U.S.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
FORM 10-K
(Mark One)
| (Mark One) | ||
| x | ANNUAL REPORT | |
For the fiscal year ended December 31, 2013
| For the fiscal year ended December 31, 2019 | ||
| o | TRANSITION REPORT | |
| For the transition period from ______________ to ______________________. | ||
For the transition period from ______________ to ______________
Commission file number: 333-213197
APEX
Apex 11 INC.
Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 46-2823100 | |||
(State or incorporation or organization) | (I.R.S. Employer | |||
| Identification No.) | ||||
8217 East Spanish Boot Road
Carefree, Arizona 85377
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (480) 619-1575
Securities registered under Section 12(b) of the Exchange Act:None.None
Securities registered under Section 12(g) of the Exchange Act:
Common Stock, $0.0001 par value $0.001 per share
(Title of Class)
Check whether
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨o No x
Check whether
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ¨o No x
Check
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 past 90 days. Yeso No x No ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). Yes o No x No ¨
Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-K (§229.405 of this chapter) contained herein, and no disclosure will be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporatedIndicate by reference in Part III of this Form 10-K or any amendment to this Form 10-K.
Checkcheck mark whether the registrant is a large accelerated filer, an acceleratedaccelerate filer, a non-accelerated filer, or a smaller reporting company or, an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer” and, “smaller reporting company”, and “emerging growth company”, in Rule 12b-2 of the Exchange Act. (Check one):
| Large | accelerated filer | |||
| Accelerated filer o | ||||
| Non-accelerated filer o | ||||
Smaller | reporting company x Emerging growth company o |
(Do
If an emerging growth company, indicate by check mark if the registrant has elected not check if a smaller reporting company.)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. o
CheckIndicate by check mark whether the issuerregistrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes x No o¨
The aggregate market value
At June 24, 2021 there were 21,534,014 shares of the common stock held by non-affiliates of the issuer was $0.00 on June 30, 2013.
APPLICABLE ONLY TO CORPORATE REGISTRANTS
As of February 21, 2014, there were 10,000,000 shares of common stock, par value $.0001,registrant’s Common Stock issued and outstanding.
| ii |
FORWARD-LOOKING STATEMENTS
Certain statements made inApex 11 Inc.
FORM 10-K
For The Fiscal Year Ended December 31, 2019
| iii |
Explanatory Note
In this Annual Report on Form 10-K, are “forward-looking statements” (withinApex 11 Inc. is sometimes referred to as the meaning of“Company”, “we”, “our”, “us” or “registrant” and U.S. Securities and Exchange Commission is sometimes referred to as the Private Securities Litigation Reform Act of 1995) regarding the plans and objectives of management for future operations. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of APEX 11 Inc.(the “Company”) to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The forward-looking statements included herein are based on current expectations that involve numerous risks and uncertainties. The Company’s plans and objectives are based, in part, on assumptions involving the continued expansion of business. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the control of the Company. Although the Company believes its assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, there can be no assurance the forward-looking statements included in this Report will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by the Company or any other person that the objectives and plans of the Company will be achieved.“SEC”.
Item 1. Description of Business.
(a) Business Development
APEXOur Company
Apex 11 Inc. (the “Company” or the “Registrant”) was incorporated under the laws ofin the State of Delaware on May 20, 2013, to engage in any lawful corporate undertaking, including, but not limited to, selected mergers and acquisitions. The Company has been in the developmental stage since inception and has been inactive since inception.no operations to date. Other than issuing shares to its original shareholder, the Company never commenced any operational activities.
Our principal executive offices are located at 8217 East Spanish Boot Road, Carefree, Arizona 85377. Our telephone number is (480) 619-1575. Our fiscal year end is December 31.
Principal Business
Apex 11 Inc. intends to seek to acquire assets or shares of an entity actively engaged in business which generates revenues, in exchange for its securities. The Company intends to serve as a vehicle to effect an asset acquisition, merger, exchange of capital stock or other business combination with a domestic or foreign business.
(b) Business of Issuer
Based on proposed business activities, we are a “blank check” company. The SEC defines those companies as “any development stage company that is issuing a penny stock, within the meaning of Section 3 (a)(51) of the Exchange Act, and that has no specific business plan or purpose, or has indicated that its business plan is to merge with an unidentified company or companies.” Many states have enacted statutes, rules and regulations limiting the sale of securities of “blank check” companies in their respective jurisdictions. Management does not intend to undertake any efforts to cause a market to develop in our securities, either debt or equity, until we have successfully concluded a business combination. We intend to comply with the periodic reporting requirements of the Exchange Act for so long as we are subject to those requirements.
We were organized as a vehicle to investigate and, if such investigation warrants, acquire a target company or business seeking the perceived advantages of being a publicly held corporation. Our principal business objective for the next 12 months and beyond such time will be to achieve long-term growth potential through a combination with a business rather than immediate, short-term earnings. We will not restrict our potential candidate target companiesits search to any specific business, industry, or geographical location and thus,the Company may acquire any type of business.
The analysis of new business opportunities has and will be undertaken by or under the supervision of the officers and directors of the Registrant. The Registrant has considered potential acquisition transactions with several companies, but as of this date has not entered into any Letter of Intent or other agreement with any party. The Registrant has unrestricted flexibility in seeking, analyzing and participating in potential business opportunities. In its efforts to analyze potential acquisition targets, the Registrant will consider the following kinds of factors:
(a) Potential for growth, indicated by new technology, anticipated market expansion or new products;
(b) Competitive position as compared to other firms of similar size and experience within the industry segment as well as within the industry as a whole;
(c) Strength and diversity of management, either in place or scheduled for recruitment;
(d) Capital requirements and anticipated availability of required funds, to be provided by the Registrant or from operations, through the sale of additional securities, through joint ventures or similar arrangements or from other sources;
(e) The cost of participation by the Registrant as compared to the perceived tangible and intangible values and potentials;
(f) The extent to which the business opportunity can be advanced;
(g) The accessibility of required management expertise, personnel, raw materials, services, professional assistance and other required items; and
(h) Other relevant factors.
In applying the foregoing criteria, no one of which will be controlling, management will attempt to analyze all factors and circumstances and make a determination based upon reasonable investigative measures and available data. Potentially available business opportunities may occur in many different industries, and at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities extremely difficult and complex. Due to the Registrant’s limited capital available for investigation, the Registrant may not discover or adequately evaluate adverse facts about the opportunity to be acquired.
Form of Acquisition
The manner in which the Registrant participates in an opportunity will depend upon the nature of the opportunity, the respective needs and desires of the Registrant and the promoters of the opportunity, and the relative negotiating strength of the Registrant and such promoters.
It is likely that the Registrant will acquire its participationparticipate in a business opportunity through the issuanceventure of common stockvirtually any kind or other securities of the Registrant. Although the terms of any such transaction cannot be predicted, it should be noted that in certain circumstances the criteria for determining whether or not an acquisition is a so-called “tax free” reorganization under Section 368(a)(1) of the Internal Revenue Code of 1986, as amended (the “Code”), depends upon whether the owners of the acquired business own 80% or more of the voting stock of the surviving entity. If a transaction were structured to take advantage of these provisions rather than other “tax free” provisions provided under the Code, all prior stockholders would in such circumstances retain 20% or less of the total issued and outstanding shares of the surviving entity. Under other circumstances, depending upon the relative negotiating strength of the parties, prior stockholders may retain substantially less than 20% of the total issued and outstanding shares of the surviving entity. This could result in substantial additional dilution to the equity of those who were stockholders of the Registrant prior to such reorganization.
The present stockholders of the Registrant will likely not have control of a majority of the voting shares of the Registrant following a reorganization transaction. As part of such a transaction, all or a majority of the Registrant’s directors may resign and new directors may be appointed without any vote by stockholders.
In the case of an acquisition, the transaction may be accomplished upon the sole determination of management without any vote or approval by stockholders. In the case of a statutory merger or consolidation directly involving us, it will likely be necessary to call a stockholders’ meeting and obtain the approval of the holders of a majority of the outstanding shares. The necessity to obtain such stockholder approval may result in delay and additional expense in the consummation of any proposed transaction and will also give rise to certain appraisal rights to dissenting stockholders. Most likely, management will seek to structure any such transaction so as not to require stockholder approval.
It is anticipated that the investigation of specific business opportunities and the negotiation, drafting and execution of relevant agreements, disclosure documents and other instruments will require substantial management time and attention and substantial cost for accountants, attorneys and others. If a decision is made not to participate in a specific business opportunity, the costs theretofore incurred in the related investigation would not be recoverable. Furthermore, even if an agreement is reached for the participation in a specific business opportunity, the failure to consummate that transaction may result in the loss to the Registrant of the related costs incurred.
We presently have no employees. Our officers and directors are engaged in outside business activities and anticipate that he will devote to our business only several hours per week until the acquisition of a successful business opportunity has been consummated. We expect no significant changes in the number of our employees other than such changes, if any, incident to a business combination.
Item 1A. Risk Factors.
Risk Factors
An investment in the company is highly speculative in nature and involves an extremely high degree of risk.
Our Business Is Difficult To Evaluate Because We Have No Operating History.
As we have no operating history or revenue and only minimal assets, there is a risk that we will be unable to continue as a going concern and consummate a business combination. We have had no recent operating history nor any revenues or earnings from operations since inception. We have no significant assets or financial resources. We will, in all likelihood, sustain operating expenses without corresponding revenues, at least until the consummation of a business combination. This may result in our incurring a net operating loss that will increase continuously until we can consummate a business combination with a profitable business opportunity. We cannot assure you that we can identify a suitable business opportunity and consummate a business combination.
There Is Competition For Those Private Companies Suitable For A Merger Transaction Of The Type Contemplated By Management.
We are in a highly competitive market for a small number of business opportunities which could reduce the likelihood of consummating a successful business combination. We are and will continue to be an insignificant participant in the business of seeking mergers with, joint ventures with and acquisitions of small private and public entities. A large number of established and well-financed entities, including small public companies and venture capital firms, are active in mergers and acquisitions of companies that may be desirable target candidates for us. Nearly all these entities have significantly greater financial resources, technical expertise and managerial capabilities than we do; consequently, we will be at a competitive disadvantage in identifying possible business opportunities and successfully completing a business combination. These competitive factors may reduce the likelihood of our identifying and consummating a successful business combination.
Future Success Is Highly Dependent On The Ability Of Management To Locate And Attract A Suitable Acquisition.
