SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.DC. 20549
x ☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended June 30, 2014
o 2019☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________ to ____________
Commission File Number: 333-152551
TrexTREX Acquisition Corp. |
(Exact name of registrant as specified in its charter) |
| | 26-1754034 |
(State or other jurisdiction of incorporation or organization) | | (I.R.S. Employer Identification No.) |
| | | |
1800 NE 114th7301 NW 4th Street Suite 2110, Miami, Florida102 Plantation FL | | 3318133317 |
(Address of principal executive offices) | | (Zip Code) |
(305) 895-2865(954) 742-3001 |
(Registrant’s Telephone Number, Including Area Code) |
Securities registered under Section 12(b) of the Act:
Title of each class registered: | | Name of each exchange on which registered: |
None | | None |
Securities registered under Section 12(g) of the Act:
Title of each class registered: | | |
None | | |
Title of each class registered:
None
Indicate by check mark if registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. o☐ Yes x☒ No
Indicate by check mark if registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. o☐ Yes x☒ No
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. x☐ Yes o☒ 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 (§ 229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). x☐ Yes o☒ No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x
☒Indicate by check mark whether the registrant is a large accelerated file,filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | o☐ | Accelerated filer | o☐ |
Non-accelerated filer | o☒ | Smaller reporting company | x☒ |
(Do not check if a smaller reporting company) | Emerging growth company | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). o☒ Yes xNo
☐State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter. As of December 31, 2013,2018, approximately $2,812.60.
As of September 30, 2014,date of filing June 21, 2021 there were 1,938,881 13,589,581 shares of the issuer’s $.001 par value common stock issued and outstanding.
outstanding (par value $.001).Documents incorporated by reference. There are no annual reports to security holders, proxy information statements, or any prospectus filed pursuant to Rule 424 of the Securities Act of 1933 incorporated herein by reference.
TABLE OF CONTENTS
Forward-Looking Information
This Annual Report of TrexTREX Acquisition Corp. on Form 10-K contains forward-looking statements, particularly those identified with the words, “anticipates,” “believes,” “expects,”, “may”, “will”, “plans,” “intends,” “objectives,” and similar expressions. These statements reflect management’s best judgment based on factors known at the time of such statements. The reader may find discussions containing such forward-looking statements in the material set forth under “Management’s Discussion and Analysis and Plan of Operations,” generally, and specifically therein under the captions “Liquidity and Capital Resources” as well as elsewhere in this Annual Report on Form 10-K. Actual events or results may differ materially from those discussed herein. The forward-looking statements specified in the following information have been compiled by our management on the basis of assumptions made by management and considered by management to be reasonable. Our future operating results, however, are impossibleNew risks emerge from time to time; therefore, it is not possible to predict and noall risks. No representation, guaranty, or warranty is to be inferred from those forward-looking statements. The assumptions used for purposes of the forward-looking statements specified in the following information represent estimates of future events and are subject to uncertainty as to possible changes in economic, legislative, industry, and other circumstances. As a result, the identification and interpretation of data and other information and their use in developing and selecting assumptions from and among reasonable alternatives require the exercise of judgment. To the extent that the assumed events do not occur, the outcome may vary substantially from anticipated or projected results, and, accordingly, no opinion is expressed on the achievability of those forward-looking statements. No assurance can be given that any of the assumptions relating to the forward-looking statements specified in the following information are accurate, and we assume no obligation to update any such forward-looking statements, statements, except as required by law. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.
This comprehensive annual report on Form 10-K (the “Super 10-K”) includes the Company’s financial statements for the fiscal year ending 2019. In order to bring the Company’s filings current in an expeditious manner, the Company shall file similar Super 10-K reports for the fiscal year ending, June 30, 2020. The Company became delinquent in its filings primarily due to financial circumstances directly related to the failure of its core operating business. Since fiscal year ending June 30, 2014 until the date of this filing, the Company has not maintained an operating business from which it could draw the financial resources to retain and compensate the required professionals needed to maintain compliance. Each Super 10-K for a given fiscal year contains all required information and disclosures to shareholders that each quarterly and annual report would normally have provided had such quarterly and annual report had been filed timely. In the interest of complete disclosure, the Company has included current information in this annual report for all material events and developments that have taken place since June 30, 2014 through the filing date of this annual report.
ITEM 1. BUSINESS
We were incorporated on January 16, 2008 under the laws of the state of Nevada as Plethora Resources Inc. to commence operations in the business of consulting to oil & gas exploration companies interested in obtaining exploration and production licenses at auction for oil and gas properties in Russia. We were unable to fund our intended business and, on May 28, 2009, but effective February 1, 2009, we acquired a wholly owned subsidiary, Sync2 International Ltd, for the assumption of the debts of Sync2 Agency Ltd, a wholly owned subsidiary of Sync2 International Ltd. Sync2 Agency Ltd is an internet marketing and website development company.
On May 14, 2009 we changed our name to Sync2 Networks Corp. On December 15, 2009, we shut down the operations of Sync2 Agency Ltd. after incurring substantial operating losses, and subsequently wrote-off the investment in Sync2 Agency Ltd.
At the end of 2009 Sync2 International Ltd, became inactive and Sync2 Agency Ltd. was liquidated.
Prior Business Operations
We were previously engaged in the business of acquiring and developing internet marketing and web site development entities and/or their individual software programs designed to enable third-party clients to better market their products through the use of the internet.
2013 Change in Control
On approximately August 14, 2013, there was a change in our control. In accordance with the terms and provisions of that certain escrow agreement dated March 31, 2012 (the “2012 Escrow Agreement”), Warren Gilbert, who was at the time the current President/Chief Executive Officer, Secretary, Treasurer/Chief Financial Officer and sole member of the Board of Directors, acquired in a private transaction an aggregate of 62,863,800 shares of our restricted common stock representing an equity interest of 61% of the total issued and outstanding shares. The amount of consideration paid was $325,000 and were outside funds from unrelated parties. The shares of common stock were acquired as follows: (i) 51,000,000 shares from Artur Etozov; and (ii) 11,863,800 shares from approximately ten separate shareholders each holding less than 5% of the total issued and outstanding.
Domestication of Subsidiary
On April 7, 2014, our Board of Directors deemed it in ourthe best interests of the Company and ourits shareholders to domesticate our subsidiary, Sync2 International Ltd., as a corporation formed under the laws of Malta to a corporation formed under the laws of the State of Nevada (the "Domestication"“Domestication”), which under. Under Nevada statutory law, involves the transfer of an existing corporation from one jurisdiction to another whereby Sync2 International Ltd. shall cease all operations in Malta. On May 1, 2014, we filed Articles of Domestication with the Nevada Secretary of State effecting the domestication of Sync2 International Ltd. as a corporate entity formed under the laws of the State of Nevada, which domestication provides that Sync2 International Ltd. as domesticated in the State of Nevada shall be the same entity as Sync2 International Ltd. organized under the laws of Malta.
As part of the process of domestication of Sync 2 International Ltd, we recognized $516,245 of income during the fiscal year ended June 30, 2013 from the write off of the remaining assets and liabilities of Sync 2 International Ltd.Sync2 International Ltd. entity status has been revoked by the Nevada Secretary of State as of the date of this filing.
FINRA Corporate Action/Information Statement on Form 14C
On October 9, 2013, our Board of Directors and majority shareholders approved a reverse stock split of one for one thousand (1:1,000)1000) of our total issued and outstanding shares of common stock (the “Stock“Reverse Stock Split”) and a change in our name from "Sync2“Sync2 Networks Corp."” to "Trex“TREX Acquisition Corp."” (the "Name Change"“Name Change”). Pursuant to our Bylaws and the Nevada Revised Statutes, a vote by the holders of at least a majority of the Company’s outstanding votes was required to effecteffectuate the Reverse Stock Split and the Name Change. Our articles of incorporation do not authorize cumulative voting. As of the record date of October 9, 2013, we had 103,046,175 voting shares of common stock issued and outstanding. The consenting stockholders of the shares of common stock were entitled to 62,863,800 votes, which represented approximately 61.0% of the voting rights associated with our shares of common stock.stock at that time. The consenting stockholders voted in favor of the Reverse Stock Split and the Name Change described herein in a unanimous written consent dated October 9, 2013. An information statement on Form 14(c) was filed with the Securities and Exchange Commission on December 11, 2013.
On December 11, 2013, we filed an Information Statement on Form 14(c) with the Securities and Exchange Commission, which was furnished to all holders of our common stock as of October 9, 2013, in connection with the action taken by written consent of holders of a majority of the outstanding voting power of the Company to authorize the following: (i) ratification of an amendment to the articles of incorporation (the "Name“Name Change Amendment"Amendment”) to change our name from "Sync2 Networks Corp." to "Trex Acquisition Corp." (the "Name Change");effectuate the Name Change and (vi)(ii) ratification of a reverse stock split of one for one thousand (1:1,000) of our shares of common stock (the "Reversethe Reverse Stock Split").
The name ofSplit.Warren Gilbert was the shareholder of record who holdsheld in the aggregate a majority of our total issued and outstanding common stock and who signed the written consent of stockholders wasstockholders. Prior to the Reverse Stock Split, Warren Gilbert holdingwas the holder of record of 62,863,800 shares of common stock, (61%).
These actions were approved by written consent on October 9, 2013 by our Board of Directors and a majority of holders of our voting capital stock, in accordance with Nevada Revised Statutes. Our directors and majoritywhich was 61% of the shareholders of our outstanding capital stock, asvoting power of the record date of October 9, 2013.have approved the Name Change Amendment and the Reverse Split as determined were in the best interests of our Company and shareholders.
at that time.The Board of Directors had previously considered factors regarding their approval of the Reverse Stock Split including, but not limited to: (i) current trading price of our shares of common stock on the OTC QB Market and potential to increase the marketability and liquidity of our common stock; (ii) possible reluctance of brokerage firms and institutional investors to recommend lower-priced stocks to their clients or to hold in their own portfolios; (iii) desire to meet future requirements of per-share price and net tangible assets and shareholders’ equity relating to admission for trading on other markets; and (iv) posturing us and our structure in favorable position in order to effectively negotiate with potential acquisition candidates regarding assets. Our Board of Directors approved the Name Change and the Reverse Stock Split and recommended our majority shareholders review and approve the Name Change and the Reverse Stock Split.
The Reverse Stock Split was effectedeffectuated based upon the filing of appropriate documentation with FINRA. The Reverse Stock Split decreased our total issued and outstanding shares of common stock from approximately 103,046,175 shares to 103,046 shares of common stock. The common stock will continue to be $0.001 par value. Our trading symbol changed to "TRXA"“TRXA”. The new cusipAfter the Reverse Stock Split and the Name Change, the CUSIP number for the Company isbecame 89532J 108.
All subsequent common stock references in this filing are post-Reverse Stock Split figures, unless otherwise identified.The Name Change was effectedeffectuated to better reflect our future business operations.
goal to acquire an operating business via merger or acquisition.2014 Change of Control
During fiscal year ended June 30, 2014 and to date, we did not issue any shares of common stock other than shares issued for debt conversion as discussed below.
During 2010, we had received monies from Boardwalk Business Developments Inc. (“Boardwalk”) pursuant to an operating loan and other advances made by Boardwalk to us. Therefore, we evidenced the monies loaned by that certain convertible debenture dated June 30, 2010 (the “Convertible Debenture”), which Convertible Debenture was and has been evidenced on our audited financial statements. Subsequently, Boardwalk and certain assignees (each an “Assignee” and collectively, the “Assignees”) entered into those certain assignments of convertible debenture dated July 15, 2012 (the “Assignments”) pursuant to which Boardwalk assigned and transferred to each of the Assignees a portion of its right, title and interest in Control
On approximately August 14, 2013, thereand to the Debenture for payment of consideration from each of $8,000. The Assignees further assigned portions of their respective debt to others for consideration. We received those certain conversion notices dated September 21, 2014 from certain of the Assignees and others (collectively, the “Conversion Notices”) and desired to settle the debt evidenced by the Convertible Debenture in the aggregate amount of $691,926.00 by conversion into an aggregate post-Reverse Stock Split 1,835,835 shares of our restricted common stock at $0.3769 (which conversion price was
a changechanged based on the 1:1000 reverse stock split). Therefore, effective on September 21, 2014, our Board of Directors approved the issuance of an aggregate 1,835,835 shares of our restricted common stock to the Assignees and others in
our control. In accordance with the terms and provisions of
that certain escrow agreement dated March 31, 2012 (the "Escrow Agreement"), Warren Gilbert, who is the
current President/Chief Executive Officer, Secretary, Treasurer/Chief Financial Officer and sole memberrespective Conversion Notices. The shares of common stock were issued at $0.3769 per share. The shares of common stock were issued to United States residents in reliance on Section 4(2) of the
BoardSecurities Act. The securities have not been registered under the Securities Act or under any state securities laws and may not be offered or sold without registration with the United States Securities and Exchange Commission or an applicable exemption from the registration requirements. The Assignees and others acknowledged that the securities to be issued have not been registered under the Securities Act, that they understood the economic risk of
Directors, acquiredan investment in
a private transaction anthe securities, and that they had the opportunity to ask questions of and receive answers from our management concerning any and all matters related to acquisition of the securities.The shares related to the Boardwalk Convertible Debenture were issued by the Company on January 21, 2020. No Assignee or other subsequent assignee holds in the aggregate of 62,863,800 shares of our restricted common stock representing an equity interest of 61%exceeding 4.99% of the total issued and outstanding shares. The amount of consideration paid was $325,000 and were outside funds from unrelated parties. The shares of common stock were acquired as follows: (i) 51,000,000 shares from Artur Etozov; and (ii) 11,863,800 shares from approximately ten separate shareholders each holding less than 5%stock. As of September 21, 2014, Mr. Warren Gilbert is no longer the controlling shareholder of the total issued and outstanding.
Company.CURRENT BUSINESS OPERATIONS
For the fiscal year ending June 30, 2019, the Company did not have any material business operations. From the period covered in this filing until the date of this filing, the Company has not had any material business operations.
2014 Failed Prospective Kerr Utility Technologies Inc.
Reverse Merger TransactionOn May 30, 2014, our Board of Directors approved the execution of a non-binding indicationLetter of interestIntent in the form of a Term Sheet (the “Term“2014 Term Sheet”) with Kerr Utility Technologies Inc. ("Kerr"(“Kerr”) regarding a prospective tax-free stock-for-stock exchange reverse merger transaction with Kerr (the "Merger").Kerr. In connection with the Merger,this prospective reverse merger, we intendhad intended to incorporate and establish Trex Acquisitions, Inc. as a Nevada corporation and ourtwo wholly owned subsidiary (the "Merger Sub") and Trex Merger, Inc., a Nevada corporation ("Newco")subsidiaries of the Company to accommodatefacilitate the Kerr acquisition. Ouracquisition (collectively, the “Merger Vehicles”). At that time, our Board of Directors has also approved a private placement offering to raise, on an "all“all or none"none” basis, an aggregate sum of $500,000 for Kerr’s benefit prior to consummation of the Merger.Kerr acquisition.
In July 2014, in anticipation of the closing of the reverse merger transaction, a related party advanced, on behalf of the Company, $100,000 to Kerr (the “July 2014 Advance”). The foregoing information pertainingJuly 2014 Advance is in addition to the private placement offering should$100,000 advanced by the same related party in May 2014 (the “May 2014 Advance”). The Kerr acquisition was ultimately not be construed in any manner whatsoever as a solicitation to buy or offer to sell our common stock shares.
The Term Sheet provides that as condition precedents to the Merger: (i) all of our creditors holding notes shall convert or exchange their notes for our common stock shares; (ii) Kerr shall deliver to us its audited financial statements for the stub period ended 2013concluded, and the
fiscalCompany could not recover the $200,000 in funds reflected in the May 2014 Advance and the July 2014 Advance. As a result, the Company had written-off both advances totaling $200,000 ($100,000 in the year
endedending June 30, 2014
and $100,000 during the quarter ended September 30, 2015); specifically accounting for the May 2014 Advance during the Company’s fiscal year ending June 30, 2014 and the July 2014 Advance during the Company’s quarter ended September 30, 2015.As of September 30, 2015, the 2014 Term Sheet with Kerr is no longer in effect, no Merger Vehicles had been established, and the Kerr acquisition was never consummated.
