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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

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

 

For the quarterly period ended September 30, 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

 

Ecomax, 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.)

 

1 Rockefeller Plaza, 10th floor New York, NY   10020
(Address of principal executive offices)   (Zip Code)

 

(646)-722-2931

(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 ☒ No

 

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

 

Yes ☒ No

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated 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 Smaller reporting company  
    Emerging growth company

 

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

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☒ No ☐

 

As of October 25, 2021, there were 2,380,952 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 (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 15
     
Item 3. Quantitative and Qualitative Disclosures About Market Risk 18
     
Item 4. Controls and Procedures 19
     
Part II OTHER INFORMATION  
     
Item 1. Legal Proceedings 20
     
Item 1A. Risk Factors 20
     
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 20
     
Item 3. Defaults Upon Senior Securities 20
     
Item 4. Mine Safety Disclosures 20
     
Item 5. Other Information 20
     
Item 6. Exhibits 20
     
SIGNATURE 21

 

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

 

ITEM 1. FINANCIAL STATEMENTS

 

ECOMAX, INC.

 

BALANCE SHEETS

Balance Sheets as of September 30, 2021 and June 30, 2021

 

   September 30,   June 30, 
   2021 (unaudited)   2021 
ASSETS          
           
Current assets:          
Cash  $-   $- 
Total current assets   -    - 
           
TOTAL ASSETS  $-   $- 
           
LIABILITIES AND STOCKHOLDERS’ DEFICIT          
           
Current liabilities:          
Accounts payable - trade  $3,600   $7,664 
Advances from - related party   93,420    59,725 
Accrued interest related party   2,090    666 
Accured expenses   18,280    17,030 
Accrued expenses - related party   -    8,000 
           
Total current liabilities   117,390    93,085 
           
Stockholders’ deficit:          
Preferred stock, $0.0001 par value; 50,000,000 authorized; none issued and outstanding at September 30, 2021 and June 30, 2021.   -    - 
Common stock, $0.0001 par value; 450,000,000 shares authorized; 2,380,952 issued and outstanding at September 30, 2021 and June 30, 2021.   238    238 
Additional paid-in capital   286,524    286,524 
Accumulated deficit   (404,152)   (379,847)
Total stockholders’ deficit   (117,390)   (93,085)
           
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)  $-   $- 

 

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

 

4
 

 

ECOMAX, INC.

 

STATEMENTS OF OPERATIONS

 

         
   Three Months Ended September 30, 
   2021 (unaudited)   2020 (unaudited) 
         
Revenues  $-   $- 
Cost and expenses:          
General and administrative   22,881    1,524 
Total operating expenses   22,881    1,524 
           
Other income and expenses          
           
Interest expenses   1,424    3,946 
Net loss  $(24,305)  $(5,470)
           
Per common share - basic and diluted          
Basic and diluted net loss  $(0.01)  $(0.00)
           
Weighted average shares          
Outstanding, basic and diluted   2,380,952    2,380,952 

 

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

 

5
 

 

ECOMAX, INC.

 

STATEMENTS OF CASH FLOWS

 

         
   Three Months Ended September 30, 
   2021 (unaudited)   2020 (unaudited) 
         
Cash flows from operating activities:          
Net loss  $(24,305)  $(5,470)
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   (9,390)   1,721 
Net cash used by operating activities   (33,695)   (3,749)
           
Cash flows from financing activities:          
Advances from related party   33,695    3,749 
Net cash provided by financing activities   33,695    3,749 
           
Change in cash   -    - 
Cash at beginning of period   -    - 
Cash at end of period  $-   $- 

 

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

 

6
 

 

ECOMAX, INC.

 

STATEMENTS OF STOCKHOLDERS’ DEFICIT

 

1                    
   Common stock   Additional         
  

Number of

Shares

  

Stated or

Par Value

  

Paid-in

Capital

  

Accumulated

Deficit

   Total 
Balance at June 30, 2020   2,380,952   $238   $61,037   $(276,236)  $(214,961)
Net loss   -    -    -    (5,470)   (5,470)
Balance at September 30, 2020   2,380,952    238    61,037    (281,706)   (220,431)
              -           
Balance at June 30, 2021   2,380,952   $238   $286,524   $(379,847)  $(93,085)
Net loss   -    -    -    (24,305)   (24,305)
Balance at September 30, 2021   2,380,952    238    286,524    (404,152)   (117,390)

 

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

 

7
 

 

Ecomax, Inc.

 

Background and Significant Accounting Policies

 

September 30, 2021

 

Note 1. The Company and Significant Accounting Policies

 

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

 

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

 

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

 

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

 

Basis of Presentation:

 

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

 

Significant Accounting Policies:

 

Use of Estimates:

 

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

 

8
 

 

Cash and Cash Equivalents:

 

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

 

Property and Equipment:

 

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

 

Valuation of Long-Lived Assets:

 

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

 

Stock Based Compensation:

 

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

 

Fair Value of Financial Instruments:

 

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

 

9
 

 

Earnings per Common Share:

 

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

 

Income Taxes:

 

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

 

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

 

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

 

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

 

10
 

 

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

 

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

 

Uncertain Tax Positions:

 

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

 

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

 

11
 

 

Recently Issued Accounting Pronouncements:

 

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

 

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

 

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

 

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

 

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

 

12
 

 

Note 2. Going Concern

 

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

 

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

 

Note 3. Convertible Note

 

On October 12, 2018, we issued a $75,000 convertible promissory note to Ivo Heiden. The convertible note bears interest at 8% per annum until paid or converted. The conversion price of the note is $0.34 per share, the closing price of the Company’s common stock on the date of issuance. Interest will be payable upon the maturity date at October 12, 2020. On May 1, 2020, the convertible promissory note was extended to April 30, 2022. On January 6, 2021, the note holder waived interests and liability of the Company and terminated this note. During the three months ended September 30, 2021 and 2020 the Company expensed interest of $0 and $1,512, respectively, related to this note.

 

On May 1, 2020, we issued a $90,000 convertible promissory note to Ivo Heiden. The convertible note bears interest at 8% per annum until paid or converted. The conversion price of the note is $0.4 per share, the closing price of the Company’s common stock on the date of issuance. Interest will be payable upon the maturity date at May 1, 2022. On January 6, 2021, the note holder waived interests and liability of the Company and terminated this note. During the three months ended September 30, 2021, and 2020 the Company expensed interest of $0 and $1,815, respectively, related to this note.

 

13
 

 

On September 1, 2017, we entered into a Loan Agreement with Ivo Heiden, our sole officer and director, under which we receive funding for general operating expenses from time-to-time as needed by the Company. The Loan Agreement bears interest of 8% per annum and shall be due and payable on a date 366 days from the date of the loan. On May 1, 2020, the Loan Agreement was extended to September 1, 2021. On January 6, 2021, the balance of this loan and accrued interests were waived by Ivo Heiden and the Loan Agreement was terminated on the same day. During the three months ended September 30, 2021 and 2020, we expensed interest of $0 and $619, respectively, related to this Loan Agreement.

 

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

 

Note 4. Related Party Transactions

 

Due to Related Parties:

 

On March 31, 2021, we entered into a Loan Agreement with New York Listing Management Inc, a related party of us, under which we receive funding for general operating expenses from time-to-time as needed by the Company. The Loan Agreement bears interest of 8% per annum and shall be due and payable on a date 366 days from the date of the loan. As of September 30, and June 30, 2021, the outstanding balance on this loan was $93,420 and $59,725, respectively, with accrued interest of $2,090 and $666, respectively. During the three months ended September 30, 2021, we expensed interest of $1,424, related to this Loan Agreement.

 

Note 5. Subsequent Events

 

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

 

14
 

 

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

Some of the statements contained in this quarterly report of Ecomax, Inc. (hereinafter the “Company”, “We” or the “Company”) discuss future expectations, contain projections of our plan of operation or financial condition or state other forward-looking information. Forward-looking statements give our current expectations or forecasts of future events. You can identify these statements by the fact that they do not relate strictly to historical or current facts. They use of words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” and other words and terms of similar meaning in connection with any discussion of future operating or financial performance. From time to time, we also may provide forward-looking statements in other materials we release to the public.