The nature of our operations is highly speculative and there is a consequent risk of loss of your investment. The success of our plan of operation will depend to a great extent on the operations, financial condition and management of the identified business opportunity. While management intends to seek business combination(s) with entities having established operating histories, we cannot assure you that we will be successful in locating candidates meeting that criterion. In the event we complete a business combination, the success of our operations may be dependent upon management of the successor firm or venture partner firm and numerous other factors beyond our control.
nature. The Company Has No Existing Agreement For A Business Combination Or Other Transaction.
We have no arrangement, agreement or understanding with respect to engaging in a merger with, joint venture with or acquisition of, a private or public entity. No assurances can be given that we will successfully identify and evaluate suitable business opportunities or that we will conclude a business combination. Management has not identified any particular industry or specific business within an industry for evaluation. We cannot guarantee that we will be able to negotiate a business combination on favorable terms, and there is consequently a risk that funds allocated to the purchase of our shares will not be invested in a company with active business operations.
Management Intends To Devote Only A Limited Amount Of Time To Seeking A Target Company Which May Adversely Impact Our Ability To Identify A Suitable Acquisition Candidate.
While seeking a business combination, management anticipates devoting no more than a few hours per week to our affairs. Our officers have not entered into written employment agreements with us and are not expected to do so in the foreseeable future. This limited commitment may adversely impact our ability to identify and consummate a successful business combination.
The Time And Cost Of Preparing A Private Company To Become A Public Reporting Company May Preclude Us From Entering Into A Merger Or Acquisition With The Most Attractive Private Companies.
Target companies that fail to comply with SEC reporting requirements may delay or preclude acquisition. Sections 13 and 15(d) of the Exchange Act require reporting companies to provide certain information about significant acquisitions, including certified financial statements for the company acquired, covering one, two, or three years, depending on the relative size of the acquisition. The time and additional costs that may be incurred by some target entities to prepare these statements may significantly delay or essentially preclude consummation of an acquisition. Otherwise suitable acquisition prospects that do not have or are unable to obtain the required audited statements may be inappropriate for acquisition so long as the reporting requirements of the Exchange Act are applicable.
The Company May Be Subject To Further Government Regulation Which Would Adversely Affect Our Operations.
Although we will be subject to the reporting requirements under the Exchange Act, management believes we will not be subject to regulation under the Investment Company Act of 1940, as amended (the “Investment Company Act”), since we will not be engaged in the business of investing or trading in securities. If we engage in business combinations which result in our holding passive investment interests in a number of entities, we could be subject to regulation under the Investment Company Act. If so, we would be required to register as an investment company and could be expected to incur significant registration and compliance costs. We have obtained no formal determination from the Securities and Exchange Commission as to our status under the Investment Company Act and, consequently, violation of the Act could subject us to material adverse consequences.
Any Potential Acquisition Or Merger With A Foreign Company May Subject Us To Additional Risks.
If we enter into a business combination with a foreign concern, we will be subject to risks inherent in business operations outside of the United States. These risks include, for example, currency fluctuations, regulatory problems, punitive tariffs, unstable local tax policies, trade embargoes, risks related to shipment of raw materials and finished goods across national borders and cultural and language differences. Foreign economies may differ favorably or unfavorably from the United States economy in growth of gross national product, rate of inflation, market development, rate of savings, and capital investment, resource self-sufficiency and balance of payments positions, and in other respects.
There Is Currently No Trading Market For Our Common Stock.
Outstanding shares of our Common Stock cannot be offered, sold, pledged or otherwise transferred unless subsequently registered pursuant to, or exempt from registration under, the Securities Act and any other applicable federal or state securities laws or regulations. These restrictions will limit the ability of our stockholders to liquidate their investment.
Our Business Will Have No Revenues Unless And Until We Merge With Or Acquire An Operating Business.
We are a development stage company and have had no revenues from operations. We may not realize any revenues unless and until we successfully merge with or acquire an operating business.
The Company Intends To Issue More Shares In A Merger Or Acquisition, Which Will Result In Substantial Dilution.
Our certificate of incorporation authorizes the issuance of a maximum of 100,000,000 shares of common stock and a maximum of 5,000,000 shares of preferred stock. Any merger or acquisition effected by us may result in the issuance of additional securities without stockholder approval and may result in substantial dilution in the percentage of our common stock held by our then existing stockholders. Moreover, the common stock issued in any such merger or acquisition transaction may be valued on an arbitrary or non-arm’s-length basis by our management, resulting in an additional reduction in the percentage of common stock held by our then existing stockholders. Our Board of Directors has the power to issue any or all of such authorized but unissued shares without stockholder approval. To the extent that additional shares of Common Stock or Preferred Stock are issued in connection with a business combination or otherwise, dilution to the interests of our stockholders will occur and the rights of the holders of Common Stock might be materially adversely affected.
The Company Has Conducted No Market Research Or Identification Of Business Opportunities, Which May Affect Our Ability To Identify A Business To Merge With Or Acquire.
We have neither conducted nor have others made available to us results of market research concerning prospective business opportunities. Therefore, we have no assurances that market demand exists for a merger or acquisition as contemplated by us. Our management has not identified any specific business combination or other transactions for formal evaluation by us, such that it may be expected that any such target business or transaction will present such a level of risk that conventional private or public offerings of securities or conventional bank financing will not be available. There is no assurance that we will be able to acquireseek a business opportunity on terms favorablewith entities which have recently commenced operations, or which wish to us. Decisions as to which business opportunity to participateutilize the public marketplace in will be unilaterally made by our management, which may act without the consent, vote or approval of our stockholders.
Because We May Seek To Complete A Business Combination Through A “Reverse Merger”, Following Such A Transaction We May Not Be Able To Attract The Attention Of Major Brokerage Firms.
Additional risks may exist since we will assist a privately held business to become public through a “reverse merger.” Securities analysts of major brokerage firms may not provide coverage of our Company since there is no incentive to brokerage firms to recommend the purchase of our common stock. No assurance can be given that brokerage firms will want to conduct any secondary offerings on behalf of our post-merger company in the future.
We Cannot Assure You That Following A Business Combination With An Operating Business, Our Common Stock Will Be Listed On NASDAQ Or Any Other Securities Exchange.
Following a business combination, we may seek the listing of our common stock on NASDAQ or the American Stock Exchange. However, we cannot assure you that following such a transaction, we will be able to meet the initial listing standards of either of those or any other stock exchange, or that we will be able to maintain a listing of our common stock on either of those or any other stock exchange. After completing a business combination, until our common stock is listed on the NASDAQ or another stock exchange, we expect that our common stock would be eligible to trade on the OTC Bulletin Board, another over-the-counter quotation system, or on the “pink sheets,” where our stockholders may find it more difficult to dispose of shares or obtain accurate quotations as to the market value of our common stock. In addition, we would be subject to an SEC rule that, if it failed to meet the criteria set forth in such rule, imposes various practice requirements on broker-dealers who sell securities governed by the rule to persons other than established customers and accredited investors. Consequently, such rule may deter broker-dealers from recommending or selling our common stock, which may further affect its liquidity. This would also make it more difficult for usorder to raise additional capital following a business combination.
There Is No Public Market For Our Common Stock, Nor Have We Ever Paid Dividends On Our Common Stock.
There is no public trading market for our common stock and none is expectedin order to develop in the foreseeable future unless and until we complete a business combination with an operating business and such business files a registration statement under the Securities Act of 1933, as amended.
Additionally, we have never paid dividends on our Common Stock and do not presently intend to pay any dividends in the foreseeable future. We anticipate that any funds available for payment of dividends will be re-invested into the Company to further its business strategy.
Authorization of Preferred Stock.
Our Certificate of Incorporation authorizes the issuance of up to 5,000,000 shares of preferred stock with designations, rights and preferences determined from time to time by its Board of Directors. Accordingly, our Board of Directors is empowered, without stockholder approval, to issue preferred stock with dividend, liquidation, conversion, voting, or other rights which could adversely affect the voting power or other rights of the holders of the common stock. In the event of issuance, the preferred stock could be utilized, under certain circumstances, as a method of discouraging, delaying or preventing a change in control of the Company. Although we have no present intention to issue any shares of its authorized preferred stock, there can be no assurance that we will not do so in the future.
Control by Management.
Management currently owns 100% of all the issued and outstanding capital stock of the Company. Consequently, management has the ability to control the operations of the Company and will have the ability to control substantially all matters submitted to stockholders for approval, including:
Richard Chiang, our Chief Executive Officer and Director, is the beneficial owner of 10,000,000 shares of our common stock. Accordingly, this concentration of ownership by itself may have the effect of impeding a merger, consolidation, takeover or other business consolidation, or discouraging a potential acquirer from making a tender offer for the common stock.
This Report Contains Forward-Looking Statements And Information Relating To Us, Our Industry And To Other Businesses.
These forward-looking statements are based on the beliefs of our management, as well as assumptions made by and information currently available to our management. When used in this prospectus, the words “estimate,” “project,” “believe,” “anticipate,” “intend,” “expect” and similar expressions are intended to identify forward-looking statements. These statements reflect our current views with respect to future events and are subject to risks and uncertainties that may cause our actual results to differ materially from those contemplated in our forward-looking statements. We caution you not to place undue reliance on these forward-looking statements, which speak only as of the date of this prospectus. We do not undertake any obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of this prospectus or to reflect the occurrence of unanticipated events.
Item 1B. Unresolved Staff Comments.
None.
Item 2. Description of Property.
We neither rent nor own any properties. We currently have no policy with respect to investments or interests in real estate, real estate mortgages or securities of, or interests in, persons primarily engaged in real estate activities.
Item 3. Legal Proceedings.
There are not presently any material pending legal proceedings to which the Registrant is a party or as to which any of its property is subject, and no such proceedings are known to the Registrant to be threatened or contemplated against it.
Item 4. Mining Safety Disclosures.
Not applicable.
PART II
Item 5. Market for Common Equity, Related Stockholder Matters and Small Business Issuer Purchases of Equity Securities.
Common Stock
Our Certificate of Incorporation authorizes the issuance of up to 100,000,000 shares of common stock, par value $.0001 per share (the “Common Stock”). The Common Stock is not listed on a publicly-traded market. As of December 31, 2013, there was one holder of record of the Common Stock.
Preferred Stock
Our Certificate of Incorporation authorizes the issuance of up to 5,000,000 shares of preferred stock, par value $.0001 per share (the “Preferred Stock”). The Company has not yet issued any of its preferred stock.
Dividends
We have not paid any dividends on our common stock to date and do not intend to pay dividends prior to the completion of a business combination. The payment of dividends in the future will be contingent upon our revenues and earnings, if any, capital requirements and general financial condition subsequent to completion of a business combination. The payment of any dividends subsequent to a business combination will be within the discretion of our then board of directors. It is the present intention of our board of directors to retain all earnings, if any, for use in our business operations and, accordingly, our board does not anticipate declaring any dividends in the foreseeable future.