2018 Failed Reverse Merger Attempt
On April 19, 2018, the Company entered into a non-binding indication of interest (“LOI”) to acquire Kaneptec Enterprises, Inc., a company engaged in the hemp and cannabidiol business (“Kaneptec”) in a reverse merger (the "Kerr Audited Financial Statements"“Kaneptec Transaction”); and (iii) we will adopt a stock incentive plan to create a pool of options representing approximately 10%. In reliance of the fully dilutedLOI, the Company sold 350,000 shares to a related party for $47,500, and this cash was transferred to Kaneptec in order to facilitate the Kaneptec Transaction. This potential merger candidate also advanced approximately $20,000 to the Company in anticipation of the Kaneptec Transaction. During the due diligence phase, the Company’s consultants determined that Kaneptec had made material misrepresentations; therefore, the Company ceased all further negotiations with Kaneptec. The Company has not recovered any sums advanced to Kaneptec in contemplation of the failed Kaneptec Transaction.
2020 Stock Issuances
On January 21, 2020, the Company formally issued and outstanding on an as converted(a) 1,835,835 shares of its common stock equivalent basis.
The Term Sheet further provides that we will file a "resale" Form S-1 Registration Statementin connection with prior Boardwalk convertible debt conversions, (b) 450,000 shares of its common stock in connection with management compensation, (c) 250,000 shares of its common stock to unit subscribers in connection with the
Securitiesfailed Kerr transaction, and
Exchange Commission (“SEC”) to register all(d) 350,000 shares of its common stock
in connection with a 2018 private sale of 350,000 shares
held by our existing shareholders and maintain effectivenessto a related party for $47,500.On March 12. 2020, the Company issued 300,000 shares of the "resale" registration statement from the effective date through twelve months, at which time exempt salesits common stock in connection to professional service providers pursuant to Rule 144their respective engagement agreements.
On June 24, 2020, the Company issued 8,900,000 shares of its common stock in connection with the Securities Actconversion of 1933,$890,000 in debt owed to consultants pursuant to a July 1,2014 consulting agreement.
On November 20, 2020, the Company issued 1,300,000 shares of its common stock in connection with a prepayment of an $80,000 future expense advanced by two related parties.
On November 16, 2020 the company issued 500,000 were issued to the estate of a former shareholders.
2020 TRXA Merger Sub Inc.
March 13, 2020, the Company incorporated a wholly owned subsidiary, TRXA Merger Sub Inc., a Delaware corporation (“Merger Sub”) in order to facilitate the acquisition of a pre-revenue Software-as-a-Service internet platform business. The Company’s sole Officer and Director currently serves as amended (“Securities Act”), may be permitted for purchasers of the sharessole officer and existing shareholders.
The Term Sheet also provides that after consummationdirector of the Merger we will change our name to "Kerr Utility Technologies, Inc.", we shall have a Board of Directors consisting of five Board members, including one member appointed by us whereby such Board Member appointee shall serve as a member of both our audit and compensation committees.
Conditions to closing the Merger include negotiating and drafting of definitive agreements, obtaining all necessary Board of Director and shareholder approval and third party consents, and satisfactory completion of our due diligence as well as Kerr. In the event Kerr fails to deliver to us the Kerr Audited Financial Statements, the proceeds of $500,000 raised pursuant to the private placement offering shall be held in escrow until the Kerr Audited Financial Statements have been delivered to us.Sub. As of the date of this Annual Report, management believes that we are close to finalizingfiling, neither the structure ofCompany nor the proposed merger and will consummateMerger Sub have entered into a definitive merger agreement within the next four weeks.
Kerr provides consulting and contracted servicesor non-binding letter of intent to clients in the broadcast, microwave, and wireless industries.
Readers of this Annual Report on Form 10-K cautioned of the following regarding the foregoing description of the Term Sheet: (a) the Term Sheet isacquire a “non-binding indication of interest” and is not binding upon any of the parties and such proposed terms in the Term Sheet will not be binding upon any of the parties until they are incorporated into a final bindingcompany. The Company’s Acquisition Consultants continue to provide vetted candidates for merger agreement that is executed by all parties to such agreement; (b) although our Board of Directors has approved of the proposed Merger and has full intention of proceeding with the Merger, there are no assurances that such Merger will ever be completed and if it does that the operations of Kerr will be successful; (c) the Merger will be subject to regulatory review by the SEC, including the filing of a “Super 8-K” filing with the SEC, corporate filings with the State of Nevada and written notice requirements to FINRA; and (d) we are presently considered a “shell company” (as such term is defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended; however, as a result of the merger related transactions and Share Exchanges and providing current Form 10 Information in the “Super 8-K filing (subject to SEC Review and possible amendments to the “Super 8-K filing), we will have met the necessary requirements to satisfy the conditions contained in Rule 144(i)(2) under the Securities Act and cease to be a “shell company”.
Kerr Business Operations
In the event the Merger is consummated, our business operations will be those of Kerr. Kerr provides consulting and contracted services to clients in the broadcast, microwave, and wireless industries. Kerr intends to become an industry leader in the communications and cell tower industry through the following strategies: (i) applications as turnkey sight development, equipment installation, integration/commissioning, and emergency response services; (ii) hire and retain outstanding performance by technicians available for tower climbing, licensed electrical work and qualified personnel with the skills required to cost effectively meet our customers’ projects requirements; and (iii) consistently excel in safety training and awareness and to comply with regulatory practices.
The below is a summary of the services provided by Kerr:
Microwave. Microwave related service is one of Kerr’s core competencies. Kerr continually updates certifications, training staff on new products, and reviewing age-old industry standards. Its goal is to ensure that every microwave project will not only meet reliability standards, but will stand the test of time, weather, and 3rd party audits (including site owners and governing agencies such as the FCC. Services include: (i) project management and coordination; (ii) LOS surveys, donor searches and site selection; (iii) system design, engineering, coordination and licensing; (iv) antenna system installation and testing; (iv) radio system installation, testing and integration; (v) factory, bench, field-testing and acceptance; (vi) complete system rental and leasing; (vii) system upgrades; and (viii) emergency support, troubleshooting and maintenance.
Antenna Systems. Antenna and line installation is one of the fundamental tasks to be executed in a wireless network. Kerr employs certified tower personnel and sweep testers to perform these basic functions day in and day out. All personnel are certified and/or trained in connector installation, ground kit, weatherproofing, bending, entry port installation, jumper connections, connector torque specs, height verification procedures, azimuth verification procedures, and antenna installation requirements. Kerr routinely provide expert service, installation, and testing in the following areas: (i) boom arm, standoff, and custom mount installation; (ii) tower, monopole, water tank, rooftop, and stealth structure installation; (iii) antenna installation; (iv) amplifier, diplexer, and coupler installation; (v) RET system installation; (vi) down tilt and azimuth verification and adjustment; (vii) centerline verification; (viii) transmission line installation; (ix) grounding; (x) weather proofing; (xi) GPS system installation; (xii) paint to match, concealment upgrades, screening; (xiii) DAS system installation; (xiv) in building systems; (xv) microcell systems; (xv) cable support infrastructure; (xvi) entry port installation; (xvii) sweep testing; (xviii) antenna, jumper, and amplifier change outs; and (xix) troubleshooting, repairs, and maintenance
Tower and Site Maintenance. Site maintenance is one of Kerr’s core services with focus on service and commitment to safety. Kerr’s reporting process and documentation packages solidify its service efforts and provides validation on the condition of systems/networks. Kerr tailors a maintenance program to fit specific needs and is available for non-contract “call-outs” at any time. Existing contracts are as basic as a once-a-year tower inspection to an expansive sole source regional commitment for all standard maintenance and emergency call outs covering hundreds of sites. Kerr currently offers contract maintenance services in the following disciplines: (i) tower inspections, audits, and repairs; (ii) FCC required inspections (microwave, broadcast, 2-way and more); (iii) microwave system maintenance; (iv) antenna and line inspections and maintenance; (v) equipment audits and verification; (vi) satellite system inspection and maintenance; (vii) fiber/telco testing and inspection; (viii) DC power and battery system inspection and maintenance; (ix) sweeping and testing; (x) site as-builts; (xi) Rf studies; (xii) antenna down-tilt, azimuth, and optimization services; (xiii) lighting maintenance; (xiv) HVAC maintenance; (xv) generator maintenance; (xvi) landscaping maintenance; (xvii) housekeeping; (xviii) decommissioning services; (xix) asset recovery; and (xx) safety and OSHA compliance inspections.
Antenna System Installation and Integration. Kerr believes that quality, safety, structural integrity, reliability, and aesthetics are all key elements to successful microwave antenna system deployment efforts. Plumb and structurally sound mounts, number, type, and placement of stiff arms, clean waveguide routes and proper bending radius, proper connector installation, dish assembly, rigging, proper grounding, and pressurization specifically impact each system. Kerr’s crews have been trained internally through Andrew Institute and by other manufacturers.
Sweep testing is always performed, whether required or not. Properly trained technicians use Anritsu Wiltrons or HP Network analyzers to sweep coax, waveguide, and antennas. Kerr’s crew supervisors, leads, technicians, and project managers are all skilled in basic link budget calculations, and every hop has a completed engineering as-built identifying expected RSL's based on actual site and equipment parameters. Path alignments are then performed using several methods, again by trained personnel. Signal generators and spectrum analyzers, path boxes, or simply utilizing known AGC curves and actual system radios. All alignments are validated with the as-built engineering, actual sweeps, and test equipment readings. Antenna centerlines are provided using drop tapes for all dish installations. A comprehensive installation report including photos, engineering as-builts, and all test/alignment results are also standard deliverables provided by Kerr.
Ancillary Equipment Installation. Kerr provides full service microwave systems installation, testing, and integration. Its technicians are experienced with all facets of microwave system deployment, ancillary equipment and hardware. Its technicians are experienced with the design, installation, testing, and integration of the following equipment: (i) cross connect equipment; (ii) muxes; (iii) patch panels; (iv) switchers; (v) routers; (vi) controllers; (vii) dehydrators; (viii) DC power; (ix) AC power; (x) grounding; (xi) racking; (xii) earthquake bracing; and (xiii) cable ladder.
Kerr’s technicians are experienced with both optical and copper interface equipment as well as Ethernet applications. Kerr navigates in and around mixed technology and migrating systems.
Troubleshooting, Maintenance and Repair. Kerr offers a wide range of site, microwave, tower, and antenna maintenance and support services. Kerr offers quality troubleshooting, preventative and corrective maintenance, and repair services that can be tailored to a customer’s specific needs. From routine monthly maintenance to on-call maintenance 24 hours a day, Kerr customizes packages to suit the network's needs of a customer.
A microwave system that is designed and installed properly will be more reliable than leased facilities, but these systems do need to be maintained for system integrity and FCC compliance. In some cases robust systems may encounter unexpected damage due to weather or other occurrences, and interference, fading, and poorly designed or installed systems can create problems. Kerr routinely responds, troubleshoots and repairs problematic microwave systems. Kerr provides customers with recommendations, new designs, budgetary proposals, and corrective action details for every emergency “call out” responded to. Kerr also offers flexible and cost effective preventive maintenance services as follows: (i) path re-alignment; (ii) stiff-arm upgrades, additions, and corrections; (iii) ice shield installation; (iv) mount replacement, correction; (v) interference mitigation; (vi) LOS verification, fresnel clearance verification; (vii) lease line testing; (viii) radio troubleshooting; (ix) DC power troubleshooting; (x) cross connect testing and troubleshooting; (xi) interconnect cabling testing and re-termination; (xii) waveguide sweeps; (xiii) power level verification; (xiv) frequency verification; (xv) waveguide/coax connection replacement; (xvi) feed horn leveling, polarity check; and (xvi) pressurization troubleshooting and correction.
Prior Business Operations
We were previously engaged in the business of acquiring and developing internet marketing and web site development entities and/or their individual software programs to assist third-party clients in marketing their products and in maximizing the use of the internet to achieve those third-party clients' ultimate business objectives. However, based upon the effective date of the Name Change and the Term Sheet, we anticipate that the nature of our business operations will change.
Company.RESEARCH AND DEVELOPMENT
During the last threetwo fiscal years no time was spent on specialized research and development activities and has no plans are contemplated in the future.
EMPLOYEES AND EMPLOYMENT AGREEMENTS
As of the date of this Annual Report filing, we have no employees other than our officers, Warren Gilbertemployees. Our officer Frank Horkey as President/Chief Executive Officer/Chief Financial Officer. On January 1, 2015, the Company entered into a five-year contract with Mr. Horkey to, in addition to his roles as sole Officer and FrankDirector, to provide consulting services related to vetting potential acquisition targets. Mr. Horkey shall receive 350,000 shares of the Company’s restricted common shares as Vice President. We doof January 1, 2015 for the performance of his multiple roles. The Company also entered into a Consulting Agreement with Tonia Pfannestiel. Ms. Pfannenstiel will provide managerial oversight for a period not currently have formal employment agreements with either Messrs Gilbert or Horkey. less than two year. Ms. Pfannenstiel shall receive 100,000 shares of the Company’s common shares. Mr. Horkey’s shares and Ms. Pfannenstiel shares were issued by the Company on January 21, 2020.
We anticipate that we will retain independent contractors as consultants to support our expansion and business development. We are not a party to any employment agreements.
An investment in these securities involves an exceptionally high degree of risk and is extremely speculative in nature. Following are what we believe are allAs a “smaller reporting company”, the material risks involved if you decide to purchase shares in this offering.
The risks described below are the ones we believe are most important for you to consider. These risks are not the only ones that we face. If events anticipated by any of the following risks actually occur, our business, operating results or financial condition could suffer and the price of our common stock could decline.
RISKS RELATING TO OUR BUSINESS IN EVENT MERGER IS NOT CONSUMMATED
In the Event the Merger is Not Consummated, as Part of Our Potential Growth Strategy, We Will be Required to Seek Further Business Opportunities.
In the event the MergerCompany is not consummated, and as part of our growth strategy, we will be required to seek and identify further prospective business opportunities. Any subsequent acquisition may pose substantial risks to our business, financial condition, and results of operations. In pursuing potential acquisitions, we will compete with other companies, many of which have greater financial and other resources to acquire a business with potential successful revenue generating ability and attractive business operations. Even if we are successful in acquiring a further business and its operations, there is no guarantee it will produce revenue at any anticipated level. There can be no assurance that we will be able to successfully integrate some other type of business operations, which could result in substantial costs and delays or other operational, technical, or financial problems. Further, potential acquisitions could disrupt any ongoing business operations. If any of these events occur, it would have a material adverse effect upon our operations and results from operations.
We Will Need to Secure Additional Financing ifprovide the Merger is Not Consummated to Further Business Operations.
In the event the Merger is not consummated, we will require significant additional financing in order to commence and continue any business operations. Furthermore, if the cost of our planned business operations are greater than anticipated, we may have to seek additional funds through public or private share offerings or arrangements with corporate partners. There can be no assurance that we will be successful in our efforts to raise these required funds, or on terms satisfactory to us. In the event the Merger is not consummated, the continued development of our business will depend upon our ability to establish commercial viability and to ultimately develop cash flow from operations and reach profitable operations. We currently are in the development stage. We are experiencing significant negative cash flow. Accordingly, the sources of funds presently available to us are through the sale of equity. We presently believe that significant debt financing will not be an alternative to us as we are a development company. In the event the Merger is not consummated, we may finance our business by offering an interest in future assets or to obtain project or operating financing from financial institutions, neither of which is presently intended. If we are unable to obtain this additional financing, we will not be able to continue business operations and our assessment of the commercial viability of any assets. Further, if we are able to establish that development of future business operations is commercially viable, our inability to raise additional financing at this stage would result in our inability to generate potential revenue.We Have a History of Operating Losses and There Can Be No Assurance We Will Be Profitable in the Future.