 

General Background of the Company

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

15
 

 

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

 

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

 

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

 

Business Objectives of the Company

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

16
 

 

The Company’s is a Blank Check Company

 

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

 

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

 

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

 

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

 

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

 

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

 

Results of Operations during the three months ended September 30, 2021 as compared to the three months ended September 30, 2020

 

We have not generated any revenues during the three months ended September 30, 2021 and 2020. We had total operating expenses of $22,881 related to general and administrative expenses during the three months ended September 30, 2021 compared to $1,524 during the same period in the prior year. We incurred interest expenses of $1,424 during three months ended September 30, 2021 compared to interest expenses of $3,946 during the three months ended September 30, 2020. During the three months ended September 30, 2021 and 2020, we had a net loss of $24,305 and $5,470, respectively. The increase in our net loss was due the increase on the officer compensation.

 

17
 

 

Liquidity and Capital Resources

 

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

 

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

 

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

 

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

 

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

 

On September 30, 2021 and September 30, 2020, we had no current assets. As of September 30, 2021, we had $117,390 in liabilities consisting of accounts payable of $3,600, advance from a related party of $93,420, accrued interest due to related parties of $2,090 in one loan agreement, and accrued expenses of $18,280.

 

During the three months ended September 30, 2021, we had negative cash flow from operating activities of $33,695 due to a net loss of $24,305. We financed our negative cash flow from operations $33,695 in advances from New York Listing Management Inc., an affiliated party.

 

The Company currently plans to satisfy its cash requirements for the next 12 months through borrowings from New York Listing Management Inc. and believes it can satisfy its cash requirements so long as it is able to obtain financing from New York Listing Management Inc. The Company expects that money borrowed will be used during the next 12 months to satisfy the Company’s operating costs, professional fees and for general corporate purposes.

 

On March 31, 2021, we entered into a loan agreement with New York Listing Management Inc., a related party, under which we are able to receive funding of up to $200,000 for general operating expenses from time-to-time as needed by the Company. The loan bears an interest rate of 8% per annum and shall be due and payable on a date three hundred sixty-six (366) days from the date of such loan agreement. As of September 30, 2021, the Company has received a total of $93,420 under this loan agreement.

 

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

 

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

 

Off-Balance Sheet Arrangements

 

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

 

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.

 

18
 

 

ITEM 4. CONTROLS AND PROCEDURES

 

Evaluation of disclosure controls and procedures.

 

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

 

Changes in Internal Control Over Financial Reporting

 

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

 

19
 

 

PART II

 

OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

 

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.

 

ITEM 1A. RISK FACTORS

 

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.

 

ITEM 3. DEFAULT UPON SENIOR SECURITIES.

 

None.

 

ITEM 4. MINE SAFETY DISCLOSURES.

 

Not applicable.

 

ITEM 5. OTHER INFORMATION.

 

None.

 

ITEM 6. EXHIBITS

 

Exhibit

No.

  Description
3.1   Certificate of Incorporation (incorporated by reference to our Form 10, Exhibit No.3.1, filed with the Securities and Exchange Commission on July 10, 2017)
3.2   Bylaws (incorporated by reference to our Form 10, Exhibit 3.2, filed with the Securities and Exchange Commission on July 10, 2017)
3.3   Certificate of Amendment dated as of April 21, 2021 and Nevada State Business License dated as of April 22, 2021 (incorporated by reference to our Form 8-K, Exhibit No.3.2, filed with the Securities and Exchange Commission on May 26, 2021.)
3.4   Certificate of Change dated as of April 20, 2021(incorporated by reference to our Form 8-K, Exhibit 3.2, filed with the Securities and Exchange Commission on May 26, 2021.)
31   Certification of Chief Executive Officer and Chief Financial Officer pursuant to Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 *
32   Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 **
     
101.INS   XBRL Instance Document *
101.SCH   XBRL Taxonomy Extension Schema Document *
101.CAL   XBRL Taxonomy Extension Calculation Linkbase Document *
101.DEF   XBRL Taxonomy Extension Definition Linkbase Document *
101.LAB   XBRL Taxonomy Extension Label Linkbase Document *
101.PRE   XBRL Taxonomy Extension Presentation Linkbase Document *
104   Cover Page Interactive Data File (Embedded within the Inline XBRL document and included in Exhibit)

 

* 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.

 

20
 

 

SIGNATURES

 

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

 

  ECOMAX, INC.
October 25, 2021    
  By: /s/ Yu Yam, Anthony, CHAU
  Name: Yu Yam, Anthony, CHAU
  Title: Chief Executive Officer and Chief Financial Officer

 

21

 

EX-31 2 ex31.htm

 

Exhibit 31

 

CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER PURSUANT

TO EXCHANGE ACT RULE 13A-14(A), AS ADOPTED PURSUANT TO SECTION 302 OF THE

SARBANES-OXLEY ACT OF 2002

 

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

 

1. I have reviewed this quarterly report of Ecomax, Inc.;

 

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

 

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

 

4. The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the 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. The issuer’s other certifying officer(s) and 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: October 25, 2021

 

/s/ Yu Yam, Anthony, CHAU  
Yu Yam, Anthony, CHAU  
CEO and CFO  

 

 
EX-32 3 ex32.htm

 

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

 

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

 

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

 

Date: October 25, 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.

 

 

 