Securities Authorized for Issuance under Equity Compensation Plans
The Company does not have any equity compensation plans or any individual compensation arrangements with respect to its common stock or preferred stock. The issuance of any of our common or preferred stock is within the discretion of our Board of Directors, which has the power to issue any or all of our authorized but unissued shares without stockholder approval.
Recent Sales of Unregistered Securities
On May 20, 2013, the Company offered and sold 10,000,000 shares of Common Stock to Richard Chiang, its sole officer and director, in exchange for incorporation fees and annual resident agent fees in the State of Delaware, and developing our business concept and plan. The Company sold these shares of Common Stock under the exemption from registration provided by Section 4(2) of the Securities Act.
We relied upon Section 4(2) of the Securities Act of 1933, as amended for the above issuances. We believed that Section 4(2) was available because:
In connection with the above transactions, we provided the following to all investors:
The Company’s Board of Directors has the power to issue any or all of the authorized but unissued Common Stock without stockholder approval. The Company currently has no commitments to issue any shares of common stock. However, the Company will, in all likelihood, issue a substantial number of additional shares in connection with a business combination. Since the Company expects to issue additional shares of common stock in connection with a business combination, existing stockholders of the Company may experience substantial dilution in their shares. However, it is impossible to predict whether a business combination will ultimately result in dilution to existing shareholders. If the target has a relatively weak balance sheet, a business combination may result in significant dilution. If a target has a relatively strong balance sheet, there may be little or no dilution.
Issuer Purchases of Equity Securities
None.
Item 6. Selected Financial Data
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide this information.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation.
We were organized as a vehicle to investigate and, if such investigation warrants, acquire a target company or business seeking the perceived advantages of being a publicly held corporation. Our principal business objective for the next 12 months and beyond such time will be to achieve long-term growth potential through a combination with a business rather than immediate, short-term earnings. We will not restrict our potential candidate target companies to any specific business, industry or geographical location and, thus, may acquire any type of business.
We do not currently engage in any business activities that provide cash flow. The costs of investigating and analyzing business combinations for the next 12 months and beyond such time will be paid with amounts to be loaned to or invested in us by our stockholders, management or other investors.
During the next twelve months we anticipate incurring costs related to:
(i) filing of Exchange Act reports, and
(ii) costs relating to consummating an acquisition.
We believe we will be able to meet these costs through amounts, as necessary, to be loaned to or invested in us by our stockholders, management or other investors.
We may consider a business which has recently commenced operations, is a developing company in need of additional funds for expansionexpand into new products or markets, is seeking to develop a new product or service, or is an established businessfor other corporate purposes. The Company may acquire assets and establish wholly-owned subsidiaries in various businesses or acquire existing businesses as subsidiaries.
One of the methods the Company will use to find potential merger or acquisition candidates will be to run classified ads in the Wall Street Journal and similar publications periodically seeking companies which may be experiencing financial or operating difficulties and is in need of additional capital. In the alternative, a business combination may involve the acquisition of, or mergerare looking to merge with a company which does not need substantial additional capital, but which desires to establishpublic shell. Other methods included personal contacts and contacts gained through social networking. There is no evidence showing that these methods of identifying a public trading market for its shares, while avoiding, among other things, the time delays, significant expense, and loss of voting control which may occur in a public offering.
Any target business that is selected may be a financially unstable company or an entity in its early stages of development or growth, including entities without established records of sales or earnings. In that event, wesuitable merger opportunity will be subject to numerous risks inherent in the business and operations of financially unstable and early stage or potential emerging growth companies. In addition, we may effect a business combination with an entity in an industry characterized by a high level of risk, and, although our management will endeavor to evaluate the risks inherent in a particular target business, there can be no assurance that we will properly ascertain or assess all significant risks.
Our management anticipates that it will likely be able to effect only one business combination, due primarily to our limited financing, and the dilution of interest for present and prospective stockholders, which is likely to occur as a result of our management’s plan to offer a controlling interest to a target business in order to achieve a tax-free reorganization. This lack of diversification should be considered a substantial risk in investing in us, because it will not permit us to offset potential losses from one venture against gains from another.successful.
We anticipate
The Company anticipates that the selection of a business combinationopportunity in which to participate will be complex and extremely risky. Because ofDue to general economic conditions, rapid technological advances being made in some industries and shortages of available capital, our management believesofficer and director, Mr. Anthony Iarocci, and our director, Mr. Michael J. Schnaus, believe that there are numerous firms seeking even the limited additional capital which we will have and/or the perceived benefits of becoming a publicly tradedregistered corporation. Such perceived benefits of becoming a publicly traded corporationmay include among other things, facilitating or improving the terms on which additional equity financing may be obtained,sought, providing liquidity for the principals of and investors in a business, creating a means for providing incentive stock options or similar benefits to key employees, providing liquidity (subject to restrictions of applicable statutes) for all shareholders and offering greater flexibility in structuring acquisitions, joint ventures and the like through the issuance of stock. Potentiallyother factors. Business opportunities may be available business combinations may occur in many different industries and at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities extremely difficult and complex.
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The analysis of new business opportunities will be undertaken by, or under the supervision of, the officer and our directors of the Company and they are not a professional business analysts. Our officer and directors, Mr. Iarocci and Mr. Schnaus, intend to concentrate on identifying preliminary prospective business opportunities which may be brought to their attention through present associations of the Company's office and directors. In analyzing prospective business opportunities, our sole officer and directors will consider such matters as the available technical, financial and managerial resources; working capital and other financial requirements; history of operations, if any; prospects for the future; nature of present and expected competition; the quality and experience of management services which may be available and the depth of that management; the potential for further research, development, or exploration; specific risk factors not now foreseeable but which then may be anticipated to impact the proposed activities of the Company; the potential for growth or expansion; the potential for profit; the perceived public recognition or acceptance of products, services, or trades; name identification; and other relevant factors. Our officer and directors, Mr. Iarocci and Mr. Schnaus, will meet personally with management and key personnel of the business opportunity as part of his investigation. To the extent possible, the Company intends to utilize written reports and personal investigation to evaluate the above factors. The Company will not acquire or merger with any company for which audited financial statements cannot be obtained.
Our officer and directors, Mr. Iarocci and Mr. Schnaus, while not experienced in matters relating to the new business of the Company, will rely upon their own efforts in accomplishing the business purposes of the Company. It is not anticipated that any outside consultants or advisors, other than the Company's legal counsel and accountants, will be utilized by the Company to effectuate its business purposes described herein. However, if the Company does retain such an outside consultant or advisor, any cash fee earned by such party will need to be paid by the prospective merger/acquisition candidate, as the Company has no cash assets with which to pay such obligation.
The Company will not restrict its search for any specific kind of firms, but may acquire a venture which is in its preliminary or development stage, which is already in operation, or in essentially any stage of its corporate life. It is impossible to predict at this time the status of any business in which the Company may become engaged, in that such business may need to seek additional capital, may desire to have its shares publicly traded, or may seek other perceived advantages which the Company may offer.
Government Regulation
We are subject to government regulations that regulate businesses generally, such as compliance with regulatory requirements of federal, state, and local agencies and authorities, including regulations concerning workplace safety and labor relations. In addition, our operations are affected by federal and state laws relating to marketing practices in the music industry. Environmental laws and regulations do not currently intendmaterially impact our operations.
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Research and Development
We have not spent any funds on research and development activities in connection with our business.
Personnel
As of December 31, 2019, we employed one person on a part-time basis. Our employee is not subject to retain any entitya collective bargaining agreement. We believe that our relationship with our employee is good.
Not applicable to act as a “finder” to identify and analyze the merits of potential target businesses.smaller reporting companies.
Off-Balance Sheet Arrangements
Item 1B. Unresolved Staff Comments.
None.
Our executive offices are located at 8217 East Spanish Boot Road, Carefree, Arizona 85377. The Company does not have any off-balance sheet arrangements that haveown or are reasonably likely to have a current or future effect on the Company’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources thatrent property. The office space is material to investors.
Contractual Obligations
As a “smaller reporting company” as definedprovided by Item 10 of Regulation S-K, the Company is not required to provide this information.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk.
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide this information.
Item 8. Financial Statements and Supplementary Data.
Please see the financial statements beginning on page F-1 located elsewhere in this annual report on Form 10-K and incorporated herein by reference.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
There are not and have not been any disagreements between the Company and its accountants on any matter of accounting principles, practices or financial statement disclosure.
Item 9A.Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
The Company’s management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) that is designed to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
In accordance with Exchange Act Rules 13a-15 and 15d-15, an evaluation was completed under the supervision and with the participation of the Company’s management, including the Company’s President, Principal Financial Officer and Secretary, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of the end of the period covered by this Annual Report. Based on that evaluation, the Company’s sole officer concluded that the Company’s disclosure controls and procedures were effective in providing reasonable assurance that information required to be disclosed in the Company’s reports filed or submitted under the Exchange Act was recorded, processed, summarized, and reported within the time periods specified in the Commission’s rules and forms.
Evaluation of Internal Controls over Financial Reporting
This annual report does not include a report of management’s assessment regarding internal control over financial reporting or an attestation report of the company’s registered public accounting firm due to a transition period established by rules of the Securities and Exchange Commission for newly public companies.
Changes in Internal Controls over Financial Reporting
There have been no significant changes to the Company’s internal controls over financial reporting that occurred during our last fiscal quarter of the year ended December 31, 2013, that materially affected, or were reasonably likely to materially affect, our internal controls over financial reporting.
Item 9B. Other Information.
Not applicable.
PART III
Item 10. Directors, Executive Officers and Corporate Governance
(a) Identification of Directors and Officers.
A. Identification of Directors and Officers. The current officers and directors will serve for one year or until their respective successors are elected and qualified. They are:
Biographical Information for Richard Chiang
Richard Chiang has been the Chief Executive Officer, Secretary, Treasurer and Director of the Company since its inception on May 20, 2013. Mr. Chiang is employed by Tech Associates, Inc., a financial advisory firm engaged in assisting emerging growth companies with capital markets consulting. From February 2010 to May 2012, he was employed by Redwood Capital, Inc., a financial advisory firm engaged in cross borders transactions in The People’s Republic of China, as a Managing Director of private equity. From January 2009-January 2010, Mr. Chiang was employed as an Associate Partner of BayPeak LLC, a financial advisor engaged in cross borders transactions in The People’s Republic of China. From 2005 to 2009, he was an independent consultant specializing in corporate and securities consulting services for small and medium sized companies. Prior to that he was a licensed National Association of Securities Dealers (NASD) Series 7 Registered Representative and held senior executive positions at Bear, Stearns & Co., Inc, Cruttenden Roth, Inc and for Wedbush Morgan Securities, Inc. Mr. Chiang has experience in several areas within the financial services industry such as securities trading, mergers and acquisitions, private wealth management, private equity and corporate finance. Mr. Chiang’s exposure in working with small and medium public companies total (20) twenty years experience. His background in the securities industry and knowledge of financial structures provide us with sufficient management experience to serve as our officer and director.director at no charge. We believe that this space is presently adequate for our needs.
