misappropriation or embezzlement, | |
(2) the Executive has been grossly negligent or acted dishonestly to the detriment of the Corporation, | |
(3) the Executive has engaged in actions amounting to willful misconduct or failed to perform his duties hereunder and such failure continues after the Executive is afforded a reasonable opportunity to cure such failure; or | |
(4) the Executive violates Section 8 of this Agreement. | |
Upon termination for cause, the Executive shall be entitled to the amount of base salary earned and not paid prior to termination. However, the Executive will not be entitled to receive payment of any severance benefits or other amounts by reason of the termination, and the Executive’s right to all other benefits will terminate, except as required by any applicable law. |
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(ii) For death and disability. The Corporation may also terminate the Employment, at any time, without notice or remuneration (unless notice or remuneration is specifically required by applicable law, in which case notice or remuneration will be provided in accordance with applicable law), if:
(1) the Executive has died, or | |
(2) the Executive has a disability which shall mean a physical or mental impairment which, as reasonably determined by the Corporation, renders the Executive unable to perform the essential functions of his employment with the Corporation, with or without reasonable accommodation, for more than 120 days in any 12-month period, unless a longer period is required by applicable law, in which case that longer period would apply. | |
Upon termination for death or disability, the Executive shall be entitled to the amount of base salary earned and not paid prior to termination. However, the Executive will not be entitled to receive payment of any severance benefits or other amounts by reason of the termination, and the Executive’s right to all other benefits will terminate, except as required by any applicable law. |
(iii) Without Cause. The Corporation may terminate the Employment without cause, at any time, upon one-month prior written notice. Upon termination without cause, the Executive shall be entitled to the amount of base salary earned and not paid prior to termination. However, the Executive will not be entitled to receive payment of any severance benefits or other amounts, and the Executive’s right to all other benefits will terminate, except as required by any applicable law.
(b) | By the Executive. The Executive may resign prior to the expiration of the Agreement and may terminate the Employment at any time with a two-month prior written notice to the Corporation. Upon termination, the Executive shall be entitled to the amount of base salary earned and not paid prior to termination. However, the Executive will not be entitled to receive payment of any severance benefits or other amounts, and the Executive’s right to all other benefits will terminate, except as required by any applicable law. |
(c) | Notice of Termination. Except otherwise provided, any termination of the Executive’s employment under this Agreement shall be communicated by written notice of termination from the terminating party to the other party. The notice of termination shall indicate the specific provision(s) of this Agreement relied upon in effecting the termination. |
8. | CONFIDENTIALITY AND NON-DISCLOSURE |
(a) | Confidentiality and Non-disclosure. The Executive hereby agrees at all times during the term of the Employment and after his termination, to hold in the strictest confidence, and not to use, except for the benefit of the Corporation, or to disclose to any person, corporation or other entity without prior written consent of the Corporation, any Confidential Information. The Executive understands that “Confidential Information” means any proprietary or confidential information of the Corporation, its affiliates, or their respective clients, customers or partners, including, without limitation, technical data, trade secrets, research and development information, product plans, services, customer lists and customers, supplier lists and suppliers, software developments, inventions, processes, formulas, technology, designs, hardware configuration information, personnel information, marketing, finances, information about the suppliers, joint ventures, franchisees, distributors and other persons with whom the Corporation does business, information regarding the skills and compensation of other employees of the Corporation or other business information disclosed to the Executive by or obtained by the Executive from the Corporation, its affiliates, or their respective clients, customers or partners, either directly or indirectly, in writing, orally or otherwise, if specifically indicated to be confidential or reasonably expected to be confidential. Notwithstanding the foregoing, Confidential Information shall not include information that is generally available and known to the public through no fault of the Executive. |
(b) | Corporation Property. The Executive understands that all documents (including computer records, facsimile and e-mail) and materials created, received or transmitted in connection with his work or using the facilities of the Corporation are property of the Corporation and subject to inspection by the Corporation at any time. Upon termination of the Executive’s employment with the Corporation (or at any other time when requested by the Corporation), the Executive will promptly deliver to the Corporation all documents and materials of any nature pertaining to his work with the Corporation and will provide written certification of his compliance with this Agreement. Under no circumstances will the Executive have, following his termination, in his possession any property of the Corporation, or any documents or materials or copies thereof containing any Confidential Information. |