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Convertible Promissory Note [Member] Ivo Heiden [Member] Convertible Promissory Note One [Member] Loan Agreement [Member] New York Listing Management Inc [Member] Assets, Current Assets Liabilities, Current Stockholders' Equity Attributable to Parent Liabilities and Equity Operating Expenses Net Cash Provided by (Used in) Operating Activities Net Cash Provided by (Used in) Financing Activities Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Period Increase (Decrease), Including Exchange Rate Effect Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Including Disposal Group and Discontinued Operations Shares, Outstanding EX-101.PRE 8 ecmt-20210930_pre.xml XBRL PRESENTATION FILE XML 9 form10-q_htm.xml IDEA: XBRL DOCUMENT 0001008653 2021-07-01 2021-09-30 0001008653 2021-10-25 0001008653 2021-09-30 0001008653 2021-06-30 0001008653 2020-07-01 2020-09-30 0001008653 2020-06-30 0001008653 2020-09-30 0001008653 us-gaap:CommonStockMember 2020-06-30 0001008653 us-gaap:AdditionalPaidInCapitalMember 2020-06-30 0001008653 us-gaap:RetainedEarningsMember 2020-06-30 0001008653 us-gaap:CommonStockMember 2020-07-01 2020-09-30 0001008653 us-gaap:AdditionalPaidInCapitalMember 2020-07-01 2020-09-30 0001008653 us-gaap:RetainedEarningsMember 2020-07-01 2020-09-30 0001008653 us-gaap:CommonStockMember 2020-09-30 0001008653 us-gaap:AdditionalPaidInCapitalMember 2020-09-30 0001008653 us-gaap:RetainedEarningsMember 2020-09-30 0001008653 us-gaap:CommonStockMember 2021-06-30 0001008653 us-gaap:AdditionalPaidInCapitalMember 2021-06-30 0001008653 us-gaap:RetainedEarningsMember 2021-06-30 0001008653 us-gaap:CommonStockMember 2021-07-01 2021-09-30 0001008653 us-gaap:AdditionalPaidInCapitalMember 2021-07-01 2021-09-30 0001008653 us-gaap:RetainedEarningsMember 2021-07-01 2021-09-30 0001008653 us-gaap:CommonStockMember 2021-09-30 0001008653 us-gaap:AdditionalPaidInCapitalMember 2021-09-30 0001008653 us-gaap:RetainedEarningsMember 2021-09-30 0001008653 2021-04-11 2021-04-13 0001008653 2021-04-12 0001008653 2021-04-13 0001008653 ECMT:IvoHeidenMember ECMT:ConvertiblePromissoryNoteMember 2018-10-12 0001008653 ECMT:IvoHeidenMember ECMT:ConvertiblePromissoryNoteMember 2018-10-11 2018-10-12 0001008653 ECMT:IvoHeidenMember ECMT:ConvertiblePromissoryNoteMember us-gaap:ExtendedMaturityMember 2020-04-29 2020-05-01 0001008653 ECMT:IvoHeidenMember ECMT:ConvertiblePromissoryNoteMember 2021-07-01 2021-09-30 0001008653 ECMT:IvoHeidenMember ECMT:ConvertiblePromissoryNoteMember 2020-07-01 2020-09-30 0001008653 ECMT:IvoHeidenMember ECMT:ConvertiblePromissoryNoteOneMember 2020-05-01 0001008653 ECMT:IvoHeidenMember ECMT:ConvertiblePromissoryNoteOneMember 2020-04-29 2020-05-01 0001008653 ECMT:IvoHeidenMember ECMT:ConvertiblePromissoryNoteOneMember 2021-07-01 2021-09-30 0001008653 ECMT:IvoHeidenMember ECMT:ConvertiblePromissoryNoteOneMember 2020-07-01 2020-09-30 0001008653 ECMT:IvoHeidenMember ECMT:LoanAgreementMember 2017-09-01 0001008653 ECMT:IvoHeidenMember us-gaap:ExtendedMaturityMember ECMT:LoanAgreementMember 2020-04-30 2020-05-01 0001008653 ECMT:IvoHeidenMember ECMT:LoanAgreementMember 2021-07-01 2021-09-30 0001008653 ECMT:IvoHeidenMember ECMT:LoanAgreementMember 2020-07-01 2020-09-30 0001008653 ECMT:NewYorkListingManagementIncorporatedMember ECMT:LoanAgreementMember 2021-03-31 0001008653 ECMT:NewYorkListingManagementIncorporatedMember ECMT:LoanAgreementMember 2021-07-01 2021-09-30 iso4217:USD shares iso4217:USD shares pure 0001008653 false --06-30 2022 Q1 10-Q true 2021-09-30 false 000-21613 Ecomax, Inc. NV 13-3865026 1 Rockefeller Plaza 10th floor New York NY 10020 (646) 722-2931 Yes Yes Non-accelerated Filer true false true 2380952 3600 7664 93420 59725 2090 666 18280 17030 8000 117390 93085 0.0001 0.0001 50000000 50000000 0 0 0 0 0.0001 0.0001 450000000 450000000 2380952 2380952 2380952 2380952 238 238 286524 286524 -404152 -379847 -117390 -93085 22881 1524 22881 1524 1424 3946 -24305 -5470 -0.01 -0.00 2380952 2380952 -24305 -5470 -9390 1721 -33695 -3749 33695 3749 33695 3749 2380952 238 61037 -276236 -214961 -5470 -5470 2380952 238 61037 -281706 -220431 2380952 238 286524 -379847 -93085 2380952 238 286524 -379847 -93085 -24305 -24305 2380952 238 286524 -404152 -117390 2380952 238 286524 -404152 -117390 <p id="xdx_80E_eus-gaap--OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureAndSignificantAccountingPoliciesTextBlock_zWk5MumQAaX7" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"><b>Note 1. <span id="xdx_824_zrXwRbt5Lhi6">The Company and Significant Accounting Policies</span></b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif">Ecomax, Inc., formerly Ecomat, Inc. (the “Company”) was incorporated on December 14, 1995 pursuant to the laws of the State of Delaware. On February 9, 2007, the Company completed its change in domicile to Nevada. The Company used to operate a wet-cleaning process which was one of the first environmentally sound solution to current dry-cleaning methods.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif">On April 13, 2021 the Board of Directors (the “Board”) of the Company filed the following with the State of Nevada:</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify; text-indent: -0.25in"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font: 10pt Times New Roman, Times, Serif"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font: 10pt Times New Roman, Times, Serif">●</span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"><span id="xdx_903_eus-gaap--StockholdersEquityReverseStockSplit_c20210411__20210413_zzUbrx9WRzoe" title="Reverse stock split description">A reverse stock split of common stock of one share for every ten (1-for-10) shares outstanding.</span></span></td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">●</span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif">A change in name from Ecomat, Inc. to Ecomax, Inc.;</span></td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif"><span style="font: 10pt Times New Roman, Times, Serif">●</span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif">An increase in the authorized number of shares of capital stock from <span id="xdx_905_eus-gaap--CapitalUnitsAuthorized_iI_pid_c20210412_zh5QUnhOPaC1" title="Capital stock, shares authorized">75,000,000</span> to <span id="xdx_90B_eus-gaap--CapitalUnitsAuthorized_iI_pid_c20210413_z9TDoezcTr6i" title="Capital stock, shares authorized">500,000,000</span>, including <span id="xdx_909_eus-gaap--CommonStockSharesAuthorized_iI_pid_c20210413_zSrGfk2G45zh" title="Common stock, shares authorized">450,000,000</span> shares of common stock and <span id="xdx_909_eus-gaap--PreferredStockSharesAuthorized_iI_pid_c20210413_z5rSTi2ZSnrg" title="Preferred stock, shares authorized">50,000,000</span> shares of preferred stock, and;</span></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif">All share and per share information, including earnings per share, in this Form 10-K have been retroactively adjusted to reflect this reverse stock split and certain items in prior period financial statements have been revised to conform to the current presentation.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> <p id="xdx_84C_eus-gaap--BasisOfAccountingPolicyPolicyTextBlock_zhPnkbCNkNK9" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"><span id="xdx_861_zSMeCRHswJQ8">Basis of Presentation</span>:</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif">We adopted “fresh-start” accounting as of June 15, 2006 in accordance with procedures specified by AICPA Statement of Position (“SOP”) No. 90-7, “Financial Reporting by Entities in Reorganization under the Bankruptcy Code.</span></p> <p id="xdx_854_znEgiWY03whj" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"><b><i> </i></b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"><b><i>Significant Accounting Policies:</i></b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> <p id="xdx_84D_eus-gaap--UseOfEstimates_zfEYeq68YCo3" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"><i><span id="xdx_86F_zJJPX9E7Ik2c">Use of Estimates</span>:</i></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif">The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statement and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from the estimates.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font: 10pt Times New Roman, Times, Serif"><i> </i></span></p> <p id="xdx_841_eus-gaap--CashAndCashEquivalentsPolicyTextBlock_zJbiDpiHkbR5" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"><i><span id="xdx_86C_z0zddYfydKy9">Cash and Cash Equivalents</span>:</i></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif">For financial statement presentation purposes, the Company considers those short-term, highly liquid investments with original maturities of three months or less to be cash or cash equivalents. There were <span id="xdx_902_eus-gaap--CashEquivalentsAtCarryingValue_iI_pp0p0_do_c20210930_zu2tf1QovEck" title="Cash equivalents"><span id="xdx_90C_eus-gaap--CashEquivalentsAtCarryingValue_iI_pp0p0_do_c20210630_zlKQrPqovcT5" title="Cash equivalents">no</span></span> cash equivalents at September 30, 2021 or June 30, 2021.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> <p id="xdx_842_eus-gaap--PropertyPlantAndEquipmentPolicyTextBlock_zfaln1FvH0sb" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"><i><span id="xdx_86E_z9JRLvxz7PGk">Property and Equipment</span>:</i></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif">New property and equipment are recorded at cost. Property and equipment included in the bankruptcy proceedings and transferred to the Trustee had been valued at liquidation value. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally <span id="xdx_903_eus-gaap--PropertyPlantAndEquipmentUsefulLife_dtY_c20210701__20210930_z23P0Qfzk401" title="Property and equipment, estimated useful lives">5</span> years. Expenditures for renewals and betterments are capitalized. Expenditures for minor items, repairs and maintenance are charged to operations as incurred. Gain or loss upon sale or retirement due to obsolescence is reflected in the operating results in the period the event takes place.