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.
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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.
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.
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 currently has no business operations. While the Company does not
intend to limit itself to a particular industry and continues to seek potential
new business opportunities in different industries, as of the date of this
report, the Company plans to cooperate with Rocitin Company Limited, a Hong Kong
company ("Rocitin"), to purchase a variety of nutritional supplements (the
"Products") from Pharmazeutische Fabrik Evers GmbH & Co. KG, a German company
("PFE"), and distribute them through Rocitin in China and other potential
countries in Asia. The Products are expected to be shipped and stored in the
warehouse [to be] leased by Rocitin in Hong Kong and distributed directly in
Hong Kong and China by Rocitin on behalf of the Company (the "Distribution
Business").
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The Company entered into a term sheet with Rocitin in January 2023, which will
be incorporated into a purchase and distribution agreement that the Company
intends to execute in February 2023 (the "Purchase and Distribution Agreement").
Pursuant to the Purchase and Distribution Agreement, the Company will agree to
purchase the Products from Rocitin with an annual minimum amount of 5,000
bottles, in which each bottle contains 60 capsules, at HK $600 (approximately
$76.82) per bottle; Rocitin will agree to sell the Products and make the first
delivery batch of 1,000 bottles of the Products at the end of February 28,
2023. Purchase payments shall be made upon delivery and inspection of the
Products on a per bottle basis.
Pursuant to the Purchase and Distribution Agreement, Rocitin will agree to store
the Products purchased from PFE in an appropriate warehouse leased by Rocitin
and will distribute them in Hong Kong and China on behalf of the Company. The
Company and Rocitin will agree to share any gross profit generated by the
distribution on an 80/20 basis; that is, revenue generated from sales of the
Products to third parties minus the original cost of purchase of the Products
paid by the Company, will be shared between the Company and Rocitin on an 80/20
ratio.
The Company expects to execute the Purchase and Distribution Agreement in late
February 2023 and to commence the Distribution Business in March 2023. However,
there is no guarantee that the Purchase and Distribution Agreement will be
executed within such timeframe or at all, or that, if the Purchase and
Distribution Agreement is executed, there is no assurance that the Distribution
Business will be successful.
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.
Since the Company has not established any particular criteria upon which it
shall consider a business opportunity, its management has substantial
flexibility in identifying and selecting prospective new business opportunities.
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.
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The Company's intends to conduct its activities so as to avoid being classified
as an "Investment Company" under the Investment Company Act of 1940, and
therefore avoid application of the costly and restrictive registration and other
provisions of the Investment Company Act of 1940 and the regulations promulgated
thereunder.
The Company is a shell Company and the Company's common stock is "penny stock"
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.
Results of Operations during the three months ended December 31, 2022 as
compared to the three months ended December 31, 2021
We have not generated any revenues during the three months ended December 31,
2022 and 2021. We had total operating expenses of $26,465 related to general and
administrative expenses during the three months ended December 31, 2022 compared
to $23,527 during the same period in the prior year. We incurred interest
expenses of $4,587 during three months ended December 31, 2022 compared to
interest expenses of $2,020 during the three months ended December 31, 2021.
During the three months ended December 31, 2022 and 2021, we had a net loss of
$31,052 and $25,547, respectively. The increase in our net loss was due to the
increase in the service fees charged by vendors, and the increase in interest
expenses generated from the increased loan amount from the lender.
Results of Operations during the six months ended December 31, 2022 as compared
to the six months ended December 31, 2021
We have not generated any revenues during the six months ended December 31, 2022
and 2021. We had total operating expenses of $51,208 related to general and
administrative expenses during the six months ended December 31, 2022 compared
to $46,408 during the same period in the prior year. We incurred interest
expenses of $8,615 during six months ended December 31, 2022 compared to
interest expenses of $3,444 during the six months ended December 31, 2021.
During the six months ended December 31, 2022 and 2021, we had a net loss of
$59,823 and $49,852, respectively. The increase in our net loss was due to the
increase in the service fees charged by vendors, and the increase in interest
expenses generated from the increased loan amount from the lender.
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.
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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,
? the Distribution Business,
? registered agent fees and accounting fees, and
? investigating, analyzing and consummating an acquisition or business
combination.
On December 31, 2022 and June 30, 2022, we had no current assets. As of December
31, 2022, we had $267,513 in liabilities, consisting of accounts payable of
$3,250, an advance from a related party of $242,959, accrued interest due to
related parties of $11,943 in one loan agreement, and accrued expenses of
$9,361. As of June 30, 2022, we had $207,690 in liabilities consisting of
accounts payable of $3,250, advance from a related party of $191,091, accrued
interest due to related parties of $3,329 in one loan agreement, and accrued
expenses of $10,020.
During the six months ended December 31, 2022, we had negative cash flow from
operating activities of $51,868 due to a net loss of $59,823. We financed our
negative cash flow from operations $51,868 in advances from New York Listing
Management Inc., an affiliated party. During the six months ended December 31,
2021, we had negative cash flow from operating activities of $54,775 due to a
net loss of $49,852. We financed our negative cash flow from operations through
$54,775 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, as well as from
the revenue expected to be generated from operations, and believes it can
satisfy its cash requirements so long as it is able to obtain such financing
from New York Listing Management Inc and the Distribution Business commences
successfully. The Company expects that money borrowed and generated from such
sources will be used during the next 12 months to satisfy the Company's
operating costs, professional fees and 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 December 31, 2022 and 2021,
the outstanding balance on this loan was $242,959 and $114,500, respectively,
with accrued interest of $11,943 and $4,110, respectively. As of December 31,
2022, we expensed interest of $4,587, 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 December 31, 2022, and 2021, we did not have any off-balance sheet
arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K promulgated
under the Securities Act of 1934.
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