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(c) | Former Employer Information. The Executive agrees that he has not and will not, during the term of his employment, (i) improperly use or disclose any proprietary information or trade secrets of any former employer or other person or entity with which the Executive has an agreement or duty to keep in confidence information acquired by Executive, if any, or (ii) bring into the premises of the Corporation any document or confidential or proprietary information belonging to such former employer, person or entity unless consented to in writing by such former employer, person or entity. The Executive will indemnify the Corporation and hold it harmless from and against all claims, liabilities, damages and expenses, including reasonable attorneys’ fees and costs of suit, arising out of or in connection with any violation of the foregoing. |
(d) | Third Party Information. The Executive recognizes that the Corporation may have received, and in the future may receive, from third parties their confidential or proprietary information subject to a duty on the Corporation’s part to maintain the confidentiality of such information and to use it only for certain limited purposes. The Executive agrees that the Executive owes the Corporation and such third parties, during the Executive’s employment by the Corporation and thereafter, a duty to hold all such confidential or proprietary information in the strictest confidence and not to disclose it to any person or firm and to use it in a manner consistent with, and for the limited purposes permitted by, the Corporation’s agreement with such third party. |
This Section 8 shall survive the termination of this Agreement for any reason. In the event the Executive breaches this Section 8, the Corporation shall have right to seek remedies permissible under applicable law.
9. | WITHHOLDING TAXES |
Notwithstanding anything else herein to the contrary, the Corporation may withhold (or cause there to be withheld, as the case may be) from any amounts otherwise due or payable under or pursuant to this Agreement such national, provincial, local or any other income, employment, or other taxes as may be required to be withheld pursuant to any applicable law or regulation.
10. | ASSIGNMENT |
This Agreement is personal in its nature and neither of the parties hereto shall, without the consent of the other, assign or transfer this Agreement or any rights or obligations hereunder; provided, however, that (i) the Corporation may assign or transfer this Agreement or any rights or obligations hereunder to any member of the Group without such consent, and (ii) in the event of a Change of Control Transaction, this Agreement shall, subject to the provisions hereof, be binding upon and inure to the benefit of such successor and such successor shall discharge and perform all the promises, covenants, duties, and obligations of the Corporation hereunder.
11. | SEVERABILITY |
If any provision of this Agreement or the application thereof is held invalid, the invalidity shall not affect other provisions or applications of this Agreement which can be given effect without the invalid provisions or applications and to this end the provisions of this Agreement are declared to be severable.
12. | ENTIRE AGREEMENT |
This Agreement constitutes the entire agreement and understanding between the Executive and the Corporation regarding the terms of the Employment and supersedes all prior or contemporaneous oral or written agreements concerning such subject matter, including any prior agreements between the Executive and a member of the Group. The Executive acknowledges that he has not entered into this Agreement in reliance upon any representation, warranty or undertaking which is not set forth in this Agreement. Any amendment to this Agreement must be in writing and signed by the Executive and the Corporation.
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13. | GOVERNING LAW; JURISDICTION |
This Agreement shall be governed by and construed in accordance with the laws of the State of New York and each of the parties irrevocably consents to the jurisdiction and venue of the federal and state courts located in New York.
14. | AMENDMENT |
This Agreement may not be amended, modified or changed (in whole or in part), except by a formal, definitive written agreement expressly referring to this Agreement, which agreement is executed by both of the parties hereto.
15. | WAIVER |
Neither the failure nor any delay on the part of a party to exercise any right, remedy, power or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege preclude any other or further exercise of the same or of any right, remedy, power or privilege, nor shall any waiver of any right, remedy, power or privilege with respect to any occurrence be construed as a waiver of such right, remedy, power or privilege with respect to any other occurrence. No waiver shall be effective unless it is in writing and is signed by the party asserted to have granted such waiver.