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> <p id="xdx_845_eus-gaap--IntangibleAssetsFiniteLivedPolicy_zeCB4AU86OMg" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"><i><span id="xdx_866_zz72m96xD3Tc">Valuation of Long-Lived Assets</span>:</i></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif">We review the recoverability of our long-lived assets including equipment, goodwill and other intangible assets, when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on our ability to recover the carrying value of the asset from the expected future pre-tax cash flows (undiscounted and without interest charges) of the related operations. If these cash flows are less than the carrying value of such asset, an impairment loss is recognized for the difference between estimated fair value and carrying value. Our primary measure of fair value is based on discounted cash flows. The measurement of impairment requires management to make estimates of these cash flows related to long-lived assets, as well as other fair value determinations.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> <p id="xdx_849_eus-gaap--CompensationRelatedCostsPolicyTextBlock_zyF52gwALsN9" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"><i><span id="xdx_867_zf8kCbsRzwc8">Stock Based Compensation</span>:</i></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif">Stock-based awards are accounted for using the fair value method in accordance with ASC 718, Share-Based Payments. Our primary type of share-based compensation consists of stock options. We use the Black-Scholes option pricing model in valuing options. The inputs for the valuation analysis of the options include the market value of the Company’s common stock, the estimated volatility of the Company’s common stock, the exercise price of the warrants and the risk-free interest rate.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> <p id="xdx_843_eus-gaap--FairValueOfFinancialInstrumentsPolicy_zA788XFgXCx8" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"><i><span id="xdx_86A_zUkRg132Qcs4">Fair Value of Financial Instruments</span>:</i></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif">FASB ASC 825, “Financial Instruments,” requires entities to disclose the fair value of financial instruments, both assets and liabilities recognized and not recognized on the balance sheet, for which it is practicable to estimate fair value. FASB ASC 825 defines fair value of a financial instrument as the amount at which the instrument could be exchanged in a current transaction between willing parties. At June 30, 2021 and 2020, the carrying value of certain financial instruments (cash and cash equivalents, accounts payable and accrued expenses.) approximates fair value due to the short-term nature of the instruments or interest rates, which are comparable with current rates.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font: 10pt Times New Roman, Times, Serif"><i> </i></span></p> <p id="xdx_84A_eus-gaap--EarningsPerSharePolicyTextBlock_zxWVMMvf1Sp7" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"><i><span id="xdx_869_zL25SrJvOgNk">Earnings per Common Share</span>:</i></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif">We compute net income (loss) per share in accordance with ASC 260, Earning per Share. ASC 260 requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing Diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> <p id="xdx_840_eus-gaap--IncomeTaxPolicyTextBlock_zt87evgaKWRk" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"><i><span id="xdx_864_z6RL9xA6HV03">Income Taxes</span>:</i></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif">We have adopted ASC 740, Accounting for Income Taxes. Pursuant to ASC 740, we are required to compute tax asset benefits for net operating losses carried forward. The potential benefits of net operating losses have not been recognized in these financial statements because the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward in future years.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif">We must make certain estimates and judgments in determining income tax expense for financial statement purposes. These estimates and judgments occur in the calculation of certain tax assets and liabilities, which arise from differences in the timing of recognition of revenue and expense for tax and financial statement purposes.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif">Deferred tax assets and liabilities are determined based on the differences between financial reporting and the tax basis of assets and liabilities using the tax rates and laws in effect when the differences are expected to reverse. ASC 740 provides for the recognition of deferred tax assets if realization of such assets is more likely than not to occur. Realization of our net deferred tax assets is dependent upon our generating sufficient taxable income in future years in appropriate tax jurisdictions to realize benefit from the reversal of temporary differences and from net operating loss, or NOL, carryforwards. We have determined it more likely than not that these timing differences will not materialize and have provided a valuation allowance against substantially all of our net deferred tax asset.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif">Management will continue to evaluate the realizability of the deferred tax asset and its related valuation allowance. If our assessment of the deferred tax assets or the corresponding valuation allowance were to change, we would record the related adjustment to income during the period in which we make the determination. Our tax rate may also vary based on our results and the mix of income or loss in domestic and foreign tax jurisdictions in which we operate.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif">In addition, the calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax regulations. We recognize liabilities for anticipated tax audit issues in the U.S. and other tax jurisdictions based on our estimate of whether, and to the extent to which, additional taxes will be due. If we ultimately determine that payment of these amounts is unnecessary, we will reverse the liability and recognize a tax benefit during the period in which we determine that the liability is no longer necessary. We will record an additional charge in our provision for taxes in the period in which we determine that the recorded tax liability is less than we expect the ultimate assessment to be.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"><b> </b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif">ASC 740 which requires recognition of estimated income taxes payable or refundable on income tax returns for the current year and for the estimated future tax effect attributable to temporary differences and carry-forwards. Measurement of deferred income tax is based on enacted tax laws including tax rates, with the measurement of deferred income tax assets being reduced by available tax benefits not expected to be realized.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> <p id="xdx_84A_eus-gaap--IncomeTaxUncertaintiesPolicy_zt5aIar42Xk5" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"><i><span id="xdx_868_z9pzXWG2zICd">Uncertain Tax Positions</span>:</i></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif">The Financial Accounting Standards Board issued Interpretation No. 48, “Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement No. 109, Accounting for Income Taxes” (“FIN No. 48”) which was effective for the Company on January 1, 2007. FIN No. 48 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under FIN No. 48, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. The tax benefits recognized in the financial statements from such position should be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. FIN No. 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods and disclosure requirements.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif">Our federal and state income tax returns are open for fiscal years ending on or after June 30, 2007. We are not under examination by any jurisdiction for any tax year. At September 30, 2021, we had no material unrecognized tax benefits and no adjustments to liabilities or operations were required under FIN 48.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font: 10pt Times New Roman, Times, Serif"><i> </i></span></p> <p id="xdx_840_eus-gaap--NewAccountingPronouncementsPolicyPolicyTextBlock_zXdgfp8EYsPj" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"><i><span id="xdx_864_z5Jin7P4swY7">Recently Issued Accounting Pronouncements</span>:</i></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif">In January 2017, the FASB issued Accounting Standard Update (ASU) 2017-04, Intangibles-Goodwill and Other (Topic 350) which simplifies the test for goodwill impairment. To address concerns over the cost and complexity of the two-step goodwill impairment test, the amendments in this update remove the second step of the test. An entity will apply a one-step quantitative test and record the amount of goodwill impairment as the excess of a reporting unit’s carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. The new guidance does not amend the optional qualitative assessment of goodwill impairment. This update is effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif">In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value”. ASU 2018-13 removes and modifies existing disclosure requirements on fair value measurement, namely regarding transfers between levels of the fair value hierarchy and the valuation processes for Level 3 fair value measurements. Additionally, ASU 2018-13 adds further disclosure requirements for Level 3 fair value measurements, specifically changes in unrealized gains and losses and other quantitative information. ASU 2018-13 is effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif">In October 2018, the FASB issued ASU 2018-17, Consolidation (Topic 810): Targeted Improvements to the Related Party Guidance for Variable Interest Entities. ASU 2018-17 changes how entities evaluate decision-making fees under the variable interest entity guidance. To determine whether decision-making fees represent a variable interest, an entity considers indirect interests held through related parties under common control on a proportional basis, rather than in their entirety. This guidance will be adopted using a retrospective approach and is effective for the Company on January 1, 2020.