B. Significant Employees.
As of the date hereof, the Company has no significant employees.
C. Family Relationships.
There are no family relationships among directors, executive officers, or persons nominated or chosen by the issuer to become directors or executive officers.
D. Involvement in CertainItem 3. Legal Proceedings.
There have been no events under any bankruptcy act, no criminal proceedings and no judgments, injunctions, orders or decrees material to the evaluation of the ability and integrity of any director, executive officer, promoter or control person of Registrant during the past five years.
Code of Ethics
We have not adopted a Code of Business Conduct and Ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions in that our sole officer and director serve in these capacities.
Nominating Committee
We have not adopted any procedures by which security holders may recommend nominees to our Board of Directors.
Audit Committee
The Board of Directors acts as the audit committee. The Company does not have a qualified financial expert at this time because it has not been able to hire a qualified candidate. Further, the Company believes that it has inadequate financial resources at this time to hire such an expert. The Company intends to continue to search for a qualified individual for hire.
Item 11. Executive Compensation.
Our officer and director does not receive any compensation for services rendered to the Company since inception, has not received such compensation in the past, and is not accruing any compensation pursuant to any agreement with the Company. No remuneration of any nature has been paid for or on account of services rendered by a director in such capacity. Our officers and directors intend to devote no more than (25) twenty five hours per week to our affairs.
Our officers and directors will not receive any finder’s fee, either directly or indirectly, as a result of any efforts to implement our business plan outlined herein.
It is possible that, after we successfully consummates a business combination with an unaffiliated entity, that entity may desire to employ or retain one or a number of members of our management for the purposes of providing services to the surviving entity. However, we have adopted a policy whereby the offer of any post-transaction employment to members of management will not be a consideration in our decision whether to undertake any proposed transaction.
No retirement, pension, profit sharing, stock option or insurance programs or other similar programs have been adopted for the benefit of its employees.
There are no understandings or agreements regarding compensation our management will receive after a business combination that is required to be included in this table, or otherwise.
Director Compensation
We do not currently pay any cash fees to our directors, nor do we pay directors’ expenses in attending board meetings.
Employment Agreements
The Company is not a party to any employment agreements.legal proceedings, nor are we aware of any threatened litigation whatsoever.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.4. Mine Safety Disclosures
(a) Security ownership of certain beneficial owners.
The following table sets forth, as of December 31, 2013, the number of shares of Common Stock owned of record and beneficially by executive officers, directors and persons who hold 5% or more of the outstanding Common Stock of the Company. Also included are the shares held by all executive officers and directors as a group.Not applicable to smaller reporting companies.
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| Name and Address | Amount and Nature of Beneficial Ownership | Percentage of Class(1) | ||
| Richard Chiang | 10,000,000 | 100% | ||
| All Officers and Directors as a group (1 person) | 10,000,000 | 100% |
(1) The above percentages are based on 10,000,000 shares of common stock outstanding as of December 31, 2013.
Item 13. Certain Relationships and Related Transactions.
Except as otherwise indicated herein, there have been no related party transactions, or any other transactions or relationships required to be disclosed pursuant to Item 404 of Regulation S-K.
Item 14. Principal Accounting Fees and Services.
Kenne Ruan, CPA, P.C. is the Company’s independent registered public accounting firm. Set below are aggregate fees billed by Kenne Ruan for professional services rendered for the year ended December 31, 2013.
Audit Fees
The fees for the audit and review services billed and to be billed by Kenne Ruan CPA, P.C. for the period from September 30, 2013 to December 31, 2013 amounted to $2,500.
Audit Related Fees
None
Tax Fees
There were no fees billed by Kenne Ruan, CPA, P.C. for professional services for tax compliance, tax advice, and tax planning for the fiscal year ended December 31, 2013.
All Other Fees
There were no fees billed by Kenne Ruan, CPA, P.C. for other products and services for the fiscal year ended December 31, 2013.
Audit Committee’s Pre-Approval Process
The Board of Directors acts as the audit committee of the Company, and accordingly, all services are approved by all the members of the Board of Directors.
Item 15. Exhibits, Financial Statement Schedules.
| Incorporated by reference | ||||||
| Exhibit | Exhibit Description | Filed herewith | Form | Period ending | Exhibit | Filing date |
| 3.1 | Certificate of Incorporation | (i) | 10 | 3.1 | 06/04/13 | |
| 3.2 | By-Laws | (ii) | 10 | 3.2 | 06/04/13 | |
| 4.1 | Specimen Stock Certificate | (iii) | 10 | 4.1 | 06/04/13 | |
| 31 | Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | X | ||||
| 32 | Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | X | ||||
| 101.INS | XBRL Instance Document | X | ||||
| 101.SCH | XBRL Taxonomy Extension Schema Document | X | ||||
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | X | ||||
| 101.LAB | XBRL Taxonomy Extension Label Linkbase Document | X | ||||
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | X | ||||
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase Definition | X | ||||
(b) The following documents are filed as part of the report:
1. Financial Statements: Balance Sheet, Statement of Operations, Statement of Stockholder’s Equity, Statement of Cash Flows, and Notes to Financial Statements.
We are an inactive entity as defined by Section 3-11 of Regulation S-X. Accordingly, the financial statements required for purposes of reports pursuant to the Securities Exchange Act of 1934 are unaudited.
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.II
APEX 11 INC.
Dated: February 21, 2014
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In accordance with Section 13 or 15(d)Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Equity Securities.
APEX 11 INC.(A Development Stage Company)Market Information
FINANCIAL STATEMENTS
AS OF DeCEMBER 31, 2013AND FOR THE PERIOD FROM MAY 20, 2013(DATE OF INCEPTION) TODECEMBER 31, 2013
Contents
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None.
Holders of Record
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
As of June 30, 2019 and 2018, respectively, there was one shareholder of record of the Company’s common stock.
To the Board of Directors and StockholdersAPEX 11, Inc.(A Development Stage Company)
Dividend Policy
We have audited the accompanying balance sheet of APEX 11, Inc. as of December 31, 2013 and the related statements of operations, changes in shareholders’ equity andnever declared or paid any cash flows for the period from May 20, 2013 (inception) to December 31, 2013. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements baseddividends on our audit.common stock. We do not anticipate paying any cash dividends on our common stock in the foreseeable future. We currently intend to retain future earnings, if any, to finance our operations, and to expand our business. Subject to the rights of holders of preferred stock, any future determination to pay cash dividends will be at the discretion of our board of directors and will be dependent upon our financial condition, operating results, capital requirements, limitations under Florida law and other factors that our board of directors considers appropriate.
We conducted our audit in accordance with the standardsRecent Sales of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.Registered Securities
In our opinion, the financial statements referredNone.
Item 6. Selected Financial Data.
Not applicable to above present fairly, in all material respects, the financial position of APEX 11, Inc. as of December 31, 2013 and the results of its operation and its cash flows for the period from May 20, 2013 (inception) to December 31, 2013 in conformity with U.S. generally accepted accounting principles.smaller reporting companies.
Item 7. Management’s Discussion And Analysis Of Financial Condition And Results Of Operations
The following discussion and analysis should be read in conjunction with our financial statements, have been prepared assumingincluding the notes thereto, appearing in this Form 10-K and are hereby referenced. The following discussion contains forward-looking statements that the Company will continue as a going concern. Asreflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the noteforward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this report. You should not place undue certainty on these forward-looking statements, which apply only as of the financialdate of this report. We believe it is important to communicate our expectations. However, our management disclaims any obligation to update any forward-looking statements the Company’s lack of liquidity and losses from operations raise substantial doubt about its ability to continuewhether as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/Kenne Ruan, CPA, P.C.Kenne Ruan, CPA, P.C.Woodbridge, ConnecticutFebruary 21, 2014new information, future events or otherwise.
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APEX 11 INC.(A Development Stage Company)Balance Sheet
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See Notes to Financial Statements
| Contents |
APEX 11 INC.(A Development Stage Company)StatementsThese forward-looking statements are based on our management’s current expectations and beliefs and involve numerous risks and uncertainties that could cause actual results to differ materially from expectations. You should not rely upon these forward-looking statements as predictions of Operations
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See Notesfuture events because we cannot assure you that the events or circumstances reflected in these statements will be achieved or will occur. You can identify a forward-looking statement by the use of the forward-terminology, including words such as “may”, “will”, “believes”, “anticipates”, “estimates”, “expects”, “continues”, “should”, “seeks”, “intends”, “plans”, and/or words of similar import, or the negative of these words and phrases or other variations of these words and phrases or comparable terminology. These forward-looking statements relate to, Financial Statementsamong other things: our sales, results of operations and anticipated cash flows; capital expenditures; depreciation and amortization expenses; sales, general and administrative expenses; our ability to maintain and develop relationship with our existing and potential future customers, and, our ability to maintain a level of investment that is required to remain competitive. Many factors could cause our actual results to differ materially from those projected in these forward-looking statements, including, but not limited to: variability of our revenues and financial performance; risks associated with technological changes; the acceptance of our products in the marketplace by existing and potential customers; disruption of operations or increases in expenses due to our involvement with litigation or caused by civil or political unrest or other catastrophic events; general economic conditions, government mandates; and, the continued employment of our key personnel and other risks associated with competition.