16. | NOTICES |
All notices, requests, demands and other communications required or permitted under this Agreement shall be in writing and shall be deemed to have been duly given and made if (i) delivered by hand, (ii) otherwise delivered against receipt therefor, or (iii) sent by a recognized courier with next-day or second-day delivery to the last known address of the other party.
17. | COUNTERPARTS |
This Agreement may be executed in any number of counterparts, each of which shall be deemed an original as against any party whose signature appears thereon, and all of which together shall constitute one and the same instrument. This Agreement shall become binding when one or more counterparts hereof, individually or taken together, shall bear the signatures of all of the parties reflected hereon as the signatories.
Photographic copies of such signed counterparts may be used in lieu of the originals for any purpose.
18. | NO INTERPRETATION AGAINST DRAFTER |
Each party recognizes that this Agreement is a legally binding contract and acknowledges that it, he or she has had the opportunity to consult with legal counsel of choice. In any construction of the terms of this Agreement, the same shall not be construed against either party on the basis of that party being the drafter of such terms.
[Remainder of this page has been intentionally left blank.]
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IN WITNESS WHEREOF, this Agreement has been executed as of the date first written above.
Ecomat, Inc. | ||
By: | /s/ Yang Gui | |
Name: | Yang Gui | |
Title: | Chief Executive Officer |
Executive | ||
Signature: | /s/ Yu Yam, Anthony, Chau | |
Name: | Yu Yam, Anthony, Chau |
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Exhibit 10.2
THIS LOAN AGREEMENT RELATES TO CREDIT BY LENDER TO ECOMAT, INC., A NEVADA CORPORATION.
ECOMAT, INC. LOAN AGREEMENT DATED: MARCH 31st, 2021
TO: Ecomat, Inc.
1. The Loan
1.1 New York Listing Management Inc, with an address at 1 Rockefeller Plaza, 10th Fl, New York, NY 10020 (the “Lender”), hereby agrees to lend to Ecomat, Inc., a Nevada corporation (the “Company”), with an office located at 40 Wall St Fl 28, New York, NY 10005, up to Two hundred thousand (US$200,000) US dollars (the “Loan”) pursuant to the terms of this loan agreement (the “Loan Agreement”). The Loan, which shall bear interest at the rate of one (8%) percent per annum and shall be due and payable on a date three hundred sixty-six (365) days from the date of the Loan, shall be funded by the Lender from time-to-time, as needed for the Company’s operating expenses.
1.2 Subject to the terms hereof, this Loan Agreement will be effective upon receipt and acceptance by the Company as provided in Section 2 below.
2. Loan Funding
The Company and the Lender understand and agree that the Loan proceeds shall be funded on an “as-needed” basis, with the schedule to be determined by the Lender and the Company’s management.
3. Documents/Deliveries Required from Lender
3.1 The Lender will complete, sign and return to the Company an executed copy of this Loan Agreement.
3.2 The Lender will Fund the Loan proceeds as provided in Section 2 above.
4. Acknowledgements of Lender
The Lender acknowledges and agrees that: (i) it is the related party of the owner of 84.85% of the common stock of the Company; and
(ii) the Lender is an “affiliate” of the Company as that term is defined under the Act and, as such, the Lender is aware of the merits and risks associate with the Loan.
5. Representations, Warranties and Covenants of the Lender
5.1 The Lender hereby represents and warrants to and covenants with the Company (which representations, warranties and covenants will survive the execution and delivery of this Loan Agreement) that:
(a) the Lender has the legal capacity and competence to enter into and execute this Loan Agreement and to take all actions required pursuant hereto and, if the Lender is a corporation, it is duly incorporated and validly subsisting under the laws of the State of New York and all necessary approvals have been obtained to authorize execution and performance of this Loan Agreement on behalf of the Lender;
(b) the entering into of this Loan Agreement and the transactions contemplated hereby do not result in the violation of any of the terms and provisions of any law applicable to, or the corporate documents of, the Lender or of any agreement, written or oral, to which the Lender may be a party or by which the Lender is or may be bound; and
(c) the Lender is a U.S. Person;
5.2 The Lender will, if requested by the Company, deliver to the Company a certificate or opinion of local counsel which will confirm the matters referred to in of Section 5.1 above to the satisfaction of the Company, acting reasonably.