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif">In December 2019, the FASB issued ASU 2019-12 - Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. This ASU provides an exception to the general methodology for calculating income taxes in an interim period when a year-to-date loss exceeds the anticipated loss for the year. This update also (1) requires an entity to recognize a franchise tax (or similar tax) that is partially based on income as an income-based tax and account for any incremental amount incurred as a non-income-based tax, (2) requires an entity to evaluate when a step-up in the tax basis of goodwill should be considered part of the business combination in which goodwill was originally recognized for accounting purposes and when it should be considered a separate transaction, and (3) requires that an entity reflect the effect of an enacted change in tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date. The Company adopted this ASU on January 1, 2021.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif">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.</span></p> <p id="xdx_852_zIvX8zoaXsO9" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font: 10pt Times New Roman, Times, Serif"><b> </b></span></p> A reverse stock split of common stock of one share for every ten (1-for-10) shares outstanding. 75000000 500000000 450000000 50000000 <p id="xdx_84C_eus-gaap--BasisOfAccountingPolicyPolicyTextBlock_zhPnkbCNkNK9" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"><span id="xdx_861_zSMeCRHswJQ8">Basis of Presentation</span>:</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif">We adopted “fresh-start” accounting as of June 15, 2006 in accordance with procedures specified by AICPA Statement of Position (“SOP”) No. 90-7, “Financial Reporting by Entities in Reorganization under the Bankruptcy Code.</span></p> <p id="xdx_84D_eus-gaap--UseOfEstimates_zfEYeq68YCo3" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"><i><span id="xdx_86F_zJJPX9E7Ik2c">Use of Estimates</span>:</i></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif">The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statement and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from the estimates.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font: 10pt Times New Roman, Times, Serif"><i> </i></span></p> <p id="xdx_841_eus-gaap--CashAndCashEquivalentsPolicyTextBlock_zJbiDpiHkbR5" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"><i><span id="xdx_86C_z0zddYfydKy9">Cash and Cash Equivalents</span>:</i></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif">For financial statement presentation purposes, the Company considers those short-term, highly liquid investments with original maturities of three months or less to be cash or cash equivalents. There were <span id="xdx_902_eus-gaap--CashEquivalentsAtCarryingValue_iI_pp0p0_do_c20210930_zu2tf1QovEck" title="Cash equivalents"><span id="xdx_90C_eus-gaap--CashEquivalentsAtCarryingValue_iI_pp0p0_do_c20210630_zlKQrPqovcT5" title="Cash equivalents">no</span></span> cash equivalents at September 30, 2021 or June 30, 2021.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> 0 0 <p id="xdx_842_eus-gaap--PropertyPlantAndEquipmentPolicyTextBlock_zfaln1FvH0sb" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"><i><span id="xdx_86E_z9JRLvxz7PGk">Property and Equipment</span>:</i></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif">New property and equipment are recorded at cost. Property and equipment included in the bankruptcy proceedings and transferred to the Trustee had been valued at liquidation value. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally <span id="xdx_903_eus-gaap--PropertyPlantAndEquipmentUsefulLife_dtY_c20210701__20210930_z23P0Qfzk401" title="Property and equipment, estimated useful lives">5</span> years. Expenditures for renewals and betterments are capitalized. Expenditures for minor items, repairs and maintenance are charged to operations as incurred. Gain or loss upon sale or retirement due to obsolescence is reflected in the operating results in the period the event takes place.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> P5Y <p id="xdx_845_eus-gaap--IntangibleAssetsFiniteLivedPolicy_zeCB4AU86OMg" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"><i><span id="xdx_866_zz72m96xD3Tc">Valuation of Long-Lived Assets</span>:</i></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif">We review the recoverability of our long-lived assets including equipment, goodwill and other intangible assets, when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on our ability to recover the carrying value of the asset from the expected future pre-tax cash flows (undiscounted and without interest charges) of the related operations. If these cash flows are less than the carrying value of such asset, an impairment loss is recognized for the difference between estimated fair value and carrying value. Our primary measure of fair value is based on discounted cash flows. The measurement of impairment requires management to make estimates of these cash flows related to long-lived assets, as well as other fair value determinations.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> <p id="xdx_849_eus-gaap--CompensationRelatedCostsPolicyTextBlock_zyF52gwALsN9" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"><i><span id="xdx_867_zf8kCbsRzwc8">Stock Based Compensation</span>:</i></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif">Stock-based awards are accounted for using the fair value method in accordance with ASC 718, Share-Based Payments. Our primary type of share-based compensation consists of stock options. We use the Black-Scholes option pricing model in valuing options. The inputs for the valuation analysis of the options include the market value of the Company’s common stock, the estimated volatility of the Company’s common stock, the exercise price of the warrants and the risk-free interest rate.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> <p id="xdx_843_eus-gaap--FairValueOfFinancialInstrumentsPolicy_zA788XFgXCx8" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"><i><span id="xdx_86A_zUkRg132Qcs4">Fair Value of Financial Instruments</span>:</i></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif">FASB ASC 825, “Financial Instruments,” requires entities to disclose the fair value of financial instruments, both assets and liabilities recognized and not recognized on the balance sheet, for which it is practicable to estimate fair value. FASB ASC 825 defines fair value of a financial instrument as the amount at which the instrument could be exchanged in a current transaction between willing parties. At June 30, 2021 and 2020, the carrying value of certain financial instruments (cash and cash equivalents, accounts payable and accrued expenses.) approximates fair value due to the short-term nature of the instruments or interest rates, which are comparable with current rates.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font: 10pt Times New Roman, Times, Serif"><i> </i></span></p> <p id="xdx_84A_eus-gaap--EarningsPerSharePolicyTextBlock_zxWVMMvf1Sp7" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"><i><span id="xdx_869_zL25SrJvOgNk">Earnings per Common Share</span>:</i></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif">We compute net income (loss) per share in accordance with ASC 260, Earning per Share. ASC 260 requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing Diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> <p id="xdx_840_eus-gaap--IncomeTaxPolicyTextBlock_zt87evgaKWRk" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"><i><span id="xdx_864_z6RL9xA6HV03">Income Taxes</span>:</i></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif">We have adopted ASC 740, Accounting for Income Taxes. Pursuant to ASC 740, we are required to compute tax asset benefits for net operating losses carried forward. The potential benefits of net operating losses have not been recognized in these financial statements because the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward in future years.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif">We must make certain estimates and judgments in determining income tax expense for financial statement purposes. These estimates and judgments occur in the calculation of certain tax assets and liabilities, which arise from differences in the timing of recognition of revenue and expense for tax and financial statement purposes.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif">Deferred tax assets and liabilities are determined based on the differences between financial reporting and the tax basis of assets and liabilities using the tax rates and laws in effect when the differences are expected to reverse. ASC 740 provides for the recognition of deferred tax assets if realization of such assets is more likely than not to occur. Realization of our net deferred tax assets is dependent upon our generating sufficient taxable income in future years in appropriate tax jurisdictions to realize benefit from the reversal of temporary differences and from net operating loss, or NOL, carryforwards. We have determined it more likely than not that these timing differences will not materialize and have provided a valuation allowance against substantially all of our net deferred tax asset.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif">Management will continue to evaluate the realizability of the deferred tax asset and its related valuation allowance. If our assessment of the deferred tax assets or the corresponding valuation allowance were to change, we would record the related adjustment to income during the period in which we make the determination. Our tax rate may also vary based on our results and the mix of income or loss in domestic and foreign tax jurisdictions in which we operate.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif">In addition, the calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax regulations. We recognize liabilities for anticipated tax audit issues in the U.S. and other tax jurisdictions based on our estimate of whether, and to the extent to which, additional taxes will be due. If we ultimately determine that payment of these amounts is unnecessary, we will reverse the liability and recognize a tax benefit during the period in which we determine that the liability is no longer necessary. We will record an additional charge in our provision for taxes in the period in which we determine that the recorded tax liability is less than we expect the ultimate assessment to be.