Overview
APEXApex 11, Inc.(A Development Stage (the Company)Statement of Changes in Stockholders’ Equity (Deficit)From May 20, 2013(inception) through December 31, 2013
| Common Stock | Common Stock Amount | Additional Paid-in Capital | Deficit Accumulated During Development Stage | Total | ||||||||||||||||
| May 20, 2013 (inception) Shares issued for services at $.0001 per share | 10,000,000 | 1,000 | — | — | 1,000 | |||||||||||||||
| Contributed Capital | 3,144 | 3,144 | ||||||||||||||||||
| Net loss, December 31, 2013 | — | — | — | (4,144 | ) | (4,144 | ) | |||||||||||||
| Balance, December 31, 2013 | 10,000,000 | 1,000 | 3,144 | (4,144 | ) | — | ||||||||||||||
See Notes to Financial Statements
APEX 11 INC.(A Development Stage Company)Statement of Cash flows
| May 20, 2013 (inception) through December 31, 2013 | ||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||
| Net income (loss) | $ | (4,144 | ) | |
| Changes in working capital | 1,000 | |||
| Net cash provided by (used in) operating activities | (3,144 | ) | ||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||
| Net cash provided by (used in) investing activities | — | |||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||
| Contributed Capital | 3,144 | |||
| Net cash provided by (used in) financing activities | 3,144 | |||
| Net increase (decrease) in cash | — | |||
| Cash at beginning of year | — | |||
| Cash at end of year | — | |||
| NONCASH INVESTING AND FINANCING ACTIVITIES: | ||||
| Common stock issued to founder for services rendered | 1,000 | |||
| SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | ||||
| Interest paid | — | |||
| Income taxes paid | — | |||
See Notes to Financial Statements
APEX 11 INC.(A Development Stage Company)Notes to Financial StatementsFor the Period from May 20, 2013 (inception) toDecember 31, 2013
NOTE 1. ORGANIZATION AND DESCRIPTION OF BUSINESS
APEX 11 INC. (the “Company”) was incorporated under the laws of the State of Delaware on May 20, 2013 and has been inactive since inception. The Company intends to serve as a vehicle to effectaffect an asset acquisition, merger, exchange of capital stock or other business combination with a domestic or foreign business.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis
Plan of Presentation - Development Stage CompanyOperation
Apex 11 Inc. intends to seek to acquire assets or shares of an entity actively engaged in business which generates revenues, in exchange for its securities. Apex 11 plans to enter into negotiations regarding such an acquisition. The Company haswill obtain audited financial statements of a target entity. The Board of Directors does intend to obtain certain assurances of value of the target entity's assets prior to consummating such a transaction. These assurances consist mainly of financial statements. The Company will also examine business, occupational and similar licenses and permits, physical facilities, trademarks, copyrights, and corporate records including articles of incorporation, by-laws and minutes if applicable. In the event that no such assurances are provided the Company will not earnedmove forward with a combination with this target. Closing documents relative thereto will include representations that the value of the assets conveyed to or otherwise so transferred will not materially differ from the representations included in such closing documents.
Results of Operations for the Year Ended December 31, 2019 Compared to the Year Ended December 31, 2018
Revenues. The Company did not have any revenue for the years ended December 31, 2019 or 2018.
Selling, General and Administrative Expenses. Selling, general and administrative expenses for the year ended December 31, 2019 were $27,997 as compared to $22,635 for year ended December 31, 2018. General and administrative expenses increased due to the Company incurring expenses related to being a public reporting company, including service fees and for preparing our SEC reports.
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Liquidity and Capital Resources
We measure our liquidity in a number of ways, including the following:
| As of | As of | |||||||
| December 31, 2019 | December 31, 2018 | |||||||
| Cash | $ | 0 | $ | 0 | ||||
| Accumulated (Deficit) | (67,903 | ) | (41,906 | ) | ||||
| Current Liabilities | $ | 0 | $ | 76 | ||||
Impact of Inflation
We believe that the rate of inflation has had negligible effect on our operations. We believe we can absorb most, if not all, increased non-controlled operating costs by increasing sales prices, whenever deemed necessary and by operating our Company in the most efficient manner possible.
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Net Cash Used in Operating Activities
We experienced negative cash flow from operations. Accordingly,operating activities for the Company’syear ended December 31, 2019 in the amount of $0 due to cash used to fund a net loss of $27,997, adjusted for the increase in accounts payable for legal and accounting services to being a public reporting company. We experienced negative cash flow from operating activities for the period ended December 31, 2018 in the amount of $0 due to cash used to fund a net loss of $22,635, adjusted for the increase in accounts payable for legal and accounting services to being a public reporting company.
Net Cash Used in Investing Activities
We experienced no cash flow from investing activities for years ended December 31, 2019 and 2018.
Net Cash Provided by Financing Activities
We experienced positive cash flow from financing activities for the year ended December 31, 2019 due to related party loans, and related to cash deposited in the trust account.
Availability of Additional Funds
Based on our working capital as of December 31, 2019, we will need additional equity and/or debt financing to continue our operations during the next 12 months. See “Description of Business”.
Critical Accounting Policies and Estimates
Our financial statements and accompanying notes have been accounted for as thoseprepared in accordance with United States generally accepted accounting principles applied on a consistent basis. The preparation of a “Development Stage Company” as set forth in Financial Accounting Standards Board ASC 915. Among the disclosures required by ASC 915 are that the Company’s financial statements be identified as thosein conformity with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of a development stage company,assets and thatliabilities, the statementsdisclosure of operations, stockholders’ equitycontingent assets and cash flows disclose activity sinceliabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from these estimates. Our significant estimates and assumptions include amortization, the fair value of our stock, and the valuation allowance relating to the Company’s inception.deferred tax assets.
Accounting Method
We qualify as an “emerging growth company”, as defined in the Jumpstart Our Business Startups Act, which became law in April 2012. Under the JOBS Act, “emerging growth companies”, can delay adopting new or revised accounting standards until such time as those standards apply to private companies. We have elected not to avail ourselves of this exemption from new or revised accounting standards and, therefore, will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.
The Company’saccompanying financial statements arehave been prepared usingin conformity with generally accepted accounting principles (U.S. GAAP), which contemplate continuation of the accrual methodCompany as a going concern. However, the Company has not commenced operations and has accumulated a capital deficit as of accounting.December 31, 2019. The Company currently has electedlimited liquidity and has not completed its efforts to establish a fiscalstabilized source of revenues sufficient to cover operating costs over an extended period of time. Management has evaluated these factors and has determined that they raise substantial doubt about the Company’s ability to continue as a going concern.
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Recently Issued Accounting Pronouncements
Reference is made to the “Organization and Significant Accounting Pronouncements” in Note 1 to our financial statements included elsewhere in this report for information related to new accounting pronouncements.
Material Commitments
There were no material commitments for the year endingended December 31, 2019.
Purchase of Furniture and Equipment
There were no purchases of computers and equipment for the year ended December 31, 2019.
Off-Balance Sheet Arrangements
As of December 31, 2019, we do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on December 31.our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
Critical Accounting Policies
Our financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis. The preparation of financial statements in conformity with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.
We regularly evaluate the accounting policies and estimates that we use to prepare our financial statements. In general, management's estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management.
Cash and Cash Equivalents
We consider all highly liquid debt instruments with original maturities of three months or less to be cash equivalents. We have no cash equivalents.
Revenue Recognition — Revenue is recognized when a customer obtains control of promised goods or services and is recognized at an amount that reflects the consideration expected to be received in exchange for such goods or services.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
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Share Based Payments
We recognize compensation cost for stock-based awards to employees in accordance with ASC Topic 718, over the requisite service period for each separately vesting tranche, as if multiple awards were granted. Compensation cost is based on grant-date fair value using quoted market prices for our common stock. We recognize compensation cost for stock-based awards to nonemployees in accordance with ASC Topic 505.
Earnings (Loss) Per Share
The Company computes earnings per share in accordance with ASC 260, “Earnings Per Share”. Under the provisions of ASC 260, basic earnings per share is computed by dividing the net income (loss) for the period by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing the net income (loss) for the period by the weighted average number of common and potentially dilutive common shares outstanding during the period. There were no potentially dilutive common shares outstanding during the period.
Income Taxes
The Company accounts for income taxes as outlined in ASC 740, “Income Taxes”. Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled.
Fair Value of Financial Instruments
ASC 820, “Fair Value Measurements” (ASC 820) and ASC 825, ��Financial Instruments” (ASC 825), requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. It establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument's categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. It prioritizes the inputs into three levels that may be used to measure fair value:
Level 1 - Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.
Level 2 - Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.
Level 3 - Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.
The carrying values of cash, accounts payable, and accrued liabilities approximate fair value. Pursuant to ASC 820 and 825, the fair value of cash is determined based on "Level 1" inputs, which consist of quoted prices in active markets for identical assets. The recorded values of all other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations.
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Recent Accounting Pronouncements
Reference is made to the “Organization and Significant Accounting Pronouncements” in Note 1 to our financial statements included elsewhere in this report for information related to new accounting pronouncements.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk.
We are not subject to risks related to foreign currency exchange rate fluctuations. Our functional currency is the United States dollar. We do not transact our business in other currencies. As a result, we are not subject to exposure from movements in foreign currency exchange rates. We do not use derivative financial instruments for speculative trading purposes.
Item 8. Financial Statements and Supplementary Data.
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Directors and Stockholders APEX 11, Inc.
Carefree, Arizona
Opinion on the Financial Statements. We have audited the accompanying balance sheets of the APEX 11, Inc. (the Company) as of December 31, 2019 and 2018, and the related statements of operations, stockholders' equity and cash flows, for each of the two years in the period ended December 31, 2019, and the notes to the financial statements (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2019 and 2018, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2019, in conformity with accounting principles generally accepted in the United States (U.S.).
Ability to Continue as a Going Concern. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has incurred losses since inception and is currently dependent on the stockholders to fund its contemplated operational and marketing activities that raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the auditing standards generally accepted in the United States of America and in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/ Piercy Bowler Taylor & Kern Certified Public Accountants
We have served as the Company's auditor since 2017 Las Vegas, Nevada
June 16, 2020
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APEX 11, INC.
BALANCE SHEETS December 31, 2019 and 2018 |
| 2019 | 2018 | |||||||
| ASSETS | ||||||||
| Receivable from controlling stockholder | $ | — | $ | 1,042 | ||||
| LIABILITIES AND STOCKHOLDERS' DEFICIT | ||||||||
| CURRENT LIABILITIES | ||||||||
| Accrued expenses | $ | — | $ | 76 | ||||
| Stockholders' EQUITY | ||||||||
| Preferred stock; $.0001 par value; 5,000,000 shares authorized; | ||||||||
| none issued and outstanding | — | — | ||||||
| Common stock; $.0001 par value; 100,000,000 shares authorized; | ||||||||
| 21,534,014 and 15,647,216 issued and outstanding, respectively | 2,153 | 1,565 | ||||||
| Additional paid-in capital | 67,750 | 41,307 | ||||||
| Accumulated deficit | (69,903 | ) | (41,906 | ) | ||||
| Total stockholders' equity | — | 966 | ||||||
| Total liabilities and stockholders' equity | $ | — | $ | 1,042 | ||||
The accompanying notes are an integral part of these financial statements
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APEX 11, INC.