6. Acknowledgement and Waiver
6.1 The Lender hereby waives, to the fullest extent permitted by law, any rights of withdrawal, rescission or compensation for damages to which the Lender might be entitled in connection with this Loan Agreement.
6.2 The Lender acknowledges and agrees that all costs and expenses incurred by the Lender (including any fees and disbursements of any special counsel retained by the Lender) relating to the Loan will be borne by the Lender.
7. Governing Law
This Loan Agreement is governed by the laws of the State of New York.
8. Survival
This Loan Agreement, including without limitation the representations, warranties and covenants contained herein, will survive and continue in full force and effect and be binding upon the parties hereto notwithstanding the completion of the Loan by the Lender pursuant to the Loan Agreement.
9. Assignment
This Loan Agreement is not transferable or assignable except with the prior written consent of the Company, which consent will not be unreasonably denied, provided that any such transfer or assignment is made in compliance with Regulations under the Act.
10. Severability
The invalidity or unenforceability of any particular provision of this Loan Agreement will not affect or limit the validity or enforceability of the remaining provisions of this Loan Agreement.
11. Entire Agreement
Except as expressly provided in this Loan Agreement and in the agreements, instruments and other documents contemplated or provided for herein, this Loan Agreement contains the entire agreement between the parties with respect to the Loan and there are no other terms, conditions, representations or warranties, whether expressed, implied, oral, written, by statute or common law, by the Company or anyone else.
12. Notices
All notice and other communications hereunder will be in writing and will be deemed to have been duly given if mailed or transmitted by any standard form of telecommunications. Notice to the Lender and/or the Company will be directed at the addresses set forth above unless another address will be provided by the Lender or the Company.
13. Counterparts and Electronic Means
This Loan Agreement may be executed in any number of counterparts, each of which, when so executed and delivered, will constitute and original and all of which together will constitute one instrument. Delivery of an executed copy of the Loan Agreement by electronic facsimile transmission or other means of electronic communication capable of producing a printed copy will be deemed to be execution and delivery f this Loan Agreement as of the date hereinafter set forth.
14. Delivery Instructions
14.1 The Lender hereby directs the Company to deliver the acceptance of the Loan Agreement to: New York Listing Management Inc1 Rockefeller Plaza, 10th Fl, New York NY 10020
14.2 The Lender hereby directs the Company to cause the Loan to be registered on the books of the Company in the name of the Lender at the address set forth in section 14.1 above.
IN WITNESS WHEREOF, the Lender has duly executed this Loan Agreement as of the date of acceptance by the Company.
Name of Lender: | |
NEW YORK LISTING MANAGEMENT INC | |
/s/ Max P. Chen | |
Max P. Chen |
The Loan Agreement and the Loan are hereby accepted by Ecomat, Inc. DATED:
New York, NY this 31st day of March 2021.
ECOMAT, INC. | |
/s/ Yu Yam, Anthony, Chau | |
Yu Yam, Anthony, Chau | |
CEO and Chairman |
Exhibit 31
CERTIFICATION
I, Yu Yam, Anthony, Chau, certify that:
1. I have reviewed this quarterly report of Ecomat, 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 issuer as of, and for, the periods presented in this report;
4. I am 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 issuer 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 issuer, 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 issuer’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 issuer’s internal control over financial reporting that occurred during the issuer’s most recent fiscal quarter (the issuer’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the issuer’s internal control over financial reporting; and
5. I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the issuer’s auditors and the audit committee of the issuer’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the issuer’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 issuer’s internal control over financial reporting.
Date: April 29, 2021
/s/ Yu Yam, Anthony, Chau | |
Yu Yam, Anthony, Chau | |
CEO and CFO |
Exhibit 32
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 CEO and CFO of Ecomat, 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 Quarterly Report of the Company on Form 10-Q for the period ended March 31, 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: April 29, 2021
/s/ Yu Yam, Anthony, Chau | |
Yu Yam, Anthony, Chau | |
CEO and CFO |
The foregoing certification is being furnished solely pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code) and is not being filed as part of a separate disclosure document.