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"><b> </b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif">ASC 740 which requires recognition of estimated income taxes payable or refundable on income tax returns for the current year and for the estimated future tax effect attributable to temporary differences and carry-forwards. Measurement of deferred income tax is based on enacted tax laws including tax rates, with the measurement of deferred income tax assets being reduced by available tax benefits not expected to be realized.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> <p id="xdx_84A_eus-gaap--IncomeTaxUncertaintiesPolicy_zt5aIar42Xk5" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"><i><span id="xdx_868_z9pzXWG2zICd">Uncertain Tax Positions</span>:</i></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif">The Financial Accounting Standards Board issued Interpretation No. 48, “Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement No. 109, Accounting for Income Taxes” (“FIN No. 48”) which was effective for the Company on January 1, 2007. FIN No. 48 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under FIN No. 48, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. The tax benefits recognized in the financial statements from such position should be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. FIN No. 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods and disclosure requirements.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif">Our federal and state income tax returns are open for fiscal years ending on or after June 30, 2007. We are not under examination by any jurisdiction for any tax year. At September 30, 2021, we had no material unrecognized tax benefits and no adjustments to liabilities or operations were required under FIN 48.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font: 10pt Times New Roman, Times, Serif"><i> </i></span></p> <p id="xdx_840_eus-gaap--NewAccountingPronouncementsPolicyPolicyTextBlock_zXdgfp8EYsPj" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"><i><span id="xdx_864_z5Jin7P4swY7">Recently Issued Accounting Pronouncements</span>:</i></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif">In January 2017, the FASB issued Accounting Standard Update (ASU) 2017-04, Intangibles-Goodwill and Other (Topic 350) which simplifies the test for goodwill impairment. To address concerns over the cost and complexity of the two-step goodwill impairment test, the amendments in this update remove the second step of the test. An entity will apply a one-step quantitative test and record the amount of goodwill impairment as the excess of a reporting unit’s carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. The new guidance does not amend the optional qualitative assessment of goodwill impairment. This update is effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif">In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value”. ASU 2018-13 removes and modifies existing disclosure requirements on fair value measurement, namely regarding transfers between levels of the fair value hierarchy and the valuation processes for Level 3 fair value measurements. Additionally, ASU 2018-13 adds further disclosure requirements for Level 3 fair value measurements, specifically changes in unrealized gains and losses and other quantitative information. ASU 2018-13 is effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif">In October 2018, the FASB issued ASU 2018-17, Consolidation (Topic 810): Targeted Improvements to the Related Party Guidance for Variable Interest Entities. ASU 2018-17 changes how entities evaluate decision-making fees under the variable interest entity guidance. To determine whether decision-making fees represent a variable interest, an entity considers indirect interests held through related parties under common control on a proportional basis, rather than in their entirety. This guidance will be adopted using a retrospective approach and is effective for the Company on January 1, 2020.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif">In December 2019, the FASB issued ASU 2019-12 - Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. This ASU provides an exception to the general methodology for calculating income taxes in an interim period when a year-to-date loss exceeds the anticipated loss for the year. This update also (1) requires an entity to recognize a franchise tax (or similar tax) that is partially based on income as an income-based tax and account for any incremental amount incurred as a non-income-based tax, (2) requires an entity to evaluate when a step-up in the tax basis of goodwill should be considered part of the business combination in which goodwill was originally recognized for accounting purposes and when it should be considered a separate transaction, and (3) requires that an entity reflect the effect of an enacted change in tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date. The Company adopted this ASU on January 1, 2021.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif">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.</span></p> <p id="xdx_80F_eus-gaap--SubstantialDoubtAboutGoingConcernTextBlock_zqExlESA4YKf" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"><b>Note 2. <span id="xdx_827_zTwubZROKm46">Going Concern</span></b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif">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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif">If a business combination transaction is not consummated, we do not believe that we could succeed in raising additional capital, from unrelated parties, needed to sustain our operations without some strategic transaction, such as a business combination or merger. If we are unable to consummate such a transaction, we expect that we would need to cease all operations and wind down. Although we are currently evaluating our strategic alternatives with respect to all aspects of our business, we cannot assure you that any actions that we take would raise or generate sufficient capital to fully address the uncertainties of our financial position.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> <p id="xdx_80D_eus-gaap--DebtDisclosureTextBlock_zYPlXfzFpdy6" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"><b>Note 3. <span id="xdx_82B_zW46xj2cl5ig">Convertible Note</span></b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif">On October 12, 2018, we issued a $<span id="xdx_907_eus-gaap--DebtInstrumentFaceAmount_c20181012__us-gaap--DebtInstrumentAxis__custom--ConvertiblePromissoryNoteMember__srt--TitleOfIndividualAxis__custom--IvoHeidenMember_pp0p0" title="Debt instrument, face amount">75,000</span> convertible promissory note to Ivo Heiden. The convertible note bears interest at <span id="xdx_902_eus-gaap--DebtInstrumentInterestRateStatedPercentage_iI_dp_uPercentage_c20181012__us-gaap--DebtInstrumentAxis__custom--ConvertiblePromissoryNoteMember__srt--TitleOfIndividualAxis__custom--IvoHeidenMember_zPbsrKAYFEE3" title="Debt instrument, interest rate">8</span>% per annum until paid or converted. The conversion price of the note is $<span id="xdx_906_eus-gaap--DebtInstrumentConvertibleConversionPrice1_c20181012__us-gaap--DebtInstrumentAxis__custom--ConvertiblePromissoryNoteMember__srt--TitleOfIndividualAxis__custom--IvoHeidenMember_pdd" title="Debt instrument, conversion price">0.34</span> 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 <span id="xdx_908_eus-gaap--DebtInstrumentMaturityDate_dd_c20181011__20181012__us-gaap--DebtInstrumentAxis__custom--ConvertiblePromissoryNoteMember__srt--TitleOfIndividualAxis__custom--IvoHeidenMember_zNfLYXTTG7rb" title="Debt instrument, maturity date">October 12, 2020</span>. On May 1, 2020, the convertible promissory note was extended to <span id="xdx_907_eus-gaap--DebtInstrumentMaturityDate_c20200429__20200501__us-gaap--DebtInstrumentAxis__custom--ConvertiblePromissoryNoteMember__srt--TitleOfIndividualAxis__custom--IvoHeidenMember__us-gaap--LoanRestructuringModificationAxis__us-gaap--ExtendedMaturityMember" title="Debt instrument, maturity date">April 30, 2022</span>. On January 6, 2021, the note holder waived interests and liability of the Company and terminated this note. During the three months ended September 30, 2021 and 2020 the Company expensed interest of $<span id="xdx_90B_eus-gaap--InterestExpenseDebt_c20210701__20210930__us-gaap--DebtInstrumentAxis__custom--ConvertiblePromissoryNoteMember__srt--TitleOfIndividualAxis__custom--IvoHeidenMember_pp0p0" title="Interest expense">0</span> and $<span id="xdx_90D_eus-gaap--InterestExpenseDebt_c20200701__20200930__us-gaap--DebtInstrumentAxis__custom--ConvertiblePromissoryNoteMember__srt--TitleOfIndividualAxis__custom--IvoHeidenMember_pp0p0" title="Interest expense">1,512</span>, respectively, related to this note.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif">On May 1, 2020, we issued a $<span id="xdx_901_eus-gaap--DebtInstrumentFaceAmount_iI_pp0p0_c20200501__us-gaap--DebtInstrumentAxis__custom--ConvertiblePromissoryNoteOneMember__srt--TitleOfIndividualAxis__custom--IvoHeidenMember_zPJsM10VQNY4" title="Debt instrument, face amount">90,000</span> convertible promissory note to Ivo Heiden. The convertible note bears interest at <span id="xdx_904_eus-gaap--DebtInstrumentInterestRateStatedPercentage_iI_dp_uPercentage_c20200501__us-gaap--DebtInstrumentAxis__custom--ConvertiblePromissoryNoteOneMember__srt--TitleOfIndividualAxis__custom--IvoHeidenMember_zdeDinEfV712" title="Debt instrument, interest rate">8</span>% per annum until paid or converted. The conversion price of the note is $<span id="xdx_907_eus-gaap--DebtInstrumentConvertibleConversionPrice1_iI_c20200501__us-gaap--DebtInstrumentAxis__custom--ConvertiblePromissoryNoteOneMember__srt--TitleOfIndividualAxis__custom--IvoHeidenMember_z2WbKzn8R231" title="Debt instrument, conversion price">0.4</span> 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 <span id="xdx_90B_eus-gaap--DebtInstrumentMaturityDate_dd_c20200429__20200501__us-gaap--DebtInstrumentAxis__custom--ConvertiblePromissoryNoteOneMember__srt--TitleOfIndividualAxis__custom--IvoHeidenMember_zdr98SK2ImA" title="Debt instrument, maturity date">May 1, 2022</span>. On January 6, 2021, the note holder waived interests and liability of the Company and terminated this note. During the three months ended September 30, 2021, and 2020 the Company expensed interest of $<span id="xdx_900_eus-gaap--InterestExpenseDebt_pp0p0_c20210701__20210930__us-gaap--DebtInstrumentAxis__custom--ConvertiblePromissoryNoteOneMember__srt--TitleOfIndividualAxis__custom--IvoHeidenMember_zxISOIVrmomc" title="Interest expense">0</span> and $<span id="xdx_900_eus-gaap--InterestExpenseDebt_pp0p0_c20200701__20200930__us-gaap--DebtInstrumentAxis__custom--ConvertiblePromissoryNoteOneMember__srt--TitleOfIndividualAxis__custom--IvoHeidenMember_z85cw0Y3wT31" title="Interest expense">1,815</span>, respectively, related to this note.