STATEMENTS OF OPERATIONS FOR THE YEARS ENDED December 31, 2019 and 2018 |
| 2019 | 2018 | |||||||
| OPERATING EXPENSES | ||||||||
| General and administrative | $ | 27,997 | $ | 22,635 | ||||
| NET LOSS | $ | (27,997 | ) | $ | (22,635 | ) | ||
| Basic and diluted loss per common share | $ | (0.00 | ) | $ | (0.00 | ) | ||
| Basic and diluted weighted-average common shares outstanding | 15,663,344 | 10,015,472 | ||||||
The accompanying notes are an integral part of these financial statements
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APEX 11, INC.
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY) FOR THE YEARs ENDED December 31, 2019 and 2018 |
| Additional | ||||||||||||||||||||
| Common Stock | Paid-in | Accumulated | ||||||||||||||||||
| Shares | Amount | Capital | Deficit | Total | ||||||||||||||||
| Balances, JANUARY 1, 2018 | 10,000,000 | $ | 1,000 | $ | 15,941 | $ | (19,271 | ) | $ | (2,330 | ) | |||||||||
| Issuance of common stock | 5,647,216 | 565 | 25,366 | 25,931 | ||||||||||||||||
| Net loss | -- | -- | -- | (22,635 | ) | (22,635 | ) | |||||||||||||
| Balances, December 31, 2018 | 15,647,216 | 1,565 | 41,307 | (41,906 | ) | 966 | ||||||||||||||
| Issuance of common stock | 5,886,798 | 588 | 26,443 | - | 27,031 | |||||||||||||||
| Net loss | -- | -- | -- | (27,997 | ) | (27,997 | ) | |||||||||||||
| Balances, December 31, 2019 | 21,534,014 | $ | 2,153 | $ | 67,750 | $ | (69,903 | ) | $ | — | ||||||||||
The accompanying notes are an integral part of these financial statements
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APEX 11, INC.
STATEMENTS OF CASH FLOWS FOR THE YEARs ENDED December 31, 2019 and 2018 |
| 2019 | 2018 | |||||||
| OPERATING ACTIVITIES | ||||||||
| Net loss | $ | (27,997 | ) | $ | (22,635 | ) | ||
| Adjustments to reconcile net loss to net cash | ||||||||
| provided by operating activities: | ||||||||
| Cash advances on controlling stockholder payable | — | 24,494 | ||||||
| Repayment of controlling stockholder payable | 1,042 | — | ||||||
| Issuance of common stock in settlement of controlling | ||||||||
| stockholder payable | 27,031 | — | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accrued expenses | (76 | ) | (1,859 | ) | ||||
| Cash flows from operating activities | — | — | ||||||
| Cash flows from investing activities | — | — | ||||||
| Cash flows from financing activities | — | — | ||||||
| NET CHANGE IN CASH AND CASH EQUIVALENTS | — | — | ||||||
| CASH AND CASH EQUIVALENTS, Beginning of year | — | — | ||||||
| CASH AND CASH EQUIVALENTS, End of year | $ | — | $ | — | ||||
| NON CASH FINANCING ACTIVITY | ||||||||
| Issuance of common stock in settlement of | ||||||||
| stockholder payable | $ | 27,031 | $ | 25,931 | ||||
| Receivable recorded as a result of sale | ||||||||
| of common stock to controlling stockholder | $ | — | $ | 1,042 | ||||
The accompanying notes are an integral part of these financial statements
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APEX 11, INC.
NOTES TO FINANCIAL STATEMENTS YEARs ENDED December 31, 2019 and 2018 |
| 1. | ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
Organization — Apex 11, Inc. (the Company) was incorporated under the laws of the State of Delaware on May 20, 2013 and has been inactive since inception. The Company intends to serve as a vehicle to affect an asset acquisition, merger, exchange of capital stock or other business combination with a domestic or foreign business.
Cash and Cash Equivalents — For purposes of the statements of cash flows, the Company defines cash and cash equivalents as all cash on hand, demand deposits and money market investment accounts.
Revenue Recognition — If the Company commences operations, revenue will be recognized when a customer obtains control of promised goods or services and is recognized at an amount that reflects the consideration expected to be received in exchange for such goods or services.
Earnings (Loss) Per Share — Basic earnings (loss) per common share is computed by dividing net income (loss) available to common shareholders by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per common share is computed by dividing income available to common shareholders by the weighted-average number of shares of common stock outstanding during the period increased to include the number of additional shares of common stock that would have been outstanding if potentially dilutive securities had been issued. There were no potentially dilutive securities outstanding during the periods presented.
Income Taxes — The Company accounts for income taxes using the asset and liability method and recognizes the tax consequences of temporary differences by applying enacted statutory tax rates applicable to future years to differences between financial statement carrying amounts and the tax bases of existing assets and liabilities.
The Company accounts for any uncertainty in income taxes by recognizing 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 application of income tax law is inherently complex. Laws and regulations in this area are voluminous and are often ambiguous. As such, the Company is required to make subjective assumptions and judgments regarding income tax exposures. Interpretations of and guidance surrounding income tax law and regulations change over time and may result in changes to the Company's subjective assumptions and judgments which can materially affect amounts recognized in the financial statements. The Company believes that it does not have any uncertain tax positions that are material to the financial statements.
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Use of Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. In the opinion of management, all adjustments necessary in order to make the financial statements not misleading have been included. Actual results could differ from those estimates.
Cash Equivalents
The Company considers all highly liquid investments with maturity of three months or less when purchased to be cash equivalents.
Income Taxes
Income taxes are provided in accordance with Statement of Financial Accounting Standards ASC 740 Accounting for Income Taxes. A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss carry forwards. Deferred tax expense (benefit) results from the net change during the year of deferred tax assets and liabilities. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion of all of the deferred tax assets will be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. There were no current or deferred Income tax expenses or benefits due to the Company not having any material operations for period ended December 31, 2013.
Basic Earnings (Loss) per Share
In February 1997, the FASB issued ASC 260, “Earnings per Share”, which specifies the computation, presentation and disclosure requirements for earnings (loss) per share for entities with publicly held common stock. ASC 260 supersedes the provisions of APB No. 15, and requires the presentation of basic earnings (loss) per share and diluted earnings (loss) per share. The Company has adopted the provisions of ASC 260 effective (inception).
Basic net loss per share amounts is computed by dividing the net income by the weighted average number of common shares outstanding. Diluted earnings per share are the same as basic earnings per share due to the lack of dilutive items in the Company.
Impact of New Accounting Standards
The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company’s results of operations, financial position, or cash flow.
NOTE 3. GOING CONCERNGoing Concern
— The Company’saccompanying financial statements arehave been prepared using accounting principles generally accepted in the United States of America applicable toon a going concern thatbasis, which contemplates the realization of assets and liquidationthe satisfaction of the liabilities in the normal course of business. The Company has incurred losses since inception and is currently dependent on the stockholders to fund its contemplated operational and marketing activities. There can be no assurance that the Company will have the ability to raise additional capital through the future issuance of common stock. Obtaining additional financing, the successful development of the Company's contemplated plan of operations, and its transition, ultimately, to the attainment of profitable operations is necessary for the Company to continue operations. Management believes the stockholders will continue to fund operations as long as necessary to keep the Company available for its intended purpose which is described above. However, the uncertainty regarding management’s ability to successfully resolve these factors raises substantial doubt about the Company's ability to continue as a going concern. The financial statements of the Company do not establishedinclude any sourceadjustments that may result from the outcome of revenue to cover its operating costs.these aforementioned uncertainties.
Subsequent Events — The Company will engagehas evaluated subsequent events and has identified only the event in very limited activities without incurring any liabilities that must be satisfiednote 5 requiring disclosure.
| 2. | CONTROLLING STOCKHOLDER RECEIVABLE AND PAYABLE |
As of December 31, 2018, the Company has a receivable of $1,042 from its controlling stockholder and this receivable was repaid subsequent to December 31, 2018. The receivable is related to advances to fund operations, was fully paid in cash until a source of funding is secured.May 2019, and was non-interest bearing.
| 3. | STOCKHOLDERS' EQUITY |
Preferred Stock – The Company will offer noncash considerationis authorized to issue 5,000,000 shares of $.0001 par value preferred stock. As of December 31, 2019 and seek equity lines2018, no shares of preferred stock have been issued.
Common Stock – The Company is authorized to issue 100,000,000 shares of $.0001 par value common stock. As of December 31, 2019 and 2018, 21,534,014 and 15,647,216 shares were issued and outstanding, respectively.
During the year ended December 31, 2019, the Company issued 5,886,798 shares of common stock to its controlling stockholder in exchange for settlement of $27,031 in accounts payable. During the year ended December 31, 2018, the Company issued 5,647,216 shares of common stock to its controlling stockholder in exchange for settlement of $25,931 in accounts payable.
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| 4. | INCOME TAXES |
Significant components of the Company's deferred income tax assets and liabilities are as follows at December 31:
| 2019 | 2018 | |||||||
| Deferred income tax asset – net operating loss carryforward | $ | 18,105 | $ | 10,854 | ||||
| Valuation allowance | (18,105 | ) | (10,854 | ) | ||||
| Net deferred income tax asset | $ | — | $ | — | ||||
At December 31, 2019, the Company had approximately $70,000 of net operating loss (NOL) carryforwards available to offset future taxable income, which begin to expire in 2033. However, a valuation allowance has been recorded reducing the NOL net deferred tax asset to zero because of uncertainty as to the ultimate utilization of the net operating losses to which it relates. The valuation allowance increased by $12,242 and $5,862 in 2019 and 2018, respectively.
The income tax benefit differed from the amount computed using the statutory federal rate of 21% due primarily to the change in the valuation allowance during 2019 and 2018.
| 5. | SUBSEQUENT EVENTS |
On January 30, 2020, the World Health Organization (WHO) announced a global health emergency because of a new strain of coronavirus originating in Wuhan, China (the COVID-19 outbreak) and the risks to the international community as the virus spreads globally beyond its point of origin. In March 2020, the WHO classified the COVID-19 outbreak as a meanspandemic, based on the rapid increase in exposure globally.
The full impact of financingthe COVID-19 outbreak continues to evolve as of the date of this report. As such, it is uncertain as to the full magnitude that the pandemic will have on the Company’s financial condition, liquidity, and future results of operations. Management is actively monitoring the global situation on its financial condition, and operations. IfCurrently, the Company is unablenot expecting any negative impact from the pandemic because the market for public shell companies appears to obtain revenue producing contracts or financing or if the revenue or financing it does obtain is insufficient to cover any operating losses it may incur, it may substantially curtail or terminate its operations or seek other business opportunities through strategic alliances, acquisitions or other arrangements that may dilute the interests of existing stockholders.remain strong.