Document and Entity Information - shares |
9 Months Ended | |
---|---|---|
Mar. 31, 2021 |
Apr. 29, 2021 |
|
Cover [Abstract] | ||
Entity Registrant Name | ECOMAT INC | |
Entity Central Index Key | 0001008653 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2021 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --06-30 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business Flag | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | true | |
Entity Common Stock, Shares Outstanding | 23,811,750 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2021 |
Balance Sheets - USD ($) |
Mar. 31, 2021 |
Jun. 30, 2020 |
---|---|---|
Current assets: | ||
Cash | ||
Total current assets | ||
TOTAL ASSETS | 0 | 0 |
Current liabilities: | ||
Accounts payable - trade | 40,091 | 3,350 |
Advances from - related party | 5,916 | 28,155 |
Accrued interest related party | 18,456 | |
Accrued expenses | 1,125 | |
Convertible notes - related party | 165,000 | |
Total current liabilities | 47,132 | 214,961 |
Stockholders' deficit: | ||
Preferred stock, $0.0001 par value; 1,000,000 authorized; none issued and outstanding at March 31, 2021 and June 30, 2020. | ||
Common stock, $0.0001 par value; 74,000,000 shares authorized; 23,811,750 issued and outstanding at March 31, 2021 and June 30, 2020 | 2,381 | 2,381 |
Additional paid-in capital | 284,381 | 58,894 |
Accumulated deficit | (333,894) | (276,236) |
Total stockholders' equity | (47,132) | (214,961) |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | $ 0 | $ 0 |
Balance Sheets (Parenthetical) - $ / shares |
Mar. 31, 2021 |
Jun. 30, 2020 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 74,000,000 | 74,000,000 |
Common stock, shares issued | 23,811,750 | 23,811,750 |
Common stock, shares outstanding | 23,811,750 | 23,811,750 |
Statements of Operations (Unaudited) - USD ($) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
Mar. 31, 2021 |
Mar. 31, 2020 |
|
Income Statement [Abstract] | ||||
Revenues | ||||
Cost and expenses: | ||||
General and administrative | 47,132 | 16,475 | 49,741 | 53,573 |
Total operating expenses | 47,132 | 16,475 | 49,741 | 53,573 |
Other income and expenses | ||||
Interest expenses | 2,040 | 7,917 | 7,552 | |
Net loss | $ (47,132) | $ (18,515) | $ (57,658) | $ (61,125) |
Per common share - basic and diluted | ||||
Basic and diluted net loss | $ (0.00) | $ (0.00) | $ (0.00) | $ (0.00) |
Weighted average shares | ||||
Outstanding, basic and diluted | 23,811,750 | 23,811,750 | 23,811,750 | 20,210,114 |
Statements of Cash Flows (Unaudited) - USD ($) |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Mar. 31, 2021 |
Sep. 30, 2020 |
Mar. 31, 2020 |
Sep. 30, 2019 |
Mar. 31, 2021 |
Mar. 31, 2020 |
|
Cash flows from operating activities: | ||||||
Net loss | $ (47,132) | $ (5,470) | $ (18,515) | $ (22,822) | $ (57,658) | $ (61,125) |
Change in operating assets and liabilities: | ||||||
Increase (decrease) in accounts payable and accrued liabilities | 51,742 | 53,676 | ||||
Net cash used by operating activities | (5,916) | (7,449) | ||||
Cash flows from financing activities: | ||||||
Advances from related party | 5,916 | 7,449 | ||||
Net cash provided by financing activities | 5,916 | 7,449 | ||||
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 | |||||
Common shares issued upon conversion of debt | $ 55,800 |
The Company and Significant Accounting Policies |
9 Months Ended |
---|---|
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
The Company and Significant Accounting Policies | Note 1. The Company and Significant Accounting Policies
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.
Basis of Presentation:
The Company 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.
The financial statements presented herein have been prepared by the Company in accordance with the accounting policies described in its June 30, 2020 audited financial statements and should be read in conjunction with the notes to financial statements which appear as part of those financial statements.