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif">On September 1, 2017, we entered into a Loan Agreement with Ivo Heiden, our sole officer and director, under which we receive funding for general operating expenses from time-to-time as needed by the Company. The Loan Agreement bears interest of <span id="xdx_909_eus-gaap--DebtInstrumentInterestRateStatedPercentage_iI_dp_uPercentage_c20170901__us-gaap--TypeOfArrangementAxis__custom--LoanAgreementMember__srt--TitleOfIndividualAxis__custom--IvoHeidenMember_znj302B8kig4" title="Debt instrument, interest rate">8</span>% per annum and shall be due and payable on a date 366 days from the date of the loan. On May 1, 2020, the Loan Agreement was extended to <span id="xdx_90D_eus-gaap--DebtInstrumentMaturityDate_dd_c20200430__20200501__us-gaap--TypeOfArrangementAxis__custom--LoanAgreementMember__srt--TitleOfIndividualAxis__custom--IvoHeidenMember__us-gaap--LoanRestructuringModificationAxis__us-gaap--ExtendedMaturityMember_zZcLJedhgFzh" title="Debt instrument, maturity date">September 1, 2021</span>. 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. During the three months ended September 30, 2021 and 2020, we expensed interest of $<span id="xdx_90B_eus-gaap--InterestExpenseDebt_pp0p0_c20210701__20210930__us-gaap--TypeOfArrangementAxis__custom--LoanAgreementMember__srt--TitleOfIndividualAxis__custom--IvoHeidenMember_zr97MfUPHRwj" title="Interest expense">0</span> and $<span id="xdx_900_eus-gaap--InterestExpenseDebt_pp0p0_c20200701__20200930__us-gaap--TypeOfArrangementAxis__custom--LoanAgreementMember__srt--TitleOfIndividualAxis__custom--IvoHeidenMember_zk5UByejLSac" title="Interest expense">619</span>, respectively, related to this Loan Agreement.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif">In accordance with ASC # 815, Accounting for Derivative Instruments and Hedging Activities, we evaluated the note holder’s non-detachable conversion right provision and liquidated damages clause, contained in the terms governing the Convertible Note to determine whether the features qualify as an embedded derivative instrument at issuance. Such non-detachable conversion right provision and liquidated damages clause did not need to be accounted as derivative financial instruments.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> 75000 0.08 0.34 2020-10-12 2022-04-30 0 1512 90000 0.08 0.4 2022-05-01 0 1815 0.08 2021-09-01 0 619 <p id="xdx_809_eus-gaap--RelatedPartyTransactionsDisclosureTextBlock_zb0TO8J8hUF7" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"><b>Note 4. <span id="xdx_828_zM0yUcYjxvb4">Related Party Transactions</span></b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif">Due to Related Parties:</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif">On March 31, 2021, we entered into a Loan Agreement with New York Listing Management Inc, a related party of us, under which we receive funding for general operating expenses from time-to-time as needed by the Company. The Loan Agreement bears interest of <span id="xdx_904_eus-gaap--DebtInstrumentInterestRateStatedPercentage_iI_dp_uPercentage_c20210331__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--NewYorkListingManagementIncorporatedMember__us-gaap--TypeOfArrangementAxis__custom--LoanAgreementMember_zBVKRmUCnCu4" title="Debt instrument, interest rate">8</span>% per annum and shall be due and payable on a date 366 days from the date of the loan. As of September 30, and June 30, 2021, the outstanding balance on this loan was $<span id="xdx_908_eus-gaap--DueToRelatedPartiesCurrent_iI_pp0p0_c20210930_zSRIGWFUPgId" title="Advances to related parties">93,420</span> and $<span id="xdx_902_eus-gaap--DueToRelatedPartiesCurrent_iI_pp0p0_c20210630_zH4oGCgee38a" title="Advances to related parties">59,725</span>, respectively, with accrued interest of $<span id="xdx_902_eus-gaap--InterestPayableCurrent_iI_pp0p0_c20210930_z61G1Cja1S28" title="Accrued interest">2,090</span> and $<span id="xdx_905_eus-gaap--InterestPayableCurrent_iI_pp0p0_c20210630_z0UlhK95koi" title="Accrued interest">666</span>, respectively. During the three months ended September 30, 2021, we expensed interest of $<span id="xdx_90E_eus-gaap--InterestExpenseRelatedParty_c20210701__20210930__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--NewYorkListingManagementIncorporatedMember__us-gaap--TypeOfArrangementAxis__custom--LoanAgreementMember_pp0p0" title="Interest expenses, related party">1,424</span>, related to this Loan Agreement.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"> </span></p> 0.08 93420 59725 2090 666 1424 <p id="xdx_807_eus-gaap--SubsequentEventsTextBlock_zGZhi6rzbf2e" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"><b>Note 5. <span id="xdx_82A_zqIJm4DOPrjf">Subsequent Events</span></b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif"><b> </b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif">The Company’s management has performed subsequent events procedures through the date the financial statements were available to be issued. There were no subsequent events requiring adjustment to or disclosure in the financial statements.</span></p> XML 10 R1.htm IDEA: XBRL DOCUMENT v3.21.2
Cover - shares
3 Months Ended
Sep. 30, 2021
Oct. 25, 2021
Cover [Abstract]    
Document Type 10-Q  
Amendment Flag false  
Document Quarterly Report true  
Document Transition Report false  
Document Period End Date Sep. 30, 2021  
Document Fiscal Period Focus Q1  
Document Fiscal Year Focus 2022  
Current Fiscal Year End Date --06-30  
Entity File Number 000-21613  
Entity Registrant Name Ecomax, Inc.  
Entity Central Index Key 0001008653  
Entity Tax Identification Number 13-3865026  
Entity Incorporation, State or Country Code NV  
Entity Address, Address Line One 1 Rockefeller Plaza  
Entity Address, Address Line Two 10th floor  
Entity Address, City or Town New York  
Entity Address, State or Province NY  
Entity Address, Postal Zip Code 10020  
City Area Code (646)  
Local Phone Number 722-2931  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Non-accelerated Filer  
Entity Small Business true  
Entity Emerging Growth Company false  
Entity Shell Company true  
Entity Common Stock, Shares Outstanding   2,380,952
XML 11 R2.htm IDEA: XBRL DOCUMENT v3.21.2
Balance Sheets - USD ($)
Sep. 30, 2021
Jun. 30, 2021
Current assets:    
Cash
Total current assets
TOTAL ASSETS
Current liabilities:    
Accounts payable - trade 3,600 7,664
Advances from - related party 93,420 59,725
Accrued interest related party 2,090 666
Accured expenses 18,280 17,030
Accrued expenses - related party 8,000
Total current liabilities 117,390 93,085
Stockholders’ deficit:    
Preferred stock, $0.0001 par value; 50,000,000 authorized; none issued and outstanding at September 30, 2021 and June 30, 2021.
Common stock, $0.0001 par value; 450,000,000 shares authorized; 2,380,952 issued and outstanding at September 30, 2021 and June 30, 2021. 238 238
Additional paid-in capital 286,524 286,524
Accumulated deficit (404,152) (379,847)
Total stockholders’ deficit (117,390) (93,085)
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
XML 12 R3.htm IDEA: XBRL DOCUMENT v3.21.2
Balance Sheets (Parenthetical) - $ / shares
Sep. 30, 2021
Jun. 30, 2021
Statement of Financial Position [Abstract]    
Preferred stock, par value $ 0.0001 $ 0.0001
Preferred stock, shares authorized 50,000,000 50,000,000
Preferred stock, shares issued 0 0
Preferred stock, shares outstanding 0 0
Common stock, par value $ 0.0001 $ 0.0001
Common stock, shares authorized 450,000,000 450,000,000
Common stock, shares issued 2,380,952 2,380,952
Common stock, shares outstanding 2,380,952 2,380,952
XML 13 R4.htm IDEA: XBRL DOCUMENT v3.21.2
Statements of Operations (Unaudited) - USD ($)
3 Months Ended
Sep. 30, 2021
Sep. 30, 2020
Income Statement [Abstract]    
Revenues
Cost and expenses:    
General and administrative 22,881 1,524
Total operating expenses 22,881 1,524
Other income and expenses    
Interest expenses 1,424 3,946
Net loss $ (24,305) $ (5,470)
Per common share - basic and diluted    
Basic and diluted net loss $ (0.01) $ (0.00)
Weighted average shares    
Outstanding, basic and diluted 2,380,952 2,380,952
XML 14 R5.htm IDEA: XBRL DOCUMENT v3.21.2
Statements of Cash Flows (Unaudited) - USD ($)
3 Months Ended
Sep. 30, 2021
Sep. 30, 2020
Cash flows from operating activities:    
Net loss $ (24,305) $ (5,470)
Change in operating assets and liabilities:    
Increase (decrease) in accounts payable and accrued liabilities (9,390) 1,721
Net cash used by operating activities (33,695) (3,749)
Cash flows from financing activities:    
Advances from related party 33,695 3,749
Net cash provided by financing activities 33,695 3,749
Change in cash
Cash at beginning of period
Cash at end of period
XML 15 R6.htm IDEA: XBRL DOCUMENT v3.21.2
Statements of Stockholders' Deficit - USD ($)
Common Stock [Member]
Additional Paid-in Capital [Member]
Retained Earnings [Member]
Total
Balance at Jun. 30, 2020 $ 238 $ 61,037 $ (276,236) $ (214,961)
Balance, shares at Jun. 30, 2020 2,380,952      
Net loss (5,470) (5,470)
Balance at Sep. 30, 2020 $ 238 61,037 (281,706) (220,431)
Balance, shares at Sep. 30, 2020 2,380,952      
Balance at Jun. 30, 2021 $ 238 286,524 (379,847) (93,085)
Net loss (24,305) (24,305)
Balance at Sep. 30, 2021 $ 238 $ 286,524 $ (404,152) $ (117,390)
Balance, shares at Sep. 30, 2021 2,380,952      
XML 16 R7.htm IDEA: XBRL DOCUMENT v3.21.2
The Company and Significant Accounting Policies
3 Months Ended
Sep. 30, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
The Company and Significant Accounting Policies