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Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure.
None.
NOTE 4. RELATED PARTY TRANSACTIONSItem 9A. Controls and Procedures.
AnEVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
We maintain “disclosure controls and procedures,” as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”), that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. We conducted an evaluation, under the supervision and with the participation of our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report pursuant to Rule 13a-15 of the Exchange Act. Based on this evaluation, our CEO and CFO concluded that our disclosure controls were not effective as of the end of the period covered by this report.
MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934 as a process designed by, or under the supervision of, the Company’s principal executive and financial officer and directoreffected by the Company’s board of directors, management and other personnel, 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 and includes those policies and procedures that:
| · | Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; |
| · | Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and |
| · | Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements. |
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
The Company’s management assessed the effectiveness of the CompanyCompany’s internal control over financial reporting as of December 31, 2019. In making this assessment, the Company’s management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework. The COSO framework is based upon five integrated components of control: control environment, risk assessment, control activities, information and communications and ongoing monitoring.
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Based on an evaluation under the supervision and with the participation of the Company’s management, the Company’s principal executive officer and principal financial officer has performed services forconcluded that the Company’s internal control over financial reporting as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act were not effective as of December 31, 2019 (the “Evaluation Date”), to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms and (ii) accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. Each of the following is deemed a material weakness in our internal control over financial reporting:
| · | Limited or no segregation of duties and lack of multiple levels of supervision and review. |
| · | No independent directors. |
| · | Ineffective controls over financial reporting. |
| · | Lack of controls over authorization related party transactions. |
Management believes that the material weaknesses set forth in the four items above did not have an effect on our financial results. However, management believes that the lack of a functioning audit committee results in ineffective oversight in the establishment and monitoring of required internal controls and procedures, which could result in a material misstatement in our financial statements in future periods.
Management's Remediation Initiatives
In an effort to remediate the identified material weaknesses and other deficiencies and enhance our internal controls, we plan to initiate the following series of measures once we have the financial resources to do so:
| · | We will create a position to segregate duties consistent with control objectives and will increase our personnel resources and technical accounting expertise within the accounting function when funds are available to us. And, we plan to appoint one or more outside directors to an audit committee resulting in a fully functioning audit committee, which will undertake the oversight in the establishment and monitoring of required internal controls and procedures, such as reviewing and approving estimates and assumptions made by management when funds are available to us. |
| · | Management believes that the appointment of outside directors to a fully functioning audit committee, would remedy the lack of a functioning audit committee. |
Changes in Internal Control Over Financial Reporting
There were no changes in our internal controls over financial reporting that occurred during the period covered by this report, which were identified in connection with management’s evaluation required by paragraph (d) of Rules 13a-15 and 15d-15 under the valueExchange Act, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
This Annual Report does not include an attestation report of whichthe Company’s registered independent public accounting firm regarding internal control over financial reporting. Management’s report was $1,000,not subject to attestation by the Company’s independent registered public accounting firm pursuant to rules of the SEC that permit the Company to provide only management’s report in exchange for 10,000,000 shares of common stock. During the year anthis Annual Report.
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None.
CHANGES IN CONTROL OF REGISTRANT
None.
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Item 10. Directors, Executive Officers and Corporate Governance.
Our directors and executive officer, and directorhis age as of October 27, 2020, are as follows:
| Name | Age | Principal Positions With Us | ||
| Anthony J. Iarocci | 66 | President, Secretary, Treasurer and Director | ||
| Michael J. Schnaus | 66 | Director |
The following describes the Company paid $3,144 for generalbusiness experience of each of our directors and administrative expenses.executive officers, including other directorships held in public reporting companies, if any:
NOTE 5. SHAREHOLDER’S EQUITYSet forth below is the biographical information about the director and executive officers:
Upon formation,
Anthony J. Iarocci.
Mr. Iarocci is our President, Chief Executive Officer, and a member of our Board of Directors. Mr. Iarocci has been the President and a member of the Board of Directors issued 10,000,000of Du Lac since September 2012. Mr. Iarocci has worked in the securities industry as an investment advisor and an administrator for 38 years. He is the owner of Investment Group, Inc. Mr. Iarocci has been an independent contractor of Wedbush Securities and registered as a securities representative with FINRA since December 2011. For the prior 30 years, Mr. Iarocci was a Vice President, then Senior Vice President and principal with Wedbush Securities. From 1978 to 1981, Mr. Iarocci was a registered representative for Dean Witter Reynolds (now Morgan Stanley) and became a Vice President, Investments during his tenure there. He graduated with a bachelor’s degree in government from the University of Notre Dame. Mr. Iarocci completed his education with a MBA from the University of Chicago with a concentration in finance.
Michael J. Schnaus.
Mr. Schnaus is a member of our Board of Directors. Michael J. Schnaus is an independent consultant providing advisory services in mergers and acquisitions, joint ventures, and strategic alliances. Previously, Mr. Schnaus was the Senior Vice President of Corporate Development at Entrust Datacard Corporation until September 2016. Mr. Schnaus had been an executive with the company since 1997 and was responsible for mergers and acquisitions, joint ventures, and strategic alliances with outside companies on a global basis. Mr. Schnaus has over 33 years of experience in corporate development and finance, including with Alliant Techsystems (formerly Honeywell) from 1991 to 1997, and other publicly held companies in Los Angeles and Phoenix. Mr. Schnaus currently is a member of the Board of Directors of Du Lac. Previously, Mr. Schnaus served on the Board of Directors of other private companies in the United States, the United Kingdom, and Australia. Mr. Schnaus earned a bachelor’s degree in accounting from the University of Notre Dame and an MBA with concentrations in accounting and finance from UCLA.
Term of Office
All of our directors hold office until the next annual meeting of the shareholders or until their successors are elected and qualified. Our officers are appointed by our board of directors and hold office until their earlier death, retirement, resignation, or removal.
Family Relationships
There are no family relationships among any of the Company’s directors and officers.
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Board Composition and Committees
The Company’s Board of Directors is currently composed of two members, Anthony J. Iarocci and Michael J. Schnaus.
We do not have a standing nominating, compensation, or audit committee. Rather, our full board of directors performs the functions of these committees. Also, we do not have a “audit committee financial expert” on our board of directors as that term is defined by Item 407(d)(5)(ii) of Regulation S-K. We do not believe it is necessary for our board of directors to appoint such committees because the volume of matters that come before our board of directors for consideration permits the directors to give sufficient time and attention to such matters to be involved in all decision making.
Involvement in Certain Legal Proceedings
None of our directors, executive officers or control persons has been involved in any of the events prescribed by Item 401(f) of Regulation S-K during the past ten years, including:
| 1. | any petition under the Federal bankruptcy laws or any state insolvency law filed by or against, or a receiver, fiscal agent or similar officer was appointed by a court for the business or property of such person, or any partnership in which he or she was a general partner at or within two years before the time of such filing, or any corporation or business association of which he or she was an executive officer at or within two years before the time of such filing; |
| 2. | any conviction in a criminal proceeding or being named a subject of a pending criminal proceeding (excluding traffic violations and other minor offenses); |
| 3. | being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him or her from, or otherwise limiting, the following activities: |
| i. | acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity; |
| ii. | engaging in any type of business practice; or |
| iii. | engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of Federal or State securities laws or Federal commodities laws; |
| 4. | being subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any type of business regulated by the Commodity Futures Trading Commission, securities, investment, insurance or banking activities, or to be associated with persons engaged in any such activity; |
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| 5. | being found by a court of competent jurisdiction in a civil action or by the SEC to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated; |
| 6. | being found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended, or vacated; |
| 7. | being subject to, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended, or vacated, relating to an alleged violation of: |
| i. | any Federal or State securities or commodities law or regulation; or |
| ii. | any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or |
| iii. | any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or |
| 8. | being subject to, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member. |
Compliance with Section 16(a) of the Act
Section 16(a) of the Exchange Act requires our officers and directors, and persons who own more than ten percent (10%) of our shares of common stock, to file reports of ownership and changes in ownership with the SEC. Officers, directors and greater than ten percent (10%) stockholders are required by regulations promulgated by the SEC to furnish us with copies of all Section 16(a) forms that they file. With reference to transactions during the fiscal year ended June 30, 2016, to our knowledge, all Section 16(a) forms required to be filed with the SEC were filed.
Item 11. Executive Compensation.
Compensation Discussion and Analysis
Philosophy and objectives
Since our inception, all compensation decisions have been made by our Board of Directors. The primary objective of our compensation policies and programs with respect to executive compensation is to serve our shareholders by attracting, retaining and motivating talented and qualified individuals to manage and lead our business. We will focus on providing a competitive compensation package that provides significant short and long-term incentives for $1,000the achievement of measurable corporate and individual performance objectives.
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Elements of executive compensation
Base salary. We will seek to provide our senior management with a level of base salary in the form of cash compensation appropriate to their roles and responsibilities. Base salaries for our executives will be established based on the executive’s qualifications, experience, scope of responsibilities, future potential and past performance and cash available to pay executive compensation. Base salaries will be reviewed annually and adjusted from time to time to realign salaries with market levels after taking into account an individual's responsibilities, performance, and experience. We will consider four factors in determining the base salaries of our named executive officers. These four factors are, in order of significance, (1) creating an incentive to achieve corporate goals, (2) individual performance, (3) cash available to pay compensation and (4) the total compensation each executive officer previously received while employed with us, if any. We have not paid any executive compensation in the form of base salary to our management during the years ended December 31, 2019 or 2018.
Incentive cash bonuses. Our practice will be to seek to award incentive cash bonuses to our executive officers based upon their individual performance, as well as our overall business and strategic objectives. In determining the amount of cash bonuses paid to our named executive officers, we will consider the same four factors as in determining their base salaries. We expect that our Board of Directors will adopt formal processes for incentive cash bonuses during the next 24 months and will utilize incentive cash bonuses to reward executives for achieving corporate financial and operational goals and for achieving individual performance objectives. To date, we have not paid any incentive cash bonuses to our management.
Long-term equity compensation. We believe that successful long-term performance is achieved through an ownership culture that encourages long-term performance by our executive officers through the use of stock and stock-based awards. We intend to establish equity incentive plans to provide our employees, including our executive officers, with incentives to help align those employees’ interests with the interests of our shareholders.