The preparation of these financial statements in conformity with accounting principles generally accepted in the United States of America requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, the Company evaluates our estimates, including those related to intangible assets, income taxes, insurance obligations and contingencies and litigation. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other resources. Actual results may differ from these estimates under different assumptions or conditions.
In the opinion of management, the information furnished in these interim financial statements reflects all adjustments necessary for a fair statement of the financial position and results of operations and cash flows as of and for the nine-month periods ended March 31, 2021 and 2020. All such adjustments are of a normal recurring nature. The Financial Statements have been prepared in accordance with the instructions to Form 10-Q and therefore do not include some information and notes necessary to conform with annual reporting requirements.
Recently Issued Accounting Pronouncements
In July 2018, the Financial Accounting Standards Board (the “FASB”) issued ASU No. 2018-10, Codification Improvements to Topic 842, Leases. The amendments in ASU 2018-10 provide additional clarification and implementation guidance on certain aspects of the previously issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”) and have the same effective and transition requirements as ASU 2016-02. Upon the effective date, ASU 2018-10 will supersede the current lease guidance in ASC Topic 840, Leases. Under the new guidance, lessees will be required to recognize for all leases, with the exception of short-term leases, a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis. Concurrently, lessees will be required to recognize a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. ASU 2018-10 is effective for private companies and emerging growth public companies for interim and annual reporting periods beginning after December 15, 2019, with early adoption permitted. The guidance is required to be applied using a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative periods presented in the financial statements. During the nine-month period ended March 31, 2021, the Company assessed the impact this guidance had on its financial statements and concluded that at present ASU No. 2018-10 has no impact on its financial statements.
In August, 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force). Effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. An entity that elects early adoption must adopt all of the amendments in the same period. The Company has adopted ASU No. 2016-15 and concluded that at present ASU No. 2016-15 has no impact on its statement of cash flows.
In May, 2016, the FASB issued ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients. The amendments in this Update affect the guidance in Accounting Standards Update 2014-09, Revenue from Contracts with Customers (Topic 606), which became effective. The effective date and transition requirements for the amendments in this Update are the same as the effective date and transition requirements for Topic 606 (and any other Topic amended by Update 2014-09). Accounting Standards Update 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, defers the effective date of Update 2014-09 by one year.
In April, 2016, the FASB issued ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing. The amendments in this Update affect the guidance in Accounting Standards Update 2014-09, Revenue from Contracts with Customers (Topic 606), which became effective. The effective date and transition requirements for the amendments in this Update are the same as the effective date and transition requirements in Topic 606 (and any other Topic amended by Update 2014-09). Accounting Standards Update 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, defers the effective date of Update 2014-09 by one year. The Company has adopted ASU No. 2016-12 and ASU No. 2016-10, and concluded that at present ASU No. 2016-12 and ASU No. 2016-10 have no impact on its revenue.
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. |
Going Concern |
9 Months Ended |
---|---|
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern | 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, the Company does not believe that it could succeed in raising additional capital, from unrelated parties, needed to sustain its operations without some strategic transaction, such as a business combination or merger. If the Company is unable to consummate such a transaction, it expects that it would need to cease all operations and wind down. Although the Company is currently evaluating its strategic alternatives with respect to all aspects of its business, it cannot assure you that any actions that it takes would raise or generate sufficient capital to fully address the uncertainties of its financial position. |
Convertible Note |
9 Months Ended |
---|---|
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Convertible Note | Note 3. Convertible Note
On October 12, 2018, the Company issued a $75,000 convertible promissory note to Ivo Heiden, the then CEO and the then sole officer and director. The convertible note bears interest at 8% per annum until paid or converted. The conversion price of the note is $0.034 per share, the closing price of the Company’s common stock on the date of issuance. Interest would 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 three-month periods ended March 31, 2021 and 2020 the Company expensed interest of $0 and $1,496, respectively, related to this note. As of March 31, 2021, and June 30, 2020, the Company has recorded $0 and $10,241, respectively, in accrued interest with respect to this convertible note.