We have a history of operating losses, expect to continue to incur losses, and may never be profitable, and we must be considered to be in the developmental Further, we may be dependent on sales of our equity securities and debt financing to meet our cash requirements. Although we recorded a net profit of $466,759 for fiscal year ended June 30, 2013 as compared to a net loss of $37,637 for fiscal year ended June 30, 2014, we have incurred net losses of $1,404,207 since inception (January 16, 2008) to June 30, 2014. As of June 30, 2014, we had an accumulated deficit of $698,493. Further, we do not expect positive cash flow from operations in the near term. We anticipate a change in business operations. Therefore, it is quite likely that additional capital may be required in the event further working capital is necessary because our operating costs will increase beyond our expectations or we encounter greater costs associated with general and administrative expenses or offering costs.
We May Need Additional Capital in the Future, But There is No Assurance That Funds Will Be Available on Acceptable Terms, or at All.
We may need to raise additional funds in order to achieve growth pertaining to the business operations of Kerr or fund other business initiatives. This financing may not be available in sufficient amounts or on terms acceptable to us and may be dilutive to existing stockholders if raised through additional equity offerings. Additionally, any securities issued to raise funds may have rights, preferences or privileges senior to those of existing stockholders. If adequate funds are not available or are not available on acceptable terms, our ability to expand, develop or enhance services or products, or respond to competitive pressures may be materially limited.
Any Existing Indebtedness Could Adversely Affect Our Financial Condition and We May Not Be Able to Fulfill Our Debt Obligations.
Any proposed indebtedness may contain various covenants that may limit our ability to, among other things: (i) incur or guarantee additional indebtedness; (ii) pay dividends or make other distributions to our stockholders; (iii) make restricted payments; (iv) engage in transactions with affiliates; and (v) enter into proposed business transactions or combinations. These restrictions could limit our ability to withstand general economic downturns that could affect our business, obtain future financing, make acquisitions or capital expenditures, conduct operations or otherwise capitalize on business opportunities that may arise. Additionally, if we incur substantial debt for working capital purposes, we may use a significant portion of our cash flow to pay interest on our outstanding debt, limiting the amount available for working capital, capital expenditures and other general corporate purposes.
We Will Need to Restructure Our Business to Realize Any Profitability and Cash Flow.
Based upon the termination of current business operations, the possibility that the Merger will not be consummated and thus the unknown of future business prospects, we anticipate we may experience significant fluctuations in our operating results and rate of growth. Due to our limited operating history, we may not be able to accurately forecast our rate of growth. We base our current and future expense levels and our investment plans on estimates of operating costs associated with Kerr involving new business operations and consummation of contractual relations. Our current expenses and investments are to a large extent currently fixed, and we may not be able to adjust our spending quickly enough if our future prospects regarding Kerr fall short of our expectations. Any potential revenue growth may not be sustainable and our company-wide percentage growth rate will decrease in the future.
We Depend on the Efforts and Abilities of Our Officers.
We currently have two officers who are Warren Gilbert as our President/Chief Executive Officer/Chief Financial Officer, and Frank Horkey as our Vice President. Outside demands on our officers’ time may prevent them from devoting sufficient time to our operations. In addition, the demands on these individuals time will increase because of our status as a public company. Messrs. Gilbert and Horkey, and the current officers of Kerr, have limited experience in managing a public company, which may impact our ability to meet our financial and business objectives as potential investors may not want to invest in a company whose management has limited public company management experience. The interruption of the services of our management could significantly hinder our operations, profits and future development, if suitable replacements are not promptly obtained. We do not currently have any executive compensation agreements. We cannot guaranty that our management will remain with us.
Our Management Ranks are Thin, and Losing or Failing to Add Key Personnel Could Affect Our Ability to Successfully Grow Our Business.
Our future performance depends substantially on the continued service of our management. In particular, our success depends upon the continued efforts of our management personnel, including our officers Messrs. Gilbert and Horkey, and the proposed management of Kerr in the event the Merger is consummated. We cannot guarantee that Messrs. Gilbert and Horkey or the management of Kerr will remain.
The Costs to Meet our Reporting Requirements as a Public Company Subject to the Securities Exchange Act of 1934 will be Substantial and May Result in Us Having Insufficient Funds to Operate our Business.
We will incur ongoing expenses associated with professional fees for accounting and legal expenses associated with being a public company. We estimate that these costs will range up to $30,000 per year for the next few years. Those fees will be higher if our business volume and activity increases. Those obligations will reduce and possibly eliminate our ability and resources to fund our operations and may prevent us from meeting our normal business obligations.
Our Auditors Have Questioned Our Ability to Continue Operations as a “Going Concern.” Investors May Lose All of Their Investment if We are Unable to Continue Operations and Generate Revenues.
We hope to obtain significant revenues from future product sales. In the absence of significant sales and profits, we may seek to raise additional funds to meet our working capital needs, principally through the additional sales of our securities. However, we cannot guarantee that we will be able to obtain sufficient additional funds when needed, or that such funds, if available, will be obtainable on terms satisfactory to us. As a result, substantial doubt exists about our ability to continue as a going concern.
We are Subject to the Section 15(d) Reporting Requirements Under the Securities Exchange Act of 1934 Which Does Not Require a Company to File All the Same Reports and Information as a Fully Reporting Company Pursuant to Section 12.
We are subject to the Section 15(d) reporting requirements according to the Securities Exchange Act of 1934, or Exchange Act. As a filer subject to Section 15(d) of the Exchange Act:
· | we are not required to prepare proxy or information statements; |
· | we will be subject to only limited portions of the tender offer rules; |
· | our officers, directors, and more than ten (10%) percent shareholders are not required to file beneficial ownership reports about their holdings in our company; |
· | our officers, directors, and more than ten (10%) percent shareholders are not subject to the short-swing profit recovery provisions of the Exchange Act; and |
· | more than five percent (5%) holders of classes of your equity securities will not be required to report information about their ownership positions in the securities. |
RISKS RELATED TO THE BUSINESS OF KERR IN EVENT MERGER IS CONSUMMATED
A Failure to Successfully Execute Kerr’s Strategy of Acquiring Other Businesses to Grow Kerr Could Adversely Affect Kerr’s Business, Financial Condition and Results of Operation.
Kerr intends to expand its business through, among other things, acquiring companies. However, Kerr may be unable to find suitable acquisition candidates or to complete acquisitions on favorable terms, if at all. Kerr’s acquisition strategy is subject to the following risks: (i) difficulty integrating the acquired companies; (ii) ongoing business and management’s attention may be disrupted or diverted by transition or integration issues and the complexity of managing geographically or culturally diverse enterprises; (iii) non-realization of anticipated cost savings or other financial benefits; (iv) difficulty applying expertise in one market to another market; (v) difficulty retaining or hiring key personnel, customers and suppliers to maintain expanded operations; (vi) inadequate internal resources to support Kerr’s operations as it expands, particularly if Kerr is awarded a significant number of contracts from an acquisition; (vii) difficulty retaining and obtaining required regulatory approvals, licenses and permits; (viii) inability to obtain additional equity or debt financing on terms acceptable to Kerr or at all and any such financing could result in dilution to stockholders, impact ability to service debt within scheduled repayment terms and inclusion of covenants or other restrictions that would impede ability to manage operations; (ix) failure to or inability to discover liabilities of any acquired companies during course of performance of due diligence; and (x) required to record additional goodwill as a result of an acquisition, which would reduce tangible net worth.
Any of these risks could prevent us from executing an acquisition growth strategy, which could adversely affect Kerr’s business, financial condition, results of operations and prospects.
Kerr Derives a Significant Portion of Its Revenue From Master Service Agreements That May be Cancelled by Customers on Short Notice or Which We May be Unable to Renew of Favorable Terms or at All. In Such Event, Kerr’s Revenues and Results of Operations May be Negatively Impacted.
During fiscal year ended December 31, 2013, Kerr derived 100% of its revenues from master service agreements and long-term contracts, primarily through Ericsson Inc., none of which require Kerr’s customers to purchase a minimum amount of services. The majority of these contracts may be cancelled by Kerr customers upon minimum notice (typically 60 days), regardless of whether or not Kerr is in default. In addition, many of these contracts permit cancellation of particular purchase orders or statements of work without any notice. Should any of the foregoing occur, Kerr’s results of operations will be negatively affected.
Kerr’s Results of Operations May be Negatively Impacted From Its Master Service Agreements.
Master service agreements typically do not require Kerr customers to assign a specific amount of work to Kerr until a purchase order or statement of work is signed. Consequently, projected expenditures by customers are not assured until a definitive purchase order or statement of work is placed with Kerr and the work is completed. Furthermore, Kerr customers generally require competitive bidding of these contracts. As a result, Kerr could be underbid by its competitors or required to lower the price charged under a contract being rebid. The loss of work obtained through master service agreements and long-term contracts or the reduced profitability of such work could adversely affect Kerr’s business or results of operations.
If Kerr Does Not Accurately Estimate the Overall Costs When It Bids on a Contract That is Awarded to Kerr, Kerr May Achieve a Lower Than Anticipated Profit or Incur a Loss on the Contract.
A significant portion of Kerr’s revenues is from fixed unit price contracts that require Kerr to perform the contract for a fixed unit price irrespective of its actual costs. Kerr bids for these contracts based on its estimates of overall costs, but cost overruns may cause Kerr to incur losses. The costs incurred and any net profit realized on such contracts can vary, sometimes substantially, from the original projections due to a variety of factors, including, but not limited to: (i) onsite conditions that differ from those assumed in the original bid; (ii) delays in project starts or completion, including as a result of weather conditions; (iii) fluctuations in the cost of materials to perform under a contract; (iv) contract modifications creating unanticipated costs not covered by change orders; (v) changes in availability, proximity and costs of construction materials, as well as fuel and lubricants for our equipment; (vi) availability and skill level of workers in the geographic location of a project; (vii) suppliers’ or subcontractors’ failure to perform due to various reasons, including bankruptcy; (viii) fraud or theft committed by Kerr employees; (ix) mechanical problems with machinery or equipment; (x) citations or fines issued by any governmental authority; (xi) difficulties in obtaining required governmental permits or approvals or performance bonds; (xii) changes in applicable laws and regulations; and (xiii) claims or demands from third parties alleging damages arising from Kerr’s work or from the project of which Kerr’s work is a part.
Kerr’s Contracts May Require Extra Performance or Change Order Work Which May Result in Disputes and Adversely Affect its Business, Financial Condition and Results of Operations.
Kerr’s contracts generally require it to perform extra or change order work as directed by the customer, even if the customer has not agreed in advance on the scope or price of the extra work to be performed. This process may result in disputes over whether the work performed is beyond the scope of the work included in the original project plans and specifications or, if the customer agrees that the work performed qualifies as extra work, the price that the customer is willing to pay.
Kerr generally recognizes revenues when services are invoiced. To the extent that actual recoveries with respect to change orders or amounts subject to contract disputes or claims are less than the estimates used in its financial statements, the amount of any shortfall will reduce Kerr’s future revenues and profits, and this could adversely affect its reported working capital and results of operations. In addition, any delay caused by the extra work may adversely impact the timely scheduling of other project work and Kerr’s ability to meet specified contract milestone dates.
Kerr Derives a Significant Portion of Its Revenue From One Customer. In the Event Kerr Should Loose That Customer, Its Business, Financial Condition and Results of Operations May be Negatively Impacted.
Kerr’s one major customer, Ericsson, Inc., accounted for approximately 95% of its total revenues for fiscal year ended December 31, 2013. Should Ericsson Inc. terminate its business relationship with Kerr, Kerr’s operations, revenues and results of operation will be negatively impacted.
Kerr’s Business is Labor Intensive and if Kerr is Unable to Attract and Retain Key Personnel and Skilled Labor or if Kerr Encounters Labor Difficulties, Its Ability to Bid for and Successfully Complete Contracts May be Negatively Impacted.
Kerr’s ability to attract and retain reliable, qualified personnel is a significant factor that enables Kerr to successfully bid for and profitably complete its work. Kerr’s future success depends on its ability to attract, hire and retain project managers, programmers, supervisors, foremen, laborers and other highly skilled personnel. Kerr’s ability to do so depends on a number of factors, such as general rates of employment, competitive demands for employees possessing the skills Kerr needs and the level of compensation required to hire and retain qualified employees. Kerr may also spend considerable resources training employees who may then be hired by competitors, forcing Kerr to spend additional funds to attract personnel to fill those positions. Competition for employees is intense, and Kerr could experience difficulty hiring and retaining the personnel necessary to support its business. Kerr’s labor expenses may also increase as a result of a shortage in the supply of skilled personnel. If Kerr does not succeed in retaining its current employees and attracting, developing and retaining new highly skilled employees, its reputation may be harmed and future earnings may be negatively impacted.
If Kerr is Unable to Attract and Retain Qualified Executive Officers and Managers, Kerr Will be Unable to Operate Efficiently Which Could Adversely Affect Kerr’s Business, Financial Condition and Results of Operations.
Kerr depends on the continued efforts and abilities of its executive officers to establish and maintain its customer relationships and identify strategic opportunities. The loss of any one of them could negatively affect Kerr’s ability to execute its business strategy and adversely affect its business, financial condition, results of operations and prospects. Competition for managerial talent with significant industry experience is high and Kerr may lose access to executive officers for a variety of reasons, including more attractive compensation packages offered by competitors. Although Kerr has entered into employment agreements with certain of its executive officers and certain other key employees, Kerr cannot guarantee that any of them or other key management personnel will remain employed by Kerr for any length of time.
Kerr Maintains a Workforce Based Upon Current and Anticipated Workloads and Thus May Incur Significant Costs in Adjusting Its Workforce Demands, Including Addressing Understaffing of Contracts if It Does Not Receive Future Contract Awards or if These Awards are Delayed.
Kerr’s estimates of future performance depend, in part, upon whether and when it will receive certain new contract awards. Kerr’s estimates may be unreliable and can change from time to time. In the case of larger projects, where timing is often uncertain, it is particularly difficult to project whether and when Kerr will receive a contract award. The uncertainty of contract award timing can present difficulties in matching workforce size with contractual needs. If an expected contract award is delayed or not received, Kerr could incur significant costs resulting from retaining more staff than is necessary. Similarly, if Kerr underestimate the workforce necessary for a contract, Kerr may not perform at the level expected by the customer and harm its reputation with the customer. Each of these may negatively impact Kerr’s business, financial condition, results of operations and prospects.
Timing of the Award and Performance of New Contracts Could Adversely Affect Kerr’s Business, Financial Condition and Results of Operations.
It is difficult for Kerr to predict whether and when new contracts will be offered for tender because these contracts frequently involve a lengthy and complex design and bidding process, which is affected by a number of factors, such as market conditions, financing arrangements and governmental approvals. Because of these factors, Kerr’s results of operations and cash flows may fluctuate from quarter to quarter and year to year, and the fluctuation may be substantial. Such delays, if they occur, could adversely affect Kerr’s operating results for current and future periods until the affected contracts are completed.
Kerr’s Operating Results May Fluctuate Due to Factors that are Difficult to Forecast and not Within Kerr’s Control.Kerr’s past operating results may not be accurate indicators of future performance. Kerr’s operating results have fluctuated significantly in the past and could fluctuate in the future. Factors that may contribute to fluctuations include: (i) changes in aggregate capital spending, cyclicality and other economic conditions, or domestic and international demand in the industries Kerr serves; (ii) Kerr’s ability to effectively manage its working capital; (iii) Kerr’s ability to satisfy consumer demand in a time and cost-effective manner; (iv) pricing and availability of labor and materials; (v) inability to adjust certain fixed costs and expenses for changes in demand; (vi) shifts in geographic concentration of customers, supplies and labor pools; and (vii) seasonal fluctuations in demand and Kerr’s revenue.
Unanticipated Delays Due to Adverse Weather Conditions, Global Climate Change and Difficult Work Sites and Environments May Slow Completion of Kerr’s Contracts, Impair Its Customer Relationships and Adversely Affect Its Business, Financial Condition and Results of Operations.