We expect that our incentive plans will permit the grant of stock options, restricted shares and other stock awards to our executive officers, employees, consultants, and non-employee board members. When we hire executive officers in the future, we expect to grant them stock-based awards that will generally vest over a five-year period. We believe that stock-based awards provide an incentive for these officers to continue their employment with us, provide our executive officers with an opportunity to obtain an ownership interest in our company and encourage them to focus on our long-term profitable growth. We believe that the use of long-term equity compensation will promote our overall executive compensation objectives and expect that equity incentives will be an important source of compensation for our executives. In determining amounts awarded to our executive officers under our incentive plans, we will consider the same four factors (and use the same method of measurement) as in determining base salary. The third factor (cash available) has an indirect effect when determining long-term equity compensation. Specifically, to the extent that this factor causes us not to pay base salary or cash bonuses, it points toward providing long-term equity compensation. We have not issued any long-term equity compensation to our management during the years ended December 31, 2019 or 2018.
Other compensation. When we hire executive officers, our executive officers will be eligible to receive the same benefits, including non-cash group life and health benefits that are available to all employees. We may offer a 401(k) plan to our employees, including our executive officers. This plan will permit employees to make contributions up to a statutory maximum and will permit us to make matching or profit-sharing contributions. To date, we have not offered to our employees any benefit plans, including but not limited a 401(k) plan or made, or committed to make, any matching or profit-sharing contributions under a 401(k) plan.
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Policies related to compensation
Guidelines for equity awards. We have not formalized a policy as to the amount or timing of equity grants to our executive officers. We expect, however, that our board of directors will approve and adopt guidelines for equity awards. Among other things, we expect that the guidelines will specify procedures for equity awards to be made under various circumstances, address the timing of equity awards in relation to the availability of information about us and provide procedures for grant information to be communicated to and tracked by our finance department. As of the date of this report, we have not established a finance department. We anticipate that the guidelines will require that any stock options or stock appreciation rights have an exercise or strike price not less than the fair market value of our common stock on the date of the grant.
Stock ownership guidelines. As of the date of this report, we have not established stock ownership guidelines for our executive officers or the Board of Directors.
Compliance with Sections 162(m) and 409A of the Internal Revenue Code
Section 162(m) of the Internal Revenue Code limits the deductibility of compensation in excess of $1 million paid to certain executive officers, unless such compensation qualifies as performance-based compensation. Among other things, in order to be deemed performance-based compensation for Section 162(m) purposes, the compensation must be based on the achievement of pre-established, objective performance criteria and must be pursuant to a plan that has been approved by our shareholders. At least for the next several years, we expect the cash compensation paid to our executive officers to be below the threshold for non-deductibility provided in Section 162(m), and our equity incentive plans will afford our board of directors with the flexibility to make a variety of types of equity awards to our executive officers, the deductibility of which will not be limited under Section 162(m). However, our board of directors will fashion our future equity compensation awards. However, we do not now know whether any such awards will satisfy the requirements for deductibility under Section 162(m).
We also currently intend for our executive compensation program to satisfy the requirements of Internal Revenue Code Section 409A, which addresses the tax treatment of certain nonqualified deferred compensation benefits.
Executive Compensation
The following table sets forth information concerning all cash and non-cash compensation awarded to, earned by, or paid to the Company’s officer during the years ended December 31, 2019 and 2018 for services to the founding shareholderCompany.
| Name | Position | Year Ended & Period Ended | Salary Paid | Bonus ($) | Stock Awards | Option Awards | Non- Equity Incentive Plan Compensation ($) | All Other Compensation ($) | Total ($) | |||||||||
| Anthony | 2019 | - | - | - | - | - | - | - | ||||||||||
| Iarocci | 2018 | - | - | - | - | - | - | - | ||||||||||
| Michael | 2019 | - | - | - | - | - | - | - | ||||||||||
| Schnaus | 2018 | - | - | - | - | - | - | - |
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Compensation of Directors
The following table sets forth the information concerning cash and non-cash compensation awarded to, earned by, or paid to the Company’s director during the years ended December 31, 2019 and 2018 for services to the Company.
| Name | Year Ended & Period Ended | Fees Earned or Paid in Cash | Stock Awards | Option Awards | Non- Equity Incentive Plan Compensation ($) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) | All Other Compensation | Total ($) | ||||||||
| Anthony | 2019 | - | - | - | - | - | - | - | ||||||||
| Iarocci | 2018 | - | - | - | - | - | - | - | ||||||||
| Michael | 2019 | - | - | - | - | - | - | - | ||||||||
| Schnauss | 2018 | - | - | - | - | - | - | - |
Employment Agreements and Benefits
We currently have one employee, Mr. Anthony J. Iarocci. There is no executive employment agreement between him and the Company.
Potential Payments Upon Termination or Change in Control
As of the date of this report, there were no potential payments or benefits payable to our executive officer upon his termination or in connection with a change in control.
Pension Benefits
No named executive officer received or held pension benefits during the years ended December 31, 2019 and 2018.
Nonqualified Deferred Compensation
No nonqualified deferred compensation was offered or issued to our executive officer for the years ended December 31, 2019 and 2018.
Grants of Plan-Based Awards
During the years ended December 31, 2019 and 2018, we have not granted any plan-based awards to our executive officer.
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Outstanding Equity Awards
No unexercised options or warrants were held by our named executive officer during the years ended December 31, 2019 and 2018. No equity awards were made during the years ended December 31, 2019 and 2018.
Option Exercises and Stock Vested
During the years ended December 31, 2019 and 2018, our executive officer has neither been granted any options, nor did any unvested stock or options granted to our executive officer vest. As of the date of this report, our executive officer did not have any stock options or unvested shares of stock of the Company.
Compensation Committee Interlocks and Insider Participation
During the years ended December 31, 2019 and 2018, we did not have a standing compensation committee. Our Board of Directors was responsible for the functions that would otherwise be handled by the compensation committee. All directors participated in deliberations concerning executive officer compensation, including directors who were also executive officers.
Employment Agreements
We have not entered into an employment agreement with our executive officer. Our decision to enter into an employment agreement, if any, will be made by our compensation committee.
Equity Incentive Plan
We expect to adopt an equity incentive plan. The stockholders’ equity sectionpurpose of the Company containsplan is to attract and retain qualified persons upon whom our sustained progress, growth and profitability depend, to motivate these persons to achieve long-term company goals, and to more closely align these persons' interests with those of our other shareholder by providing them with a proprietary interest in our growth and performance. Our future executive officers, employees, consultants, and non-employee directors will be eligible to participate in the plan. We have not determined the number of shares of our common stock to be reserved for issuance under the proposed equity incentive plan.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
The following classestable sets forth certain information regarding beneficial ownership of capitalour common stock as of December 31, 2013:2019 for:
| · | each person or group known to us to beneficially own 5% or more of our common stock; |
| · | each of our directors and director nominees; |
| · | each of our named executive officers; and |
| · | all of our executive officers and directors as a group. |
Unless otherwise indicated below, to our knowledge, all persons listed below have sole voting and investment power with respect to their shares of common stock, except to the extent authority is shared by spouses under applicable law. Unless otherwise indicated below, each entity or person listed below maintains an address 8217 East Spanish Boot Road, Carefree, Arizona 85377.
The number of shares beneficially owned by each shareholder is determined under rules promulgated by the SEC. The information is not necessarily indicative of beneficial ownership for any other purpose. Under these rules, beneficial ownership includes any shares as to which the individual or entity has sole or shared voting or investment power and any shares as to which the individual or entity has the right to acquire beneficial ownership within 60 days after October 27, 2020, through the exercise of any stock option, warrant, or other right.
| Beneficial Owner | Number of Beneficially | Percentage of Shares Outstanding | |||||
| Anthony J. Iarocci | 21,534,014 | 100.00% | |||||
Item 13. Certain Relationships and Related Transactions, and Director Independence.
Transactions With Related Persons, Promoters And Certain Control Persons
As of December 31, 2018, the Company has a receivable of $1,042 from its controlling stockholder and this receivable was repaid subsequent to December 31, 2018. The receivable is related to advances to fund operations, was fully paid in May 2019, and was non-interest bearing.
The Company does not own or rent property. The office space is provided by an officer at no charge. The value of such office space is nominal.
Director Independence
We do not have a standing nominating, compensation, or audit committee. Rather, the board of directors performs the functions of these committees. We do not believe it is necessary for the board of directors to appoint such committees, because the volume of matters that come before the board of directors for consideration is not so substantial that our directors are usually allowed sufficient time and attention to such matters.
Annual Report on Form 10-K
Copies of our Annual Report on Form 10-K, without exhibits, can be obtained without charge from us at Apex 11 Inc., 8217 East Spanish Boot Road, Carefree, Arizona 85377, t (480) 619-1575.
Item 14. Principal Accountant Fees and Services.
The following table sets forth fees billed to us for principal accountant fees and services for year ended December 31, 2019 and the year ended December 31, 2018.
Year Ended December 31, 2019 | Year Ended December 31, 2018 | |||||||
| Audit Fees | $ | 6,500 | $ | 6,500 | ||||
| Audit-Related Fees | - | - | ||||||
| Tax Fees | - | - | ||||||
| All Other Fees | - | - | ||||||
| Total Audit and Audit-Related Fees | $ | 6,500 | $ | 6,500 | ||||
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(a) Exhibits
The following exhibits are filed with this Report on Form 10-K:
| Exhibit No. | Description | |
| 3.1 | Articles of Incorporation, as currently in effect* | |
| 3.2 | Bylaws, as currently in effect* | |
| 31.1 | 302 Certification – Anthony J. Iarocci | |
| 32.1 | 906 Certification – Anthony J. Iarocci |
NOTE 6. COMMITMENT AND CONTINGENCY
There is no commitment or contingency* Included as an Exhibit to disclose during the period ended December 31, 2013.our Registration Statement on Form 10 filed on June 4, 2013
NOTE 7. SUBSEQUENT EVENTS
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Management has evaluated subsequent events upIn accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to and including February 21, 2014 which isbe signed on its behalf by the dateundersigned, thereunto duly authorized, on the statements were available for issuance and determined there are no reportable subsequent events. 24th day of June 2021.
APEX 11 INC.
By: /s/ Anthony J. Iarocci
Anthony J. Iarocci
CEO, President and Treasurer
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| Signature | Title | Date | ||
/s/ Anthony J. Iarocci Anthony J. Iarocci | President, Chief Executive Officer, (Principal Executive Officer), Secretary, Treasurer (Principal Financial and Accounting Officer), Chairman | June 24, 2021 | ||
/s/ Michael J. Schnaus Michael J. Schnaus | Director | June 24, 2021 |
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Apex 11 Inc.
Index to Exhibits
| Exhibits | Description | |
| Exhibit 31.1 | 302 Certification – Anthony J. Iarocci | |
| Exhibit 32.1 | 906 Certification – Anthony J. Iarocci |
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