On May 1, 2020, the Company 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 $0.04 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 three-month period ended March 31, 2021, the Company expensed interest of $0 related to this note. As of March 31, 2021 and June 30, 2020, the Company has recorded $0 and $1,203, respectively, in accrued interest with respect to this convertible note.
In accordance with ASC # 815, Accounting for Derivative Instruments and Hedging Activities, the Company 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. |
Related Party Transactions |
9 Months Ended |
---|---|
Mar. 31, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 4. Related Party Transactions
Due to Related Parties:
As of March 31, 2021, and June 30, 2020, the advances from Ivo Heiden, our previous CEO, were $0 and $28,155, respectively.
As of March 31, 2021, and June 30, 2020, accrued interest due to our previous CEO was $0 and $18,456, respectively.
On September 1, 2017, the Company entered into a Loan Agreement (the “Loan Agreement”) with Ivo Heiden, its then sole officer and director, under which the Company received 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 September 1, 2018, the Loan Agreement was extended to September 1, 2019. On June 28, 2019, the Loan Agreement was extended to September 1, 2020. 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 March 31, 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 three-month periods ended March 31, 2021 and 2020, the Company borrowed $0 and $544, respectively, under this Loan Agreement. During the three-months period ended March 31, 2021 and 2020, the Company expensed interest of $0 and $544, respectively, related to this Loan Agreement. During the nine-month periods ended March 31, 2021 and 2020, the Company borrowed $5,959 and $7,449, respectively, under this Loan Agreement. During the nine-months period ended March 31, 2021 and 2020, we expensed interest of $1,299 and $1,528, respectively, related to this Loan Agreement.
On March 31, 2021, the Company entered into a Loan Agreement with New York Listing Management Inc, a related party, under which the Company receives 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 March 31, 2021, the outstanding balance on this loan was $5,916 with accrued interest of $0. During the three-month periods ended March 31, 2021, the Company borrowed $5,916, under this Loan Agreement. During the three-months period ended March 31, 2021 we expensed interest of $0, related to this Loan Agreement.
During the nine months ended March 31, 2021 and 2020, the Company issued 0 and 6,975,000 shares of common stock.
On January 6, 2021, Ivo 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. |
Subsequent Events |
9 Months Ended |
---|---|
Mar. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 5. Subsequent Events
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,” subject to availability of such name and ticker (the “Change of Name,” together with the Reverse Stock Split and the Increase of Authorized Stock, collectively referred to as 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 U.S. Securities and Exchange Commission (the “SEC”).
On April 13, 2021, the Company filed a definitive information statement on Schedule 14C with SEC.
On April 20, 2021, the Company filed a certificate of change and a certificate of amendment with the Secretary of State of the State of Nevada.
The Corporate Actions, as of the date of this report, have not come into effect yet.
Beyond the events above, 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. |
The Company and Significant Accounting Policies (Policies) |
9 Months Ended |
---|---|
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation:
The Company 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.
The financial statements presented herein have been prepared by the Company in accordance with the accounting policies described in its June 30, 2020 audited financial statements and should be read in conjunction with the notes to financial statements which appear as part of those financial statements.
The preparation of these financial statements in conformity with accounting principles generally accepted in the United States of America requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, the Company evaluates our estimates, including those related to intangible assets, income taxes, insurance obligations and contingencies and litigation. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other resources. Actual results may differ from these estimates under different assumptions or conditions.