Because most of Kerr’s work is performed outdoors, Kerr’s business is impacted by extended periods of inclement weather and is subject to unpredictable weather conditions, which could become more frequent or severe if general climatic changes occur. Generally, inclement weather is more likely to occur during the winter season, which falls during Kerr’s second and third fiscal quarters. Additionally, adverse weather conditions can result in project delays or cancellations, potentially causing Kerr to incur additional unanticipated costs, reductions in revenues or the payment of liquidated damages. In addition, some of Kerr’s contracts require that Kerr assumes the risk that actual site conditions vary from those expected. Significant periods of bad weather typically reduce profitability of affected contracts, both in the current period and during the future life of affected contracts, which can negatively affect its results of operations in current and future periods until the affected contracts are completed.
Some of Kerr’s projects involve procurement and construction phases that may occur over extended time periods. Kerr may encounter delays in designs or materials provided by the customer or a third party, equipment and material delivery delays, schedule changes, delays from customer failure to timely obtain rights-of-way, weather-related delays, delays by subcontractors in completing their portion of the project and other factors, some of which are beyond Kerr’s control, but which may impact its ability to complete a project within the original delivery schedule.
Environmental and Other Regulatory Matters Could Adversely Affect Kerr’s Ability to Conduct Its Business and Could Require Expenditures that Could Adversely Affect Its Business, Financial Condition and Results of Operations.
Kerr’s operations are subject to laws and regulations relating to workplace safety and worker health that, among other things, regulate employee exposure to hazardous substances. While immigration laws require Kerr to take certain steps intended to confirm the legal status of its immigrant labor force, Kerr may nonetheless unknowingly employ illegal immigrants. Violations of laws and regulations could subject Kerr to substantial fines and penalties, cleanup costs, third-party property damage or personal injury claims. In addition, these laws and regulations have become, and enforcement practices and compliance standards are becoming, increasingly stringent. Moreover, Kerr cannot predict the nature, scope or effect of legislation or regulatory requirements that could be imposed, or how existing or future laws or regulations will be administered or interpreted, with respect to products or activities to which it has not been previously applied. Compliance with more stringent laws or regulations, as well as more vigorous enforcement policies of the regulatory agencies, could require Kerr to make substantial expenditures for, among other things, pollution control systems and other equipment that Kerr does not currently possess, or the acquisition or modification of permits applicable to its activities.
If Kerr Fails to Maintain Qualifications Required by Certain Governmental Entities, Kerr Could be Prohibited From Bidding on Certain Contracts.If Kerr does not maintain qualifications required by certain governmental entities, such as low voltage electrical licenses, Kerr could be prohibited from bidding on certain governmental contracts. A cancellation of an unfinished contract or Kerr’s exclusion from the bidding process could cause its work crews to be idled for a significant period of time until other comparable work becomes available, which could adversely affect its business and results of operations. The cancellation of significant contracts or disqualification from bidding for new contracts could reduce Kerr’s revenues and profits and adversely affect its business, financial condition, results of operations and prospects.
Fines, Judgments and Other Consequences Resulting From Kerr’s Failure to Comply With Regulations or Adverse Outcomes in Litigation Proceedings Could Adversely Affect Kerr’s Business, Financial Condition and Results of Operation.
From time to time, Kerr may be involved in lawsuits and regulatory actions, including class action lawsuits that are brought or threatened against it in the ordinary course of business. These actions may seek, among other things, compensation for alleged personal injury, workers’ compensation, violations of the Fair Labor Standards Act and state wage and hour laws, employment discrimination, breach of contract, property damage, punitive damages, civil penalties, and consequential damages or other losses, or injunctive or declaratory relief. Any defects or errors, or failures to meet our customers’ expectations could result in large damage claims against Kerr. Claimants may seek large damage awards and, due to the inherent uncertainties of litigation, Kerr cannot accurately predict the ultimate outcome of any such proceedings. Any failure to properly estimate or manage cost, or delay in the completion of projects, could subject Kerr to penalties.
The ultimate resolution of these matters through settlement, mediation or court judgment could have a material impact on Kerr’s financial condition, results of operations and cash flows. Regardless of the outcome of any litigation, these proceedings could result in substantial cost and may require Kerr to devote substantial resources to defend itself. When appropriate, Kerr establishes reserves for litigation and claims that it believes to be adequate in light of current information, legal advice and professional indemnity insurance coverage, and Kerr adjusts such reserves from time to time according to developments. If Kerr’s reserves are inadequate or insurance coverage proves to be inadequate or unavailable, Kerr’s business, financial condition, results of operations and prospects may suffer.
Kerr Employs and Assigns Personnel in the Workplaces of Other Businesses, Which Subjects Kerr to a Variety of Possible Claims That Could Adversely Affect Kerr’s Business, Financial Condition and Results of Operation.
Kerr employs and assigns personnel in the workplaces of other businesses. The risks of these activities include possible claims relating to: (i) discrimination and harassment; (ii) wrongful termination of denial of employment; (iii) violation of employment rights related to employment screening or privacy issues; (iv) classification of employees, including independent contractors; (v) employment of illegal aliens; (vi) violations of wage and hour requirements; (vii) retroactive entitlement to employee benefits; and (viii) errors and omissions by Kerr’s temporary employees.
Claims relating to any of the above could subject Kerr to monetary fines or reputational damage, which could adversely affect its business, financial condition, results of operations and prospects.
Increases in the Cost of Fuel Could Adversely Affect Kerr’s Business, Financial Condition and Results of Operation.
The price of fuel needed to run Kerr’s vehicles and equipment is unpredictable and fluctuates based on events outside Kerr’s control, including geopolitical developments, supply and demand for oil and gas, actions by the OPEC and other oil and gas producers, war and unrest in oil producing countries, regional production patterns and environmental concerns. Most of Kerr’s contracts do not allow it to adjust our pricing. Accordingly, any increase in fuel costs could adversely affect Kerr’s business, financial condition, results of operations and prospects.
Kerr’s Insurance Coverage May be Inadequate to Cover All Significant Risk Exposures.
Kerr will be exposed to liabilities that are unique to the services it provides. While Kerr intends to maintain insurance for certain risks, the amount of Kerr’s insurance coverage may be inadequate to cover all claims or liabilities, and Kerr may be forced to bear substantial costs resulting from risks and uncertainties of its business. It is also not possible to obtain insurance to protect against all operational risks and liabilities. The failure to obtain adequate insurance coverage on terms favorable to Kerr, or at all, could have a material adverse effect on Kerr’s business, financial condition, results of operations and prospects.
Kerr’s Operations are Subject to Hazards That May Cause Personal Injury or Property Damage Thereby Subjecting Kerr to Liabilities and Possible Losses, Which May Not be Covered by Insurance.Kerr’s workers are subject to hazards associated with providing construction and related services on cell sites. For example, some of the work Kerr performs is underground. If the field location maps supplied to Kerr are not accurate, or if objects are present in the soil that are not indicated on the field location maps, Kerr’s underground work could strike objects in the soil containing pollutants that could result in a rupture and discharge of pollutants. In such a case, Kerr may be liable for fines and damages. These operating hazards can cause personal injury and loss of life, damage to or destruction of property, plant and equipment and environmental damage. Even though Kerr believes that the insurance coverage it maintains is in amounts and against the risks that Kerr believes are consistent with industry practice, this insurance may not be adequate to cover all losses or liabilities that Kerr may incur in its operations. To the extent that Kerr experiences a material increase in the frequency or severity of accidents or workers’ compensation claims, or unfavorable developments on existing claims, its business, financial condition, results of operations and prospects could be adversely affected.
The Occupational Safety and Health Act of 1970, as amended, or OSHA, establishes certain employer responsibilities, including the maintenance of a workplace free of recognized hazards likely to cause death or serious injury, compliance with standards promulgated by the Occupational Health and Safety and Health Administration and various recordkeeping, disclosure and procedural requirements. While Kerr has invested, and will continue to invest, substantial resources in occupational health and safety programs, serious accidents or violations of OSHA rules may subject Kerr to substantial penalties, civil litigation or criminal prosecution, which could adversely affect its business, financial condition, results of operations and prospects.
Defects in Kerr’s Specialty Contracting Services May Give Rise to Claims Against Kerr, Increase Its Expenses or Harm Its Reputation.
Kerr’s specialty contracting services are complex and its final work product may contain defects. Kerr has not historically accrued reserves for potential claims as they have been immaterial. The costs associated with such claims, including any legal proceedings, could adversely affect Kerr’s business, financial condition, results of operations and prospects.
Kerr’s Industry is Highly Competitive With a Variety of Larger Companies With Greater Resources Competing Against Kerr and Its Failure to Compete Effectively Could Reduce the Number of New Contracts Awarded to Kerr or Adversely Affect Kerr’s Market Share and Harm Its Financial Performance..
The contracts on which Kerr bids are generally awarded through a competitive bid process with awards generally being made to the lowest bidder, but sometimes are based on other factors such as shorter contract schedules or prior experience with the customer. Within Kerr’s markets, Kerr competes with many national, regional, local and international service providers. Price is often the principal factor in determining which service provider is selected by its customers, especially on smaller, less complex projects. As a result, any organization with adequate financial resources and access to technical expertise may become a competitor. Smaller competitors are sometimes able to win bids for these projects based on price alone because of their lower costs and financial return requirements. Additionally, Kerr’s competitors may develop the expertise, experience and resources to provide services that are equal or superior in both price and quality to Kerr’s services, and Kerr may not be able to maintain or enhance its competitive position. Kerr also faces competition from the in-house service organizations of its customers whose personnel perform some of the services that Kerr provides.
Some of Kerr’s competitors have already achieved greater market penetration than Kerr has in the markets in which it competes, and some have greater financial and other resources than Kerr does. A number of national companies in Kerr’s industry are larger than Kerr is and, if they so desire, could establish a presence in Kerr’s markets and compete with Kerr for contracts. As a result of this competition, Kerr may need to accept lower contract margins in order to compete against competitors that have the ability to accept awards at lower prices or have a pre-existing relationship with a customer. If Kerr is unable to compete successfully in its markets, its business, financial condition, results of operations and prospects could be adversely affected.
Many of the Industries Kerr Serves are Subject to Consolidation and Rapid Technological and Regulatory Change and Kerr’s Inability or Failure to Adjust to Its Customers’ Changing Needs Could Reduce Demand for Its Services.
Kerr will continue to derive a substantial portion of its revenue from customers in the telecommunications and utilities industries. The telecommunications and utilities industries are subject to rapid changes in technology and governmental regulation. Changes in technology may reduce the demand for the services Kerr provides. For example, new or developing technologies could displace the wire line systems used for the transmission of voice, video and data, and improvements in existing technology may allow telecommunications providers to significantly improve their networks without physically upgrading them. Alternatively, Kerr’s customers could perform more tasks themselves, which would cause Kerr’s business to suffer. Additionally, the telecommunications and utilities industries have been characterized by a high level of consolidation that may result in the loss of one or more of Kerr’s customers. Kerr’s failure to rapidly adopt and master new technologies as they are developed in any of the industries Kerr serves or the consolidation of one or more of its significant customers could adversely affect its business, financial condition, results of operations and prospects.
Further, many of Kerr’s telecommunications customers are regulated by the Federal Communications Commission, or the FCC, and other international regulators. The FCC and other regulators may interpret the application of their regulations in a manner that is different than the way such regulations are currently interpreted and may impose additional regulations, either of which could reduce demand for Kerr’s services and adversely affect its business and results of operations.
Economic Downturns Could Cause Capital Expenditures in the Industries Kerr Serves to Decrease, Which May Adversely Affect Kerr’s Business, Financial Condition and Results of Operation.
The demand for Kerr’s services has been and will likely continue to be cyclical in nature and vulnerable to general downturns in the United States economy. The United States economy is still recovering from a recession, and growth in United States economic activity has remained slow. It is uncertain when these conditions will significantly improve. The wireless telecommunications industry is particularly cyclical in nature and vulnerable to general downturns in the United States and international economies. Kerr’s customers are affected by economic changes that decrease the need for or the profitability of their services. This can result in a decrease in the demand for Kerr’s services and potentially result in the delay or cancellation of projects by its customers. Slow-downs in real estate, fluctuations in commodity prices and decreased demand by end-customers for services could affect Kerr’s customers and their capital expenditure plans. As a result, some of Kerr’s customers may opt to defer or cancel pending projects. A downturn in overall economic conditions also affects the priorities placed on various projects funded by governmental entities and federal, state and local spending levels.
In general, economic uncertainty makes it difficult to estimate Kerr’s customer requirements for its services. Kerr’s plan for growth depends on expanding both in the United States and internationally. If economic factors in any of the regions in which Kerr plans to expand are not favorable to the growth and development of the telecommunications industries in those countries, Kerr may not be able to carry out our growth strategy, which could adversely affect its business, financial condition, results of operations and prospects.
RISKS RELATED TO OUR COMMON STOCK.
Investors Should Not Look to Dividends as a Source of Income.
In the interest of reinvesting initial profits back into our business, we do not intend to pay cash dividends in the foreseeable future. Consequently, any economic return will initially be derived, if at all, from appreciation in the fair market value of our stock, and not as a result of dividend payments.
The Trading Price of Our Common Stock on the OTC Bulletin Board Will Fluctuate Significantly and Stockholders May Have Difficulty Reselling Their Shares.
As of the date of this Annual Report, our common stock trades on the Over-the-Counter Bulletin Board. There is a volatility associated with Bulletin Board securities in general and the value of your investment could decline due to the impact of any of the following factors upon the market price of our common stock: (i) disappointing results from our exploration or development efforts; (ii) failure to meet our revenue or profit goals or operating budget; (iii) decline in demand for our common stock; (iv) downward revisions in securities analysts' estimates or changes in general market conditions; (v) technological innovations by competitors or in competing technologies; (vi) lack of funding generated for operations; (vii) investor perception of our industry or our prospects; (viii) general economic trends; and ix) Commodity price fluctuation
In addition, stock markets have experienced price and volume fluctuations and the market prices of securities have been highly volatile. These fluctuations are often unrelated to operating performance and may adversely affect the market price of our common stock. As a result, investors may be unable to sell their shares at a fair price and you may lose all or part of your investment.
Additional Issuance of Equity Securities May Result in Dilution to Our Existing Stockholders.
Our Articles of Incorporation, as amended, authorize the issuance of 150,000,000 shares of common stock. The Board of Directors has the authority to issue additional shares of our capital stock to provide additional financing in the future, including issuances in accordance with contractual terms, and the issuance of any such shares may result in a reduction of the book value or market price of the then outstanding shares of our common stock. If we do issue any such additional shares, such issuance also will cause a reduction in the proportionate ownership and voting power of all other stockholders. As a result of such dilution, your proportionate ownership interest and voting power will be decreased accordingly. Further, any such issuance could result in a change of control.
Because We May be Subject to the “Penny Stock” Rules, the Level of Trading Activity in our Stock May be Reduced, Which May Make it Difficult for Investors to Sell Their Shares.
Broker-dealer practices in connection with transactions in “penny stocks” are regulated by certain penny stock rules adopted by the Securities and Exchange Commission. Penny stocks, like shares of our common stock, generally are equity securities with a price of less than $5.00, other than securities registered on certain national securities exchanges or quoted on NASDAQ. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, and, if the broker-dealer is the sole market maker, the broker-dealer must disclose this fact and the broker-dealer’s presumed control over the market, and monthly account statements showing the market value of each penny stock held in the customer’s account. In addition, broker-dealers who sell these securities to persons other than established customers and “accredited investors” must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. Consequently, these requirements may have the effect of reducing the level of trading activity, if any, in the secondary market for a security subject to the penny stock rules, and investors in our common stock may find it difficult to sell their shares.
Nevada Law and our Articles of Incorporation May Protect our Directors From Certain Types of Lawsuits.
Nevada law provides that our officers and directors will not be liable to us or our stockholders for monetary damages for all but certain types of conduct as officers and directors. Our Bylaws permit us broad indemnification powers to all persons against all damages incurred in connection with our business to the fullest extent provided or allowed by law. The exculpation provisions may have the effect of preventing stockholders from recovering damages against our officers and directors caused by their negligence, poor judgment or other circumstances. The indemnification provisions may require us to use our limited assets to defend our officers and directors against claims, including claims arising out of their negligence, poor judgment, or other circumstances.
