ITEM
1. FINANCIAL STATEMENTS
ECOMAX,
INC.
BALANCE
SHEETS
Balance
Sheets as of September 30, 2022 and June 30, 2022
ECOMAX,
INC.
STATEMENTS
OF OPERATIONS
ECOMAX,
INC.
STATEMENTS
OF CASH FLOWS
ECOMAX,
INC.
STATEMENTS
OF STOCKHOLDERS’ DEFICIT
Ecomax,
Inc.
Background
and Significant Accounting Policies
September
30, 2022
Note
1. The Company and Significant Accounting Policies
Ecomax,
Inc., formerly known as 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.; and; |
| |
● |
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. |
All
share and per share information, including earnings per share, in this Form 10-Q 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, 2022 or June 30, 2022.
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 September 30, 2022 and June 30, 2022, 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, 2022, we had no material unrecognized tax benefits and no adjustments to
liabilities or operations were required under FIN 48.
Recently
Issued Accounting Pronouncements:
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 July 1, 2021. Upon adoption, there was no effect to the Company.
The
Company has considered all new accounting pronouncements and has concluded that there are no new pronouncements that may have a material
impact on results of operations, financial condition, or cash flows, based on current information.
Note
2. Going Concern
The
accompanying financial statements have been prepared assuming the Company will continue as a going concern. The Company has incurred
losses, has negative operational cash flows and has no revenues. The future of the Company is dependent upon Management success in its
efforts and limited resources to pursue and effect a business combination. These conditions raise substantial doubt about the Company’s
ability to continue as a going concern. These financial statements do not include any adjustments that might arise from this uncertainty.
Currently,
we get financial support for daily operating expenses from our related party. 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 either continue to borrow funds from related party, or 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. Related Party Transactions
Note
Payable – related party:
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”). 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 April 1, 2022, the Loan Agreement was
extended to March 31, 2023. As of September 30, 2022 and June 30, 2022, the outstanding balance on this loan was $214,970
and $191,091,
with accrued interest of $7,356
and $3,329,
respectively. During the three months ended September 30, 2022 and September 30, 2021, the Company borrowed $23,879
and $33,695,
respectively, under this Loan Agreement. During the three months ended September 30, 2022 and September 30, 2021 we expensed
interest of $4,027
and $1,424,
respectively, related to this Loan Agreement.
Note
4. 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.
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” or “we”) discuss
future expectations, contain projections of our plan of operation or financial condition or state other forward-looking information.
Forward-looking statements give our current expectations or forecasts of future events. You can identify these statements by the fact
that they do not relate strictly to historical or current facts. They use of words such as “anticipate,” “estimate,”
“expect,” “project,” “intend,” “plan,” “believe,” and other words and terms
of similar meaning in connection with any discussion of future operating or financial performance. From time to time, we also may provide
forward-looking statements in other materials we release to the public.
General
Background of the Company
Ecomax,
Inc. (formerly known as Ecomat Inc.) was incorporated on December 14, 1995 pursuant to the laws of the State of Delaware and was formed
to develop the Ecomat concept - an environmentally sound solution to the current standard dry-cleaning method that utilizes perchloroethylene,
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 the Company’s 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’s 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 represented 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, the then Chief Executive Officer, Chief Financial Officer, sole director, and Chairman
of the board of directors of the Company, resigned from all of his positions with the Company and the resignations became effective on
January 6, 2021. Ms. Yang Gui was appointed as the Chief Executive Officer, Chief Financial Officer, sole director, and Chairwoman of
the board of directors of the Company, effective on January 6, 2021.
On
March 11, 2021, upon the departure of Ms. Yang Gui, Mr. Yu Yam Anthony Chau was appointed as the Chief Executive Officer, Chief Financial
Officer, sole director, and Chairman of the board of directors of the Company, effective on March 11, 2021.
On
March 18, 2021, by unanimous written consent of the board of directors of the Company, the board of directors adopted resolutions approving
1) a reverse split of the Company’s common stock at a ratio of 1-for-10, whereby every 10 shares of the issued and outstanding
common stock shall be combined into one share of issued and outstanding common stock (the “Reverse Stock Split”); 2) an increase
in the number of the authorized capital stock from 75,000,000 to 500,000,000, with the par value remaining at $0.0001 per share, consisting
of 450,000,000 shares of common stock, par value $0.0001 per share and 50,000,000 shares of preferred stock, par value $0.0001 per share
(the “Increase of Authorized Stock”); 3) a change of the Company’s name and ticker from “Ecomat, Inc.”
and “ECMT,” to “Ecomax, Inc.” and “ECMX” (the “Change of Name,” together with the Reverse
Stock Split and the Increase of Authorized Stock, collectively the “Corporate Actions”); 4) amendments to its articles of
incorporation to reflect the Corporate Actions (the “Amendments of Articles of Incorporation”); and 5) a proposal that such
resolutions be submitted for a vote of the stockholders of the Company.
On
March 18, 2021, the stockholder holding in the aggregate 20,205,000 shares of common stock or approximately 85% of the common stock outstanding
on such date, approved the Corporate Actions.
On
April 1, 2021, the Company filed a preliminary information statement on Schedule 14C with the SEC.
On
April 13, 2021, the Company filed a definitive information statement on Schedule 14C with SEC.
On
April 20 and 21, 2021, the Company filed a certificate of change and a certificate of amendment with the Secretary of State of the State
of Nevada 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.
Our ticker symbol on OTC Markets was then
changed to EMAX and our name was changed to Ecomax, Inc.
On
September 30, 2022, upon the departure of Mr. Yu Yam Anthony Chau, Mr. Raymond
Chen was appointed as the Chief Executive Officer, Chief Financial Officer, sole director, and Chairman of the board of directors
of the Company, effective on September 30, 2022.
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.
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:
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● |
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, 2022 as compared to the three months ended September 30, 2021
We
have not generated any revenues during the three months ended September 30, 2022 and 2021. We had total operating expenses of $24,744
related to general and administrative expenses during the three months ended September 30, 2022 compared to $22,881 during the same period
in the prior year. We incurred interest expenses of $4,027 during three months ended September 30, 2022 compared to interest expenses
of $1,424 during the three months ended September 30, 2021. During the three months ended September 30, 2022 and 2021, we had a net loss
of $28,771 and $24,305, respectively. The increase in our net loss was due the increase on the service fees charged by venders.
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, 2022 and September 30, 2021, we had no current assets. As of September 30, 2022, we had $236,461 in liabilities consisting
of accounts payable of $3,615, advance from a related party of $214,970, accrued interest due to related parties of $7,356 in one loan
agreement, and accrued expenses of $10,520.
During
the three months ended September 30, 2022, we had negative cash flow from operating activities of $23,879 due to a net loss of $28,771.
We financed our negative cash flow from operations $23,879 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 “NYLM Loan Agreement”).
The NYLM Loan Agreement bears an interest rate of 8% per annum and is due and payable on the date that is three hundred sixty-six (366)
days from the date of such loan agreement. On March 31, 2022, we extended the NYLM Loan Agreement with New York Listing Management Inc.
and such loan agreement will expire on March 31, 2023. As of September 30, 2022 and 2021, the outstanding balance on this loan was $214,970
and $93,420, respectively, with accrued interest of $7,356 and $2,090, respectively. As of September 30, 2022, we expensed interest of
$4,027, related to this NYLM 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, 2022 and 2021 with an explanatory paragraph on going concern.
Off-Balance
Sheet Arrangements
As
of September 30, 2022, and 2021, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K
promulgated under the Securities Act of 1934.