In the opinion of management, the information furnished in these interim financial statements reflects all adjustments necessary for a fair statement of the financial position and results of operations and cash flows as of and for the nine-month periods ended March 31, 2021 and 2020. All such adjustments are of a normal recurring nature. The Financial Statements have been prepared in accordance with the instructions to Form 10-Q and therefore do not include some information and notes necessary to conform with annual reporting requirements. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements
In July 2018, the Financial Accounting Standards Board (the “FASB”) issued ASU No. 2018-10, Codification Improvements to Topic 842, Leases. The amendments in ASU 2018-10 provide additional clarification and implementation guidance on certain aspects of the previously issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”) and have the same effective and transition requirements as ASU 2016-02. Upon the effective date, ASU 2018-10 will supersede the current lease guidance in ASC Topic 840, Leases. Under the new guidance, lessees will be required to recognize for all leases, with the exception of short-term leases, a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis. Concurrently, lessees will be required to recognize a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. ASU 2018-10 is effective for private companies and emerging growth public companies for interim and annual reporting periods beginning after December 15, 2019, with early adoption permitted. The guidance is required to be applied using a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative periods presented in the financial statements. During the nine-month period ended March 31, 2021, the Company assessed the impact this guidance had on its financial statements and concluded that at present ASU No. 2018-10 has no impact on its financial statements.
In August, 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force). Effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. An entity that elects early adoption must adopt all of the amendments in the same period. The Company has adopted ASU No. 2016-15 and concluded that at present ASU No. 2016-15 has no impact on its statement of cash flows.
In May, 2016, the FASB issued ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients. The amendments in this Update affect the guidance in Accounting Standards Update 2014-09, Revenue from Contracts with Customers (Topic 606), which became effective. The effective date and transition requirements for the amendments in this Update are the same as the effective date and transition requirements for Topic 606 (and any other Topic amended by Update 2014-09). Accounting Standards Update 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, defers the effective date of Update 2014-09 by one year.
In April, 2016, the FASB issued ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing. The amendments in this Update affect the guidance in Accounting Standards Update 2014-09, Revenue from Contracts with Customers (Topic 606), which became effective. The effective date and transition requirements for the amendments in this Update are the same as the effective date and transition requirements in Topic 606 (and any other Topic amended by Update 2014-09). Accounting Standards Update 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, defers the effective date of Update 2014-09 by one year. The Company has adopted ASU No. 2016-12 and ASU No. 2016-10, and concluded that at present ASU No. 2016-12 and ASU No. 2016-10 have no impact on its revenue.
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. |
Convertible Note (Details Narrative) - USD ($) |
3 Months Ended | ||||
---|---|---|---|---|---|
May 01, 2020 |
Oct. 12, 2018 |
Mar. 31, 2021 |
Mar. 31, 2020 |
Jun. 30, 2020 |
|
Debt Instrument [Line Items] | |||||
Accrued interest | $ 18,456 | ||||
Convertible Promissory Note [Member] | Ivo Heiden [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, face amount | $ 90,000 | $ 75,000 | |||
Debt instrument, interest rate | 8.00% | 8.00% | |||
Debt instrument, conversion price | $ 0.04 | $ 0.034 | |||
Debt instrument, maturity date | May 01, 2022 | Oct. 12, 2020 | |||
Interest expense | 0 | $ 1,496 | |||
Accrued interest | 0 | 10,241 | |||
Convertible Promissory Note [Member] | Ivo Heiden [Member] | Extended Maturity [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, maturity date | Apr. 30, 2022 | ||||
Convertible Promissory Note [Member] | Ivo Heiden [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest expense | 0 | ||||
Accrued interest | $ 0 | $ 1,203 |
Subsequent Events (Details Narrative) - $ / shares |
Apr. 02, 2021 |
Mar. 18, 2021 |
Mar. 31, 2021 |
Jun. 30, 2020 |
---|---|---|---|---|
Capital stock, shares authorized | 75,000,000 | |||
Common stock, shares authorized | 74,000,000 | 74,000,000 | ||
Common stock, par value | $ 0.0001 | $ 0.0001 | ||
Preferred stock, shares authorized | 1,000,000 | 1,000,000 | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | ||
Number of shares hold | 20,205,000 | |||
Ownership percentage | 85.00% | |||
Subsequent Event [Member] | ||||
Reverse stock split description | A reverse split of the Company's Common Stock on 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") | |||
Capital stock, shares authorized | 500,000,000 | |||
Capital stock, par value | $ 0.0001 | |||
Common stock, shares authorized | 450,000,000 | |||
Common stock, par value | $ 0.0001 | |||
Preferred stock, shares authorized | 50,000,000 | |||
Preferred stock, par value | $ 0.0001 |
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