Our executive, administrative and operating offices are located at 1800 NE 1147301 NW 4th Street Suite 2110, Miami, Florida 33181.102, Plantation FL 33317. We are not currently under lease with regards to the offices. We believe that our facilities are adequate for our needs and that additional suitable space will be available on acceptable terms as required.
As of the date of this Annual Report, management is not aware of any legal proceedings contemplated by any governmental authority or any other party involving us or our properties. As of the date of this Annual Report, no director, officer or affiliate is (i) a party adverse to us in any legal proceeding, or (ii) has an adverse interest to us in any legal proceedings. Management is not aware of any other legal proceedings pending or that have been threatened against us or our properties.
Our common stock is listed for quotation on the Over-the-Counter Bulletin Board and OTCQB under the symbol “TRXA.” The following table sets forth the high and low bid prices relating to our common stock on a quarterly basis for the periods indicated as quoted by the NASDAQ OTC:BB stock market. These quotations reflect inter-dealer prices without retail mark-up, mark-down, or commissions, and may not reflect actual transactions.
| Quarter Ended | | High Bid | | | Low Bid | |
| June 30, 2014 | | $ | 0.59 | | | $ | 0.59 | |
| March 31, 2014 | | $ | 0.70 | | | $ | 0.70 | |
| December 31, 2013 | | $ | 0.0013 | | | $ | 0.0013 | |
| September 30, 2013 | | $ | 0.007 | | | $ | 0.0007 | |
| June 30, 2013 | | $ | 0.0023 | | | $ | 0.0023 | |
| March 31, 2013 | | $ | 0.0014 | | | $ | 0.0014 | |
| December 31, 2012 | | $ | 0.0012 | | | $ | 0.0012 | |
| September 30, 2012 | | $ | 0.0021 | | | $ | 0.0021 | |
Quarter Ended | | High Bid | | | Low Bid | |
June 30, 2019 | | | 1.0 | | | | 1.0 | |
March 31, 2019 | | | .57 | | | | .57 | |
December 31, 2018 | | | .57 | | | | .57 | |
September 30, 2018 | | | 1.35 | | | | 1.20 | |
June 30, 2018 | | | .10 | | | | .07 | |
March 31, 2018 | | | .10 | | | | .07 | |
December 31, 2017 | | | .10 | | | | .07 | |
September 30, 2017 | | | .10 | | | | .07 | |
HOLDERS
The approximateAs of June 30, 2019, the number of stockholders of record at the date of this Annual Report is 35. The number of stockholders of record does not include beneficial owners of our common stock, whose shares are held in the names of various dealers, clearing agencies, banks, brokers and other fiduciaries.
We have never declared or paid a cash dividend on our capital stock. We do not expect to pay cash dividends on our common stock in the foreseeable future. We currently intend to retain our earnings, if any, for use in our business. Any dividends declared in the future will be at the discretion of our Board of Directors.
RECENT SALES OF UNREGISTREEDUNREGISTERED SECURITIES
During fiscal year ended June 30, 2014 and to date, we2019, the Company did not issuedissue any shares of common stock other than shares issued forrelated to the previously described private placement and Consulting Agreements or the debt conversion as discussed below.
During 2010, we had received monies from Boardwalk Business Developments Inc. ("Boardwalk"(“Boardwalk”) pursuant to an operating loan and other advances made by Boardwalk to us. Therefore, we evidenced the monies loaned by that certain convertible debenture dated June 30, 2010 (the "Convertible Debenture"“Convertible Debenture”), which Convertible Debenture was and has been evidenced on our audited financial statements. Subsequently, Boardwalk and certain assignees (collectively, the "Assignees"“Assignees”) entered into those certain assignments of convertible debenture dated July 15, 2012 (the "Assignments"“Assignments”) pursuant to which Boardwalk assigned and transferred to each of the Assignees a portion of its right, title and interest in and to the Debenture for payment of consideration from each of $8,000. The Assignees further assigned portions of their respective debt to others for consideration. We received those certain conversion notices dated September 21, 2014 from certain of the Assignees and others (collectively, the “Conversion Notices”) and desired to settle the debt evidenced by the Convertible Debenture in the aggregate amount of $691,926.00 by conversion into an aggregate post-Reverse Stock Split 1,835,834 shares of our restricted common stock at $0.3769 (which conversion price was changed based on the 1:1000 reverse stock split). Therefore, effective on September 21, 2014, our Board of Directors approved the issuance of an aggregate 1,835,834 shares of our restricted common stock to the Assignees and others in accordance with the terms and provisions of the respective Notices of Conversion. The shares of common stock were issued at $0.3769 per share. The shares of common stock were issued to United States residents in reliance on Section 4(2) promulgated under the United States Securities Act of 1933, as amended (the “Securities Act”). The securities have not been registered under the Securities Act or under any state securities laws and may not be offered or sold without registration with the United States Securities and Exchange Commission or an applicable exemption from the registration requirements. The Assignees and others acknowledged that the securities to be issued have not been registered under the Securities Act, that they understood the economic risk of an investment in the securities, and that they had the opportunity to ask questions of and receive answers from our management concerning any and all matters related to acquisition of the securities.
TheOn May 14, 2014, the company entered into a subscription agreement for 157,500 units at $.80 per share for a total of $125,000. Each unit consists of 1 share of common stock and one Series A warrant to purchase one share of common stock at $1.25 per share. Each A warrant expires three years from the date of issuance. These shares are currently beingunissued and accounted for in the shares to be issued on June 30, 2019.
On May 14, 2014, the company entered into a subscription agreement for 32,000 units at $.80 per share for a total of $25,000. Each unit consists of 1 share of common stock and one series A warrant to purchase one share of common stock at $1.25 per share. Each A warrant expires three years from the date of issuance. These shares are unissued and accounted for in the shares to be issued on June 30, 2019.
On July 14, 2014, the company entered into a subscription agreement for 62,500 units at $.80 per share for a total of $50,000. Each unit consists of 1 share of common stock, two series A warrants for each to purchase one share of common stock at $.65 per share and one series B warrant to purchase one share of common stock at $.80. Each series A warrant expires three years from the date of issuance and each series B warrant expires 5 years from the date of issuance. These shares are unissued and accounted for in the shares to be issued on June 30, 2019.
On September 21, 2015 Boardwalk assignees agreed to convert $691,927 in related party debt into 1,835,835 shares of the company’s common Stock.
On January 1, 2015, the company entered into a management agreement for a period of 5 years and will issue 350,000 shares of its common stock as consideration and is accounted for on the balance sheet as shares to be issued and will be expensed over the life of the contract (5 years), which resulted in a prepaid consulting expense of $210,000. They were valued on the date of the agreement and the stock price at that time was $.60.
These shares were issued on January 21, 2020, but accounted for in the shares to be issued on June 30, 2019.
On January 1, 2015, the company entered into a management agreement for a period of 2 years and will issue 100,000 shares of its common stock as consideration and is accounted for on the balance sheet as shares to be issued and will be expensed over the life of the contract (2 years), which resulted in a prepaid consulting expense of $60,000. They were valued on the date of the agreement and the stock price at that time was $.60. These shares are deemedunissued and accounted for in the shares to be issued on June 30, 2019.
No new shares have been issued as of September 21, 2014.June 30, 2019. No Assignee or other subsequent assignee holds in the aggregate shares exceeding 4.99% of the total issued and outstanding shares of common stock.
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS.
As of June 30, 2014,2019, we had no equity compensation plans under which authorized an issuance of our equity securities were authorized for issuance.
securities.PENNY STOCK REGULATION
Shares of our common stock will probably be subject to rules adopted the SEC that regulate broker-dealer practices in connection with transactions in “penny stocks.” Penny stocks are generally equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in those securities is provided by the exchange or system). The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from those rules, deliver a standardized risk disclosure document prepared by the SEC, which contains the following:
· | a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading; |
· | a description of the broker’s or dealer’s duties to the customer and of the rights and remedies available to the customer with respect to violation to such duties or other requirements of securities’ laws; |
· | a brief, clear, narrative description of a dealer market, including “bid” and “ask” prices for penny stocks and the significance of the spread between the “bid” and “ask” price; |
· | a toll-free telephone number for inquiries on disciplinary actions; |
· | definitions of significant terms in the disclosure document or in the conduct of trading in penny stocks; and |
· | such other information and is in such form (including language, type, size and format), as the SEC shall require by rule or regulation. |
Prior to effecting any transaction in penny stock, the broker-dealer also must provide the customer the following:
· | the bid and offer quotations for the penny stock; |
· | the compensation of the broker-dealer and its salesperson in the transaction; |
· | the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and |
· | monthly account statements showing the market value of each penny stock held in the customer’s account. |
In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written acknowledgment of the receipt of a risk disclosure statement, a written agreement to transactions involving penny stocks, and a signed and dated copy of a written suitability statement. These disclosure requirements may have the effect of reducing the trading activity in the secondary market for a stock that becomes subject to the penny stock rules. Holders of shares of our common stock may have difficulty selling those shares because our common stock will probably be subject to the penny stock rules.
The stock transfer agent for our securities is Corporate Stock Transfer, 3200 Cherry Creek South Drive, Denver, Colorado 80209.
ITEM 6. SELECTED FINANCIAL DATA
Not applicable.
The following discussion of our financial condition and results of operations should be read in conjunction with our financial statements for the years ended June 30, 20142019 and June 30, 20132018 together with notes thereto as included in this Annual Report on Form 10-K. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward lookingforward-looking statements. Factors that could cause or contribute to such differences include but are not limited to those discussed below and elsewhere in this Annual Report, particularly in the section entitled "Risk“Risk Factors."” Our audited financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.
We are a developmentaldevelopment stage company since we have no current operations, are currently pursuing options to find suitable merger candidates and have not generated any significant revenue to date. We have incurred recurring losses to date. Our financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation.
We expect we will require additional capital to meet our long termlong-term operating requirements. We expect to raise additional capital through, among other things, the sale of equity or debt securities.
Fiscal Year Ended June 30, 20142019 Compared to Fiscal Year Ended June 30, 2013
2018Our net loss for fiscalthe year ended June 30, 20142019 was ($37,637)107,342) compared to a net profitloss of $466,759($149,076) during fiscalthe year ended June 30, 2013, an increase2018. The decrease in the net loss of $429,122.was mainly due to the loss from the failed merger in 2018. During fiscalthe years ended June 30, 20142019 and June 30, 2013,2018, we did not generate any revenue.
During fiscalthe year ended June 30, 2014,2019, we incurred operating expenses of $37,637$104,650 compared to $49,486$98,880 incurred during fiscalthe year ended June 30, 2013, a decrease of $11,849. 2018. The increase in operating expenses was mainly due to the increase in filing fees.
During fiscalthe year ended June 30, 2014, operating2019, we incurred interest expenses consisted of: (i) $14,736 in transfer agent fees (2013: $-0-); (ii) $18,795 in professional fees (2013: $-0-); and (iii) $4,106 in general and administrative (2013: $49,486). General and administrative expenses generally include corporate overhead, financial and administrative contracted services, marketing, and consulting costs. The decrease in operating expenses was primarily attributableof $2,692, compared to the decrease in general and administrative of $45,380.
We did not incur any management fees to our officers and directors$2,696 incurred during
fiscalthe year ended June 30,
20142018.On January 1, 2015, the company entered into a management agreement with Mr. Horkey for a period of 5 years and June 30, 2013. "Item 11. Executive Compensation”.
During fiscalwill issue 350,000 shares of its common stock as consideration and is accounted for on the balance sheet as shares to be issued and will be expensed over the life of the contract (5 years), which resulted in a prepaid consulting expense of $210,000. For the year ended June 30, 2013,2019, we incurred net income of $516,245 compared to $-0- incurred during fiscal year ended June 30, 2014 realized fromexpensed $42,000 in consulting expense for Mr. Horkey They were valued on the write-off of assets and liabilitiesdate of the subsidiaries. This resulted in a net loss of ($37,637) incurred during fiscal year ended June 30, 2014 compared to net income of $466,759 incurred during fiscal year ended June 30, 2013.
During fiscal year ended June 30, 2013, we also recognized a provision for income taxes of $158,637, which we incurred as a carryback loss resulting in a net of $-0-, compared to $-0- for fiscal year ended June 30, 2014.
Therefore, our net lossagreement and loss per share during fiscal year ended June 30, 2014the stock price at that time was ($37,637) or ($0.37) per share compared to a net profit and profit per share during fiscal year ended June 30, 2013 of $466,759 or 4.53 per share. The weighted average number of shares outstanding was 103,073 for both fiscal years ended June 30, 2014 and June 30, 2013.
$.60.LIQUIDITY AND CAPITAL RESOURCES
Fiscal Year Ended June 30, 2014
2019As of June 30, 2014,2019, our current assets were $63$0 and our current liabilities were $691,923,$410,268, which resulted in a working capital deficit of $691,860. $410,268.
As of June 30, 2014, current assets were comprised of $63 in cash and cash equivalents. As of June 30, 2014, current liabilities were comprised of $691,923 due to related party.
As of June 30, 2014, our total assets were $63. The increase in assets from fiscal year ended June 30, 2013 was due to the increase in cash and cash equivalents.
As of June 30, 2014,2019, our total liabilities were $691,923$410,268 comprised entirely of current liabilities. The increase in liabilities during fiscalthe year ended June 30, 20142019 from fiscalthe year ended June 30, 20132018 was primarily due to the increase in amounts due to other related parties.
Stockholders’ deficit increasedparties and Management Fees.Cash Flows from ($654,223) for fiscalOperating Activities
For the year ended June 30, 2013 to ($691,860) for fiscal year ended June 30, 2014.
Cash Flows from Operating Activities
We have not generated positive cash flows from operating activities. For fiscal year ended June 30, 2014,2019, net cash flows used in operating activities was
$63. Net$(0) compared to net cash
flows used in operating
activities during fiscalactivity of $0 for the same period in 2018.Cash Flows from Investing Activities
For the year ended June 30, 2014 consisted primarily of a net loss of ($37,637), which was adjusted by an increase of $37,700 due to related parties. For fiscal year ended June 30, 2013, net cash flows used in operating activities was $--0-. Net cash flows used in operating activities during fiscal year ended June 30, 2013 consisted primarily of $466,759 in net profit, which was adjusted by an increase of $49,486 due to related parties and a decrease of ($516,245) in accrued expenses.
Cash Flows from Investing Activities
For fiscal years ended June 30, 20142019 and June 30, 2013,2018, net cash flows used in investing activities was $0.
Cash Flows from Financing Activities
For fiscal yearsthe year ended June 30, 2014 and June 30, 2013,2019, net cash flows used infrom financing activities were $0. For the year ended June 30, 2018, net cash flows provided by financing activities was $-0-.
$0.PLAN OF OPERATION AND FUNDING
We expect that working capital requirements will continue to be funded through a combination of our existing fundsproceeds from the sales of stock and generation of revenues.revenues from acquisitions. Our working capital requirements are expected to increase in line with the growth of our business.
Our principal demands for liquidity are to increase business operations and for general corporate purposes. We intend to meet our liquidity requirements, including capital expenditures related to future business operations, and the expansion of our business, through cash flow provided by funds raised through proceeds from the issuance of debt or equity.
As of June 30, 2014, we havehad a convertible debenturenote payable dated June 30, 2010 in the principal amount of $1,253,095$1,253,095. As of which $603,095March 31, 2016, this note has been either converted to stock or paid. The convertible debenturenote payable accrues interest at the rate of 5% per annum, and is convertible into shares of our common stock athowever that interest has been forgiven each year by the rate of $0.001 per share.note holders. As of September 21, 2014, the convertible debenturenote payable balance of $691,926 ($650,000 at June 30, 2013 plus additional advances of $41,926 for the year ended June 30, 2014) has been converted into shares of common stock. See "Item“Item 5.