Note 1. The Company and Significant Accounting Policies

 

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

 

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

 

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

 

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

 

Basis of Presentation:

 

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

 

Significant Accounting Policies:

 

Use of Estimates:

 

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

 

 

Cash and Cash Equivalents:

 

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

 

Property and Equipment:

 

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

 

Valuation of Long-Lived Assets:

 

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

 

Stock Based Compensation:

 

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

 

Fair Value of Financial Instruments:

 

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

 

 

Earnings per Common Share:

 

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

 

Income Taxes:

 

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

 

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

 

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

 

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

 

 

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

 

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

 

Uncertain Tax Positions:

 

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

 

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

 

 

Recently Issued Accounting Pronouncements:

 

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

 

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

 

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

 

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

 

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

 

 

XML 17 R8.htm IDEA: XBRL DOCUMENT v3.21.2
Going Concern
3 Months Ended
Sep. 30, 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, we do not believe that we could succeed in raising additional capital, from unrelated parties, needed to sustain our operations without some strategic transaction, such as a business combination or merger. If we are unable to consummate such a transaction, we expect that we would need to cease all operations and wind down. Although we are currently evaluating our strategic alternatives with respect to all aspects of our business, we cannot assure you that any actions that we take would raise or generate sufficient capital to fully address the uncertainties of our financial position.

 

XML 18 R9.htm IDEA: XBRL DOCUMENT v3.21.2
Convertible Note
3 Months Ended
Sep. 30, 2021
Debt Disclosure [Abstract]  
Convertible Note

Note 3. Convertible Note

 

On October 12, 2018, we issued a $75,000 convertible promissory note to Ivo Heiden. The convertible note bears interest at 8% per annum until paid or converted. The conversion price of the note is $0.34 per share, the closing price of the Company’s common stock on the date of issuance. Interest will be payable upon the maturity date at October 12, 2020. On May 1, 2020, the convertible promissory note was extended to April 30, 2022. On January 6, 2021, the note holder waived interests and liability of the Company and terminated this note. During the three months ended September 30, 2021 and 2020 the Company expensed interest of $0 and $1,512, respectively, related to this note.

 

On May 1, 2020, we issued a $90,000 convertible promissory note to Ivo Heiden. The convertible note bears interest at 8% per annum until paid or converted. The conversion price of the note is $0.4 per share, the closing price of the Company’s common stock on the date of issuance. Interest will be payable upon the maturity date at May 1, 2022. On January 6, 2021, the note holder waived interests and liability of the Company and terminated this note. During the three months ended September 30, 2021, and 2020 the Company expensed interest of $0 and $1,815, respectively, related to this note.

 

 

On September 1, 2017, we entered into a Loan Agreement with Ivo Heiden, our sole officer and director, under which we receive funding for general operating expenses from time-to-time as needed by the Company. The Loan Agreement bears interest of 8% per annum and shall be due and payable on a date 366 days from the date of the loan. On May 1, 2020, the Loan Agreement was extended to September 1, 2021. On January 6, 2021, the balance of this loan and accrued interests were waived by Ivo Heiden and the Loan Agreement was terminated on the same day. During the three months ended September 30, 2021 and 2020, we expensed interest of $0 and $619, respectively, related to this Loan Agreement.

 

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

 

XML 19 R10.htm IDEA: XBRL DOCUMENT v3.21.2
Related Party Transactions
3 Months Ended
Sep. 30, 2021
Related Party Transactions [Abstract]  
Related Party Transactions

Note 4. Related Party Transactions

 

Due to Related Parties:

 

On March 31, 2021, we entered into a Loan Agreement with New York Listing Management Inc, a related party of us, under which we receive funding for general operating expenses from time-to-time as needed by the Company. The Loan Agreement bears interest of 8% per annum and shall be due and payable on a date 366 days from the date of the loan. As of September 30, and June 30, 2021, the outstanding balance on this loan was $93,420 and $59,725, respectively, with accrued interest of $2,090 and $666, respectively. During the three months ended September 30, 2021, we expensed interest of $1,424, related to this Loan Agreement.

 

XML 20 R11.htm IDEA: XBRL DOCUMENT v3.21.2
Subsequent Events
3 Months Ended
Sep. 30, 2021
Subsequent Events [Abstract]  
Subsequent Events

Note 5. Subsequent Events

 

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

XML 21 R12.htm IDEA: XBRL DOCUMENT v3.21.2
The Company and Significant Accounting Policies (Policies)
3 Months Ended
Sep. 30, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Basis of Presentation

Basis of Presentation:

 

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

Use of Estimates

Use of Estimates:

 

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

 

 

Cash and Cash Equivalents

Cash and Cash Equivalents:

 

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

 

Property and Equipment

Property and Equipment:

 

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

 

Valuation of Long-Lived Assets

Valuation of Long-Lived Assets:

 

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

 

Stock Based Compensation

Stock Based Compensation:

 

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

 

Fair Value of Financial Instruments

Fair Value of Financial Instruments:

 

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

 

 

Earnings per Common Share

Earnings per Common Share:

 

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

 

Income Taxes

Income Taxes:

 

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

 

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

 

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

 

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

 

 

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

 

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

 

Uncertain Tax Positions

Uncertain Tax Positions:

 

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

 

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

 

 

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements:

 

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

 

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

 

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

 

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