PURCHASE OF SIGNIFICANT
EQUIPMENT
We do not intend to purchase any significant equipment during the next twelve months.
OFF-BALANCE SHEET ARRANGEMENTS
As of the date of this Annual Report, we do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
RESULTS OF OPERATION
Quarter Ended September 30, 2018 Compared to Quarter Ended September 30, 2017
Our net loss for the quarter ended September 30, 2018 was ($26,863) compared to a net loss of ($27,064) during the quarter ended September 30, 2017.
During the quarter ended September 30, 2018, we incurred operating expenses of $26,199 compared to $26,390 incurred during the quarter ended September 30, 2017. The decrease in expenses was mainly due to an decrease in transfer agent fees and a decrease in the amortization of the prepaid consulting.
On January 1, 2015, the company entered into a management agreement with Mr. Horkey for a period of 5 years and will issue 350,000 shares of its common stock as consideration and is accounted for on the balance sheet as shares to be issued and will be expensed over the life of the contract (5 years), which resulted in a prepaid consulting expense of $210,000. For the three months ended September 30, 2018, we expensed $10,500 in consulting expense for Mr. Horkey. They were valued on the date of the agreement and the stock price at that time was $.60.
During the quarter ended September 30, 2019, we incurred interest expenses of $664 compared to $674 incurred during the quarter ended September 30, 2018.
LIQUIDITY AND CAPITAL RESOURCES
Quarter Ended September 30, 2018
As of September 30, 2018, our current assets were $0 and our current liabilities were $361,289, which resulted in a working capital deficit of $361,289.
As of September 30, 2018, and 2017, our total liabilities were comprised entirely of current liabilities.
Cash Flows from Operating Activities
For the three months ended September 30, 2018, net cash flows used in operating activities was $0 compared to net cash used in operating activity of $0 for the same period in 2017.
Cash Flows from Investing Activities
For the three months ended September 30, 2018 and September 30, 2017, net cash flows used in investing activities was $0.
Cash Flows from Financing Activities
For the three months ended September 30, 2018 and 2017, net cash flows from financing activities was $0.
PLAN OF OPERATION AND FUNDING
We expect that working capital requirements will continue to be funded through a combination of our proceeds from the sales of stock and generation of revenues from acquisitions. Our working capital requirements are expected to increase in line with the growth of our business.
Our principal demands for liquidity are to increase business operations and for general corporate purposes. We intend to meet our liquidity requirements, including capital expenditures related to future business operations, and the expansion of our business, through cash flow provided by funds raised through proceeds from the issuance of debt or equity.
MATERIAL COMMITMENTS
Convertible Debenture
As of March 31, 2014, we have a note payable dated June 30, 2010 in the principal amount of $1,253,095 of which As of September 30, 2016 this note has been either converted to stock or paid in full. The note payable accrued interest at the rate of 5% per annum, however that interest has been forgiven each year by the note holders. As of September 14, 2014, the amounts due to related parties on convertible notes was $0. The Board of Directors approved convert $691,926 of these related party notes payable, however as of September 30, 2018, the Shares have yet to be issued.
PURCHASE OF SIGNIFICANT EQUIPMENT
We do not intend to purchase any significant equipment during the next twelve months.
OFF-BALANCE SHEET ARRANGEMENTS
As of the date of this Quarterly Report, we do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
RESULTS OF OPERATION
Quarter Ended December 31, 2018 Compared to Quarter Ended December 31, 2017
Our net loss for the quarter ended December 31, 2018 was ($27,112) compared to a net loss of ($27,128) during the quarter ended December 31, 2017.
During the quarter ended December 31, 2018, we incurred operating expenses of $26,438 compared to $26,454 incurred during the quarter ended December 31, 2017. The decrease in expenses was mainly due to a decrease in transfer agent fees.
During the quarter ended December 31, 2018, we incurred interest expenses of $674 compared to $674 incurred during the quarter ended December 31, 2017.
Six Months Ended December 31, 2018 Compared to Six Months Ended December 31, 2017
Our net loss for the six months ended December 31, 2018 was ($53,975) compared to a net loss of ($54,192) during the six months ended December 31, 2017. The decrease in net loss was mainly due to the decrease in filing fees.
During the six months ended December 31, 2018, we incurred operating expenses of $52,637 compared to $52,844 incurred during the six months ended December 31, 2017. The decrease in expenses was mainly due to a decrease in transfer agent fees.
On January 1, 2015, the company entered into a management agreement with Mr. Horkey for a period of 5 years and will issue 350,000 shares of its common stock as consideration and is accounted for on the balance sheet as shares to be issued and will be expensed over the life of the contract (5 years), which resulted in a prepaid consulting expense of $210,000. For the six months ended December 31, 2018, we expensed $21,000 in consulting expense for Mr. Horkey They were valued on the date of the agreement and the stock price at that time was $.60.
During the six months ended December 31, 2018, we incurred interest expenses of $1,338 compared to $1,348 incurred during the six months ended December 31, 2017.
LIQUIDITY AND CAPITAL RESOURCES
Six Months Ended December 31, 2018
As of December 31, 2018, our current assets were $0 and our current liabilities were $377,901, which resulted in a working capital deficit of $377,901.
As of December 31, 2018, and June 30, 2018 our total liabilities were entirely of current liabilities.
Cash Flows from Operating Activities
For the six months ended December 31, 2018, net cash flows used in operating activities was $0 compared to net cash used in operating activity of $0 for the same period in 2017.
Cash Flows from Investing Activities
For the six months ended December 31, 2018 and December 31, 2017, net cash flows used in investing activities was $0.
Cash Flows from Financing Activities
For the six months ended December 31, 2018 and 2017, net cash flows from financing activities were $0 and $0 respectively.
PLAN OF OPERATION AND FUNDING
We expect that working capital requirements will continue to be funded through a combination of our proceeds from the sales of stock and generation of revenues from acquisitions. Our working capital requirements are expected to increase in line with the growth of our business.
Our principal demands for liquidity are to increase business operations and for general corporate purposes. We intend to meet our liquidity requirements, including capital expenditures related to future business operations, and the expansion of our business, through cash flow provided by funds raised through proceeds from the issuance of debt or equity.
MATERIAL COMMITMENTS
Convertible Debenture
As of March 31, 2014, we have a note payable dated June 30, 2010 in the principal amount of $1,253,095 of which As of December 31, 2017 this note has been either converted to stock or paid in full. The note payable accrued interest at the rate of 5% per annum, however that interest has been forgiven each year by the note holders. As of September 14, 2014, the amounts due to related parties on convertible notes was $0. The Board of Directors approved convert $691,926 of these related party notes payable, however as of June 30, 2019, the Shares have yet to be issued.
PURCHASE OF SIGNIFICANT EQUIPMENT
We do not intend to purchase any significant equipment during the next twelve months.
OFF-BALANCE SHEET ARRANGEMENTS
As of the date of this Quarterly Report, we do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
RESULTS OF OPERATION
Quarter Ended March 31, 2019 Compared to Quarter Ended March 31, 2018
Our net loss for the quarter ended March 31, 2019 was ($26,767) compared to a net loss of ($27,180) during the quarter ended March 31, 2018. During the quarters ended March 31, 2019 and March 31, 2018, we did not generate any revenue.
During the quarter ended March 31, 2019, we incurred operating expenses of $26,093 compared to $26,506 incurred during the quarter ended March 31, 2018. The decrease in expenses was mainly due to the increase in filing fees.
During the quarter ended March 31, 2019, we incurred interest expenses of $674 compared to $674 incurred during the quarter ended March 31, 2018.
Nine months Ended March 31, 2019 Compared to Nine months Ended March 31, 2018
Our net loss for the nine months ended March 31, 2019 was ($80,743) compared to a net loss of ($81,372) during the nine months ended March 31, 2018. During the nine months ended March 31, 2019 and March 31, 2018, we did not generate any revenue.
During the nine months ended March 31, 2019, we incurred operating expenses of $78,731 compared to $79,350 incurred during the nine months ended March 31, 2018. The decrease in expenses was mainly due to the decrease in filing fees.
On January 1, 2015, the company entered into a management agreement with Mr. Horkey for a period of 5 years and will issue 350,000 shares of its common stock as consideration and is accounted for on the balance sheet as shares to be issued and will be expensed over the life of the contract (5 years), which resulted in a prepaid consulting expense of $210,000. For the nine months ended March 31, 2019, we expensed $31,500 in consulting expense for Mr. Horkey They were valued on the date of the agreement and the stock price at that time was $.60.
During the nine months ended March 31, 2019, we incurred interest expenses of $2,012 compared to $2,022 incurred during the nine months ended March 31, 2018.
LIQUIDITY AND CAPITAL RESOURCES
Nine months Ended March 31, 2019
As of March 31, 2019, our current assets were $0 and our current liabilities were $394,168, which resulted in a working capital deficit of $394,168.
As of March 31, 2019 and June 30, 2018, our total liabilities were comprised entirely of current liabilities.
Cash Flows from Operating Activities
For the nine months ended March 31, 2019, net cash flows used in operating activities was $0 compared to net cash used in operating activity of $0 for the same period in 2018.
Cash Flows from Investing Activities
For the nine months ended March 31, 2019 and March 31, 2018, net cash flows used in investing activities was $0.
Cash Flows from Financing Activities
For the nine months ended March 31, 2019, net cash flows from financing activities was $0. For the nine months ended March 31, 2018 net cash flows used in financing activities was $0.
PLAN OF OPERATION AND FUNDING
We expect that working capital requirements will continue to be funded through a combination of our proceeds from the sales of stock and generation of revenues from acquisitions. Our working capital requirements are expected to increase in line with the growth of our business.
Our principal demands for liquidity are to increase business operations and for general corporate purposes. We intend to meet our liquidity requirements, including capital expenditures related to future business operations, and the expansion of our business, through cash flow provided by funds raised through proceeds from the issuance of debt or equity.
MATERIAL COMMITMENTS
Convertible Debenture
As of March 31, 2019, we have a note payable dated June 30, 2010 in the principal amount of $1,253,095. As of March 31, 2017, this note has been either converted to stock or paid. The note payable accrues interest at the rate of 5% per annum, however that interest has been forgiven each year by the note holders. As of September 14, 2014, the amounts due to related parties on convertible notes was $0. The Board of Directors approved convert $691,926 of these related party notes payable, however as of March 31, 2017, the Shares have yet to be issued.
PURCHASE OF SIGNIFICANT EQUIPMENT
We do not intend to purchase any significant equipment during the next twelve months.
GOING CONCERN
The independent auditors'auditors’ report accompanying our June 30, 20142019 and June 30, 20132018 financial statements contains an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern. The financial statements have been prepared "assuming“assuming that we will continue as a going concern,"” which contemplates that we will realize our assets and satisfy our liabilities and commitments in the ordinary course of business. We have suffered recurring losses from operations and have a working capital deficit and are currently in default of the payment terms of certain note agreements.deficit. These factors raise substantial doubt about our ability to continue as a going concern.
RECENTLY ISSUED ACCOUNTING STANDARDS
The following describes the recently issued accounting standards used in reporting our financial condition and results of operations. In some cases, accounting standards allow more than one alternative accounting method for reporting. Such is the case with accounting for oil and gas activities described below. In those cases, our reported results of operations would be different should we employ an alternative accounting method.
ASU 2010-06, Fair Value Measurements and Disclosures (Topic 820) – Improving Disclosures about Fair Value Measurements.
This ASU affects all entities that are required to make disclosures about recurring and nonrecurring fair value measurements under FASB ASC Topic 820, originally issued as FASB Statement No. 157, Fair Value Measurements. The ASU requires certain new disclosures and clarifies two existing disclosure requirements. The new disclosures and clarifications of existing disclosures are effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosures about purchases, sales, issuances, and settlements in the roll forward of activity in Level 3 fair value measurements. Those disclosures are effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years.
This ASU supersedes most of the guidance in Topic 820, although many of the changes are clarifications of existing guidance or wording changes to align with IFRS 13. In addition, certain amendments in ASU 2011-04 change a particular principle or requirement for measuring fair value or disclosing information about fair value measurements. The amendments in ASU 2011-04 are effective for public entities for interim and annual periods beginning after December 15, 2011
Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying consolidated financial statements.
OFF-BALANCE SHEET ARRANGMENTS.
We have no off-balance sheet arrangements.
IITEMITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements required by Item 8 are presented in the following order:
To Thethe Board of Directors and shareholdersStockholders of
Trex AcquisitionAcquisitions Corp.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Trex AcqusitionAcquisitions Corp. (the “Company”(“the Company”) as of June 30, 20142019 and 2018, and the related consolidated statements of operations, stockholders’ deficitchanges in shareholders’ equity, and cash flows for the yearyears then ended.
Management’s Responsibility forended, and the Financial Statements
Management is responsible forrelated notes (collectively referred to as the
preparation and fair presentation of thesefinancial statements). In our opinion, the financial statements
present fairly, in
accordanceall material respects, the financial position of the Company as of June 30, 2019 and 2018, and the results of its operations and its cash flows for each of the years in the two-year period then ended, in conformity with accounting principles generally accepted in the United
StateStates of
America; this includesAmerica.Going Concern
The accompanying financial statements have been prepared assuming that the design, implementation and maintenance of internal control relevantCompany will continue as a going concern. As discussed in Note 3 to the preparation and fair presentation of financial statements, the Company has not commenced operations or generated revenue to date. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
the responsibility of the Company’s management. Our responsibility is to express an opinion on
these consolidatedthe Company’s financial statements based on
my audits.Weour 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 standards of the Public Company Accounting Oversight Board (United States).PCAOB. Those standards require that we plan and perform the auditaudits to obtain reasonable assurance about whether the financial statements are free of material misstatement.misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, included considerationwe are required to obtain an understanding of internal control over financial reporting, as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes
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 supportingregarding the amounts and disclosures in the financial statements. An auditOur audits also includes assessingincluded evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statement presentation.statements. We believe that our audits provide a reasonable basis for our opinion.
Opinion
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of June 30, 2014 and the results of its operations and its cash flows for the year ended June 30, 2014, in conformity with accounting principles generally accepted in the United States of America.
Emphasis of Matter
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As described in Note 3 of the accompanying financial statements, the Company has a significant accumulated deficit and no cash to for payment of ongoing operating expenses, which raises substantial doubt about its ability to continue as a going concern. Management’s plans in regard to this matter are described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ Terry L. Johnson, CPA
Casselberry, Florida
September 26,2014
GEORGE STEWART, CPA
316 17TH AVENUE SOUTH
SEATTLE, WASHINGTON 98144
(206) 328-8554 FAX(206) 328-0383
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors
Sync2 Networks Corp.
I have audited the accompanying balance sheets of Sync2 Networks Corp. (A Development Stage Company) as of June 30, 2013 and 2012, and the related statements of operations, stockholders’ equity and cash flows for the years ended June 30, 2013 and 2012 and for the period from January 16, 2008 (inception), to June 30, 2013. These financial statements are the responsibility of the Company’s management. My responsibility is to express an opinion on these financial statements based on my audit.
I conducted my audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that I 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. I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Sync2 Networks Corp., (A Development Stage Company) as of June 30, 2013 and 2012, and the results of its operations and cash flows for the years ended June 30, 2013 and 2012 and the period from January 16, 2008 (inception), to June 30, 2013 in conformity with generally accepted accounting principles in the United States of America.
The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note # 3 to the financial statements, the Company has had no operations and has no established source of revenue. This raises substantial doubt about its ability to continue as a going concern. Management’s plan in regard to these matters is also described in Note # 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ George Stewart
Seattle, Washington
September 25, 2013
September 29, 2014
TREX ACQUSITION CORP.
(FORMERLY SYNC2 NETWORKS CORP.)
(A Development Stage Company)
CONSOLIDATED BALANCE SHEETS
| | | June 30, 2014 | | | June 30, 2013 | |
| Assets: | | | | | | |
| Current assets | | | | | | |
| Cash and cash equivalents | | $ | 63 | | | $ | - | |
| Accounts Receivable | | | - | | | | - | |
| Inventory | | | - | | | | - | |
| Deposit | | | - | | | | - | |
| Total Current Assets | | | 63 | | | | - | |
| | | | | | | | | |
| Total Assets | | $ | 63 | | | $ | - | |
| | | | | | | | | |
| Liabilities and Stockholders' Deficit: | | | | | | | | |
| Current Liabilities | | | | | | | | |
| Accounts Payable and Accrued Expenses | | $ | - | | | $ | - | |
| Due to Related Parties | | | 691,923 | | | | 654,223 | |
| Total Current Liabilities | | | 691,923 | | | | 654,223 | |
| | | | | | | | | |
| Total Liabilities | | | 691,923 | | | | 654,223 | |
| | | | | | | | | |
| Stockholders’ Equity: | | | | | | | | |
Common Stock, 150,000,000 shares authorized and 103,073 shares issued@.001 par value, respectively | | | 103 | | | | 103 | |
| Additional Paid in Capital | | | 712,244 | | | | 712,244 | |
| Other Comprehensive Income (Loss) | | | (705,714 | ) | | | (705,714 | ) |
| Deficit accumulated during development stage | | | (698,493 | ) | | | (660,856 | ) |
| Total stockholders' equity (Deficit) | | | (691,860 | ) | | | (654,223 | ) |
| | | | | | | | | |
| Total liabilities and stockholders' equity | | $ | 63 | | | $ | - | |
We have served as the Company’s auditor since 2018. Spokane, Washington |
June 18, 2021 | |
TREX ACQUISITION CORP. |
CONSOLIDATED BALANCE SHEETS |
| | | | | | |
| | June 30, 2019 | | | June 30, 2018 | |
ASSETS |
CURRENT ASSETS: | | | | | | |
Cash | | $ | - | | | $ | - | |
TOTAL CURRENT ASSETS | | | - | | | | - | |
| | | | | | | | |
Prepaid consulting | | | 21,000 | | | | 63,000 | |
TOTAL ASSETS | | $ | 21,000 | | | $ | 63,000 | |
| | | | | | | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) |
CURRENT LIABILITIES: | | | | | | | | |
Accounts Payable and Accrued Expenses | | $ | 3,148 | | | $ | 3,748 | |
Due to Related Party | | | 353,220 | | | | 287,278 | |
Notes Payable Related Party | | | 53,900 | | | | 53,900 | |
TOTAL CURRENT LIABILITIES | | | 410,268 | | | | 344,926 | |
TOTAL LIABILITIES | | | 410,268 | | | | 344,926 | |
| | | | | | | | |
Commitments and Contingencies | | | - | | | | - | |
| | | | | | | | |
STOCKHOLDERS’ EQUITY (DEFICIT) | | | | | | | | |
Common Stock, 0.001 par value, authorized 150,000,000 shares and 103,073 issued and outstanding as of June 30, 2019 and June 30, 2018 respectively | | | 103 | | | | 103 | |
Additional Paid In Capital | | | 815,996 | | | | 815,996 | |
Shares to be issued | | | 1,105,674 | | | | 1,105,674 | |
Accumulated deficit | | | (2,311,041 | ) | | | (2,203,699 | ) |
TOTAL STOCKHOLDERS’ EQUITY (DEFICIT) | | | (389,268 | ) | | | (281,926 | ) |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | | $ | 21,000 | | | $ | 63,000 | |
The accompanying notes are an integral part of these financial statements.
(FORMERLY SYNC2 NETWORKS CORP)
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS
| | | Year Ended June 30, | | | January 16, 2008 (Inception) to June 30, | |
| | | 2014 | | | 2013 | | | 2014 | |
| | | | | | | | | | | | | |
| Revenue | | $ | - | | | $ | - | | | $ | 556,774 | |
| | | | | | | | | | | | | |
| Expenses: | | | | | | | | | | | | |
| Salaries and Benefit | | | - | | | | - | | | | 693,176 | |
| Rent | | | - | | | | - | | | | 199,621 | |
| Marketing | | | - | | | | - | | | | 157,451 | |
| Foreign Exchange | | | - | | | | - | | | | 17,386 | |
| Amortization | | | - | | | | - | | | | 217,482 | |
| Transfer Agent Fees | | | 14,736 | | | | - | | | | 89,512 | |
| Professional Fees | | | 18,795 | | | | - | | | | 302,655 | |
| Management Fees | | | - | | | | - | | | | 189,997 | |
| Administration Fees | | | - | | | | - | | | | 182,083 | |
| Financial Consulting | | | - | | | | - | | | | 49,450 | |
| Travel, Meals and lodging | | | - | | | | - | | | | 10,448 | |
| Bad Debts | | | - | | | | - | | | | 36,202 | |
| General and Administrative | | | 4,106 | | | | 49,486 | | | | 262,787 | |
| Total Operating Costs | | | 37,637 | | | | 49,486 | | | | 2,408,250 | |
| | | | | | | | | | | | | |
| Loss from Operations | | | (37,637 | ) | | | (49,486 | ) | | | (1,851,476 | ) |
| | | | | | | | | | | | | |
| Net Income (Loss) from the write off of assets and liabilities of the subsidiaries | | | - | | | | 516,245 | | | | 447,269 | |
| | | | | | | | | | | | | |
| Net Income (loss) for the year | | $ | (37,637 | ) | | $ | 466,759 | | | $ | (1,404,207 | ) |
| | | | | | | | | | | | | |
| Provision for Income Taxes | | | - | | | | 158,637 | | | | | |
| | | | | | | | | | | | | |
| Extraordinary Item: | | | | | | | | | | | | |
| Carryback Losses | | | - | | | | (158,637 | ) | | | | |
| | | | | | | | | | | | | |
| Net Profit (Loss) | | $ | (37,637 | ) | | $ | 466,759 | | | $ | (1,404,207 | ) |
| | | | | | | | | | | | | |
| Loss Per Share | | | | | | | | | | | | |
| Basic and Diluted | | | (0.37 | ) | | | 4.53 | | | | | |
| | | | | | | | | | | | | |
| Weighted average shares outstanding basic and diluted | | | 103,073 | | | | 103,073 | | | | - | |
TREX ACQUISITION CORP. |
CONSOLIDATED STATEMENTS OF OPERATIONS |
for the years ended June 30, |
| | | |
| | 2019 | | | 2018 | |
REVENUE | | $ | - | | | $ | - | |
| | | | | | | | |
EXPENSES | | | | | | | | |
Transfer Agent and Filing Fees | | | 2,650 | | | | (3,120 | ) |
Shares to be issued for services | | | 42,000 | | | | 42,000 | |
Management and Consulting Fees | | | 60,000 | | | | 60,000 | |
TOTAL EXPENSES | | | 104,650 | | | | 98,880 | |
| | | | | | | | |
Loss from Operations | | | (104,650 | ) | | | (98,880 | ) |
| | | | | | | | |
Loss on failed merger | | | - | | | | (47,500 | ) |
Interest Expense | | | (2,692 | ) | | | (2,696 | ) |
LOSS BEFORE TAXES | | | (107,342 | ) | | | (149,076 | ) |
Provision for Income Taxes | | | - | | | | - | |
NET LOSS | | $ | (107,342 | ) | | $ | (149,076 | ) |
| | | | | | | | |
NET LOSS PER COMMON SHARE - BASIC & DILUTED | | $ | (1.04 | ) | | $ | (1.45 | ) |
| | | | | | | | |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC & DILUTED | | | 103,073 | | | | 103,073 | |
The accompanying notes are an integral part of these financial statements.
TREX ACQUISITION CORP.
(FORMERLY SYNC 2 NETWORKS CORP.)
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
| | | For the year ended June 30, 2014 | | | For the year ended June 30, 2013 | | | For the Period of January 16, 2008 (Inception) to June 30, 2014 | |
| Cash flows from operating activities: | | | | | | | | | |
| Net Profit (Loss) for the period | | $ | (37,637 | ) | | $ | 466,759 | | | $ | (1,404,207 | ) |
| Stock Issued | | | - | | | | - | | | | - | |
Adjustments to reconcile net (loss) to net cash (used) by operating activities: | | | | | | | | | | | | |
| (Increase) Decrease in Inventory | | | - | | | | - | | | | - | |
| (Increase) Decrease in Accounts Receivable | | | - | | | | - | | | | - | |
| Increase in Due to Related Parties | | | 37,700 | | | | 49,486 | | | | 691,923 | |
| Increase in Accounts Payable and Accrued Expenses | | | - | | | | (516,245 | ) | | | - | |
| Net cash (used) by operating activities | | | 63 | | | | - | | | | (712,284 | ) |
| | | | | | | | | | | | | |
| Cash Flows from Financing Activities: | | | | | | | | | | | | |
| Proceeds from sale of common stock | | | - | | | | - | | | | 103,046 | |
| Additional Paid in Capital | | | - | | | | - | | | | 609,301 | |
| Net cash provided by financing activities | | | - | | | | - | | | | 712,347 | |
| | | | | | | | | | | | | |
| Net increase (decrease) in cash | | | 63 | | | | - | | | | 63 | |
| Cash – beginning | | | - | | | | - | | | | - | |
| Cash – ending | | | 63 | | | | - | | | | 63 | |
TREX ACQUISITION CORP. |
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY |
as of June 30, 2019 |
| | | | | | | | | | | | | | | | | | |
| | Common Stock | | | Additional Paid in | | | Shares to be | | | Accumulated | | | | |
| | Shares | | | Amount | | | Capital | | | issued | | | Deficit | | | TOTAL | |
Balance, June 30, 2017 | | | 103,073 | | | $ | 103 | | | $ | 815,996 | | | $ | 1,058,174 | | | $ | (2,054,623 | ) | | $ | (180,350 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Loss on failed merger | | | | | | | | | | | | | | | 47,500 | | | | | | | | 47,500 | |
Net Loss | | | | | | | | | | | | | | | | | | | (149,076 | ) | | | (149,076 | ) |
Balance, June 30, 2018 | | | 103,073 | | | $ | 103 | | | $ | 815,996 | | | $ | 1,105,674 | | | $ | (2,203,699 | ) | | $ | (281,926 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net Loss | | | | | | | | | | | | | | | | | | | (107,342 | ) | | | (107,342 | ) |
Balance, June 30, 2019 | | | 103,073 | | | $ | 103 | | | $ | 815,996 | | | $ | 1,105,674 | | | $ | (2,311,041 | ) | | $ | (389,268 | ) |
The accompanying notes are an integral part of these financial statements.
TREX ACQUISITION CORP.
(FORMERLY SYNC2 NETWORKS CORP.)
(A Development Stage Company
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
Inception to June 30, 2014
| | | Common Shares | | | Common Stock | | | Additional Paid in Capital | | | Retained Deficit | | | Total | |
| Common Stock issued for cash April 15, 2008 | | | 51,000 | | | | 51 | | | $ | 2,949 | | | $ | - | | | $ | 3,000 | |
| Common Stock issued for cash April 24, 2008 | | | 22,100 | | | | 22 | | | | 6,478 | | | | - | | | | 6,500 | |
| Common Stock issued for cash May 28, 2008 | | | 12,777 | | | | 13 | | | | 14,987 | | | | - | | | | 15,000 | |
| Net Loss for the year ended June 30, 2008 | | | | | | | | | | | | | | | (1,283 | ) | | | (1,283 | ) |
| Balance June 30, 2008 | | | 85,877 | | | | 86 | | | | 24,414 | | | | (1,283 | ) | | | 23,217 | |
| Net Loss for the year ended June 30, 2009 | | | | | | | | | | | | | | | (245,220 | ) | | | (245,220 | ) |
| Balance June 30, 2009 | | | 85,877 | | | | 86 | | | | 24,414 | | | | (246,503 | ) | | | (222,003 | ) |
| Common Stock issued April 1, 2010 | | | 17,196 | | | | 17 | | | | 687,830 | | | | - | | | | 687,847 | |
| Net loss for the year ended June 30, 2010 | | | | | | | | | | | | | | | (1,503,519 | ) | | | (1,503,519 | ) |
| Balance June 30, 2010 | | | 103,073 | | | | 103 | | | | 712,244 | | | | (1,750,022 | ) | | | (1,037,675 | ) |
| Net loss for the year ended June 30, 2011 | | | - | | | | - | | | | - | | | | (387,459 | ) | | | (387,459 | ) |
| Balance June 30, 2011 | | | 103,073 | | | | 103 | | | | 712,244 | | | | (2,137,481 | ) | | | (1,425,134 | ) |
| Net profit for the year ended June 30, 2012 | | | - | | | | - | | | | - | | | | 304,152 | | | | 304,125 | |
| Balance June 30, 2012 | | | 103,073 | | | | 103 | | | | 712,244 | | | | (1,833,329 | ) | | | (1,120,982 | ) |
| Net profit for the year ended June 30, 2013 | | | - | | | | - | | | | - | | | | 466,759 | | | | 466,759 | |
| Balance June 30, 2013 | | | 103,073 | | | | 103 | | | $ | 712,244 | | | $ | (1,366,570 | ) | | $ | (654,223 | ) |
| Net Loss for the year ended June 30, 2014 | | | | | | | | | | | | | | | (37,637 | ) | | | (37,637 | ) |
| Balance June 30, 2014 | | | 103,073 | | | | 103 | | | | 712,244 | | | | (1,404,207 | ) | | | (691,860 | ) |
TREX ACQUISITION CORP. | |
CONSOLIDATED STATEMENT OF CASH FLOWS | |
for the years ended June 30, | |
| | | | | | |
| | 2019 | | | 2018 | |
OPERATING ACTIVITIES | |
Net Income (Loss) | | $ | (107,342 | ) | | $ | (149,076 | ) |
Shares to be issued for services | | | 42,000 | | | | 42,000 | |
Shares to be issued for failed merger | | | - | | | | 47,500 | |
Change in Related Party Advances | | | 65,942 | | | | 72,035 | |
Change Accounts Payable and Accrued Expenses | | | (600 | ) | | | (12,459 | ) |
Net Cash Used by Operating Activities | | | - | | | | - | |
| | | | | | | | |
FINANCING ACTIVITIES: | | | | | | | | |
Proceeds from notes payable related party | | | - | | | | - | |
Net cash provided by financing activities | | | - | | | | - | |
NET INCREASE (DECREASE) IN CASH | | | - | | | | - | |
| | | | | | | | |
CASH AT BEGINNING OF PERIOD | | | - | | | | - | |
| | | | | | | | |
CASH AT END OF PERIOD | | $ | - | | | $ | - | |
| | | | | | | | |
Supplemental Cashflow Information | | | | | | | | |
Interest Paid | | $ | - | | | $ | - | |
Taxes Paid | | $ | - | | | $ | - | |
The accompanying notes are an integral part of these financial statements.
(FORMERLY SYNC2 NETWORKS CORP.)
(A Development Stage Company)
NOTES TO CONSOLIATEDCONSOLIDATED FINANCIAL STATEMENTS
2019NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS
TrexTREX Acquisition Corp. (The “Company”) was formed on January 16, 2008 in the state of Nevada under the name Plethora Resources, Inc. as a development stage enterprise. The Company later changed its name to Sync2 Networks Corp. then on March 20, 2014 to Trex Acquisition Corp. The Company was originally organized to engage in the business of consulting to oil and gas exploration companies interested in obtaining exploration and production licenses at auction for oil and gas properties in Russia.
The
Company later changed its name to Sync2 Networks Corp when the Company began to engage in software-related services. On March 20, 2014 to TREX Acquisition Corp. after the Company business operations had ceased.As of June 30, 2019, the Company consists of itself and its 100% owned subsidiary Sync2 Networks International.
International Ltd.On April 7, 2014, our Board of Directors deemed it in the best interests of the Company and its shareholders to domesticate our subsidiary, Sync2 International Ltd., as a corporation formed under the laws of Malta to a corporation formed under the laws of the State of Nevada (the “Domestication”), which under Nevada statutory law involves the transfer of an existing corporation from one jurisdiction to another whereby Sync2 Networks International Ltd. shall cease all operations in Malta. On May 1, 2014, we filed Articles of Domestication with the Nevada Secretary of State effecting the domestication of Sync2 International Ltd. as a corporate entity formed under the laws of the State of Nevada, which domestication provides that Sync2 International Ltd. as domesticated in the State of Nevada shall be the same entity as Sync2 International Ltd. organized under the laws of Malta.
The Company’s business plan is to find a merger candidate and become an operating company or to be a corporate governance and management company.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). 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. Actual results could differ from those estimates.
Management further acknowledges that it is solely responsible for adopting sound accounting practices, establishing and maintaining a system of internal accounting control and preventing and detecting fraud. The Company'sCompany’s system of internal accounting control is designed to assure, among other items, that 1) recorded transactions are valid; 2) valid transactions are recorded; and 3) transactions are recorded in the proper period in a timely manner to produce financial statements which present fairly the financial condition, results of operations and cash flows of the Company for the respective periods being presented
Development Stage Company
Determination of Bad Debts
The CompanyCompany’s policy is to analyze the collectability of Accounts and Notes Receivable on a development stage company as defined by
section 915-10-20 ofmonthly basis to determine whether any allowance for doubtful accounts is necessary. Once the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification. Althoughallowance has been determined the Company has recognized some nominal amount of income since inception,offset is booked to bad debt expense and subsequently if the Companyaccount is still devoting substantially all of its efforts on establishingdeemed to be a bad debt, it is written off the business and, therefore, still qualifies as a development stage company. All losses accumulated since inception have been considered as part of the Company’s development stage activities.
e allowance for doubtful accounts.Principles of Consolidation
The accounts include those of the Company and its 100% owned subsidiary. All intercompany transactions have been eliminated.
At this time, SYNC2 International LTD has no operations, assets or liabilities.Use of estimates
The preparation of financial statements in conformity with generally accepted accounting principles 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. Significant estimates include the estimated useful lives of property and equipment. Actual results could differ from those estimates.
The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.
Fair value of financial instruments
The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (U.S. GAAP),) GAAP, and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:
Level 1 | | Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. |
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Level 2 | | Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. |
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Level 3 | | Pricing inputs that are generally observableunobservable inputs and not corroborated by market data. |
The carrying amount of the Company’s financial assets and liabilities, such as cash, prepaid expenses and accrued expenses approximate their fair value because of the short maturity of those instruments.
The Company’s notes payable approximate the fair value of such instruments based upon management’s best estimate of interest rates that would be available to the Company for similar financial arrangements at June 30, 2014.
2019.The Company does not have any assets orand liabilities measured atrecorded on the balance sheet approximate their fair value on a recurring or a non-recurring basis.
Equipment is recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation of equipment is computed by the straight-line method (after taking into account their respective estimated residual values) over the assets estimated useful life of three (3) or seven (7) years. Upon sale or retirement of equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in statements of operations.
Impairment of long-lived assets
Stock based compensation
The Company follows paragraph 360-10-05-4accounts for stock-based compensation in accordance with ASC Section 718 Compensation – Stock Compensation. Under the fair value recognition provisions of ASC 718 stock based compensation is measured at the FASB Accounting Standards Codification for its long-lived assets. The Company’s long-lived assets, which includes computer equipment is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable.
The Company assesses the recoverability of its long-lived assets by comparing the projected undiscounted net cash flows associated with the related long-lived asset or group of long-lived assets over their remaining estimated useful lives against their respective carrying amounts. Impairment, if any, isgrant date based on
the excess of the carrying amount over the fair value of
those assets. Fairthe award and is recognized as expensed ratably over the requisite service period/vesting period.The company accounts for its non-employee stock-based compensation in accordance with ASC Section 505 Equity Based Payments to Non-Employees. Under the fair value recognition provisions of ASC 505, stock based compensation cost is generally determined usingmeasured at the asset’s expected future discounted cash flows or market value, if readily determinable. If long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book valuesearlier of the long-lived assets are depreciated overpurchase commitment or performance completions, based on the newly determined remaining estimated useful lives.
The Company determined that there were no impairmentsfair value of long-lived assetsthe award, and is recognized as of June 30, 2014 and 2013.
expense as purchase commitment is settled.Commitments and contingencies
The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.
Since June 30, 2019 and through the date of filing, there have been no intervening lawsuits, claims or judgments filed.Revenue recognition
The Company follows paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company will recognize revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured.
Federal Income taxes are not currently due since we have had losses since inception.
On December 22, 2018 H.R. 1, originally known as the Tax Cuts and Jobs Act, (the “Tax Act”) was enacted. Among the significant changes to the U.S. Internal Revenue Code, the Tax Act lowers the U.S. federal corporate income tax rate (“Federal Tax Rate”) from 35% to 21% effective January 1, 2018. The Company follows Section 740-10-30will compute its income tax expense for the years ended June 30, 2019 using a Federal Tax Rate of 21%.
Income taxes are provided based upon the FASB Accounting Standards Codification, which requires recognitionliability method of accounting pursuant to ASC 740-10-25 Income Taxes – Recognition. Under this approach, deferred income taxes are recorded to reflect the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each year-end. A valuation allowance is recorded against deferred tax assets if management does not believe the Company has met the “more likely than not” standard required by ASC 740-10-25-5.
Deferred income tax amounts reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the expected futureamounts used for income tax consequencesreporting purposes.
As of events that have been included in the financial statements or tax returns. Under this method,June 30, 2019, we had a net operating loss carry-forward of approximately $(2,311,041) and a deferred tax assetsasset of $485,319 using the statutory rate of 21%. The deferred tax asset may be recognized in future periods, not to exceed 20 years. However, due to the uncertainty of future events we have booked valuation allowance of $(485,319). FASB ASC 740 prescribes recognition threshold and liabilities are based on the differences betweenmeasurement attributes for the financial statement recognition and tax bases of assets and liabilities using enacted tax rates in effect for the fiscal year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the fiscal years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilitiesmeasurement of a change in tax rates is recognized in the Statements of Income and Comprehensive Income in the period that includes the enactment date.
The Company adopted section 740-10-25 of the FASB Accounting Standards Codification (“Section 740-10-25”) with regards to uncertainty income taxes. Section 740-10-25 addresses the determination of whether tax benefits claimedposition taken or expected to be claimed ontaken in a tax return should be recorded in the financial statements. Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Section 740-10-25return. FASB ASC 740 also provides guidance on de-recognition, classification, interest and penalties, on income taxes, accounting in interim periods, disclosure and requires increased disclosures. Thetransition. At June 30, 2019, the Company had no material adjustmentsnot taken any tax positions that would require disclosure under FASB ASC 740. | | June 30, 2019 | | | June 30, 2018 | |
Deferred Tax Asset | | $ | 485,319 | | | $ | 462,777 | |
Valuation Allowance | | | (485,319 | ) | | | (462,777 | ) |
Deferred Tax Asset (Net) | | $ | - | | | $ | - | |
Due to its liabilitiesthe changes the Tax Reform Act of 1986 and the Tax Cut and Jobs Act of 2017, net operating loss carryforwards for unrecognizedFederal Income tax reporting purposes are subject to additional limitations. Should certain changes in ownership occur, our net operating loss carryforwards may be limited to use in future years. In addition, tax rates on corporations were reduced and certain other deductions limited. These changes may affect the income tax benefits according to the provisions of
Section 740-10-25.
benefit calculation and related allowance during subsequent fiscal yearsNet income (loss) per common share
Net income (loss) per common share is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock and potentially outstanding shares of common stock during the period. The weighted average number of common shares outstanding and potentially outstanding common shares assumes that the Company incorporated as of the beginning of the first period presented.
There were no1,835,835 potentially dilutive shares outstanding
as of June 30, 2014 or2019 resulting from shares to be issued per the conversion of related party debt (see Note 4). We also had 450,000 in shares to be issued for services that were unissued at June 30, 2013.
2019. We also had outstanding warrants that could convert into 187,500 shares of common stock as of June 30, 2019. At the end of both periods the potentially dilutive shares were excluded because the effect would have been anti-dilutive.Cash flows reporting
The Company adopted paragraph 230-10-45-24 of the FASB Accounting Standards Codification for cash flows reporting, classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method (“Indirect method”) as defined by paragraph 230-10-45-25 of the FASB Accounting Standards Codification to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments. The Company reports the reporting currency equivalent of foreign currency cash flows, using the current exchange rate at the time of the cash flows and the effect of exchange rate changes on cash held in foreign currencies is reported as a separate item in the reconciliation of beginning and ending balances of cash and cash equivalents and separately provides information about investing and financing activities not resulting in cash receipts or payments in the period pursuant to paragraph 830-230-45-1 of the FASB Accounting Standards Codification.
The Company expenses the cost of advertising and promotional materials when incurred. Total Advertising costs were zero for all periods.
The Company follows the guidance in Section 855-10-50 of the FASB Accounting Standards Codification for the disclosure of subsequent events. The Company will evaluate subsequent events through the date when the financial statements were issued. Pursuant to ASU 2010-09 of the FASB Accounting Standards Codification, the Company as an SEC filer, considers its financial statements issued when they are widely distributed to users, such as through filing them on EDGAR.
Reverse Stock Split
On October 9, 2013 the Company’s board of directors approved a 1 for 1000 reverse stock split effective in the first quarter 2014. The Company has restated its financials to reflect this reverse for all periods presented.
Recently issued accounting pronouncements
The following accounting standards were issued as of December 26, 2011:
ASU 2010-06, Fair Value Measurements and Disclosures (Topic 820) – Improving Disclosures about Fair Value Measurements.
This ASU affects all entities that are required to make disclosures about recurring and nonrecurring fair value measurements under FASB ASC Topic 820, originally issued as FASB Statement No. 157, Fair Value Measurements. The ASU requires certain new disclosures and clarifies two existing disclosure requirements. The new disclosures and clarifications of existing disclosures are effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosures about purchases, sales, issuances, and settlements in the roll forward of activity in Level 3 fair value measurements. Those disclosures are effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years.
ASU 2011-04, Fair Value Measurement (Topic 820) – Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs
This ASU supersedes most of the guidance in Topic 820, although many of the changes are clarifications of existing guidance or wording changes to align with IFRS 13. In addition, certain amendments in ASU 2011-04 change a particular principle or requirement for measuring fair value or disclosing information about fair value measurements. The amendments in ASU 2011-04 are effective for public entities for interim and annual periods beginning after December 15, 2011.
As reflected in the accompanying financial statements, the Company had an accumulated deficit of $1,404,207 at$2,311,041 and a working capital deficit of $410,268 as of June 30, 2014.
2019.While the Company is attempting to commence operations and generate revenues, the Company’s cash position may not be significant enough to support the Company’s daily operations. Management intends to raise additional funds by way of a public or private offering. Management believes that the actions presently being taken to further implement its business plan and generate revenues provide the opportunity for the Company to continue as a going concern. While the Company believes in the viability of its strategy to generate revenues and in its ability to raise additional funds, there can be no assurances to that effect.effect and there is substantial doubt about the Company’s ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate revenues.
The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
NOTE 4 – RELATED PARTY TRANSACTIONS
On June 24, 2014 the company entered into an unsecured promissory note with Lazarus asset management, LLC. in the amount of $34,550 with an interest rate of 5% per annum and a due date of June 24, 2015. This note is currently in default. As of June 30, 2019, the accrued interest on this note was $8,674.
On June 24, 2014, the company entered into an unsecured promissory note with Squadron Marketing, Inc. in the amount of $19,350 with an interest rate of 5% per annum and a due date of June 24, 2015. This note is currently in default. As of June 30, 2019, the accrued interest on this note was $4,857.
On July 1, 2014, the Company entered into management agreements with Squadron Marketing, Inc. and Lazarus Asset Management, LLC for $30,000 each annually to assist the Company in obtaining potential merger candidates, negotiating the merger agreements, drafting, along with the Company’s attorney, offering documents, and assisting with closing the transactions. The agreements resulted in Management Fee expense of $60,000 for the years ended June 30, 2019 and June 30, 2018. These amounts were unpaid at June 30, 2019.
On January 1, 2015, the company entered into a management agreement with Frank Horkey for a period of 5 years and will issue 350,000 shares of its common stock as consideration and is accounted for on the balance sheet as shares to be issued and will be expensed over the life of the contract (5 years), which resulted in a prepaid consulting expense of $210,000. They were valued on the date of the agreement and the stock price at that time was $.60. As of June 30, 2018, the shares were unissued and recorded as shares to be issued. For the years ended June 30, 2019 and 2018 the company amortized and expensed $42,000 and $42,000 respectively.
2018 Failed Reverse Merger Attempt
On April 19, 2018, the Company entered into a non-binding indication of interest (“LOI”) to acquire Kaneptec Enterprises, Inc., a company engaged in the hemp and cannabidiol business (“Kaneptec”) in a reverse merger (the “Kaneptec Transaction”). In reliance of the LOI, the Company sold 350,000 shares to a related party for $47,500, and this cash was transferred to Kaneptec in order to facilitate the Kaneptec Transaction. This potential merger candidate also advanced approximately $20,000 to the Company in anticipation of the Kaneptec Transaction. During the due diligence phase, the Company’s consultants discovered that Kaneptec’s management had made material misrepresentations regarding its business and management; therefore, the Company ceased all further negotiations with Kaneptec. The Company has not recovered any sums advanced to Kaneptec in contemplation of the failed Kaneptec Transaction.
Free office space
The Company has been provided office space by its Chief Executive Officer at no cost. The management determined that such cost is nominal and did not recognize the rent expense in its financial statements.
Due to Related Parties
During the year ended June 30, 2019, the Company incurred management fees to related parties of $60,000.
During the year ended June 30, 2019, related parties advanced $9,338.
NOTE 5 – COMMON STOCK
On September 21, 2015 Boardwalk assignees agreed to convert $691,927 in related party debt into 1,835,835 shares of the Company’s common Stock
On January 1, 2015, the Company entered into a management agreement for a period of 5 years and will issue 350,000 shares of its common stock as consideration and is accounted for on the balance sheet as shares to be issued and will be expensed over the life of the contract (5 years), which resulted in a prepaid consulting expense of $210,000. They were valued on the date of the agreement and the stock price at that time was $.60.
On January 1, 2015, the Company entered into a management agreement for a period of 2 years and will issue 100,000 shares of its common stock as consideration and is accounted for on the balance sheet as shares to be issued and will be expensed over the life of the contract (2 years), which resulted in a prepaid consulting expense of $60,000. They were valued on the date of the agreement and the Company’s stock price at that time was $.60. For the years ended June 30, 2019 and 2017 the company amortized and expensed $42,000 and $57,000 respectively.
2018 Failed Reverse Merger Attempt
On April 19, 2018, the Company entered into a non-binding indication of interest (“LOI”) to acquire Kaneptec Enterprises, Inc., a company engaged in the hemp and cannabidiol business (“Kaneptec”) in a reverse merger (the “Kaneptec Transaction”). In reliance of the LOI, the Company sold 350,000 shares to a related party for $47,500, and this cash was transferred to Kaneptec in order to facilitate the Kaneptec Transaction. This potential merger candidate also advanced approximately $20,000 to the Company in anticipation of the Kaneptec Transaction. During the due diligence phase, the Company’s consultants discovered that Kaneptec’s management had made material misrepresentations regarding its business and management; therefore, the Company ceased all further negotiations with Kaneptec. The Company has not recovered any sums advanced to Kaneptec in contemplation of the failed Kaneptec Transaction. These shares are recorded in shares to be issued at June 30, 2019.
NOTE 6 – WARRANTS
On May 3, 2014, it was resolved that the Company shall offer 250,000 Units at a price of $.80 per unit. Each Unit shall consist of (a) one (1) share of common stock and (b) a combination of series A warrants (which may be exercised within three (3) years) and series B warrants exercised within five (5) years of the consummation of a merger.
On May 14, 2014, the company entered into a subscription agreement for 157,500 units at $.80 per share for a total of $125,000 Each unit consists of one (1) share of common stock and one (1) series A warrant to purchase one share of common stock at $1.25 per share. Each A warrant expires three years from the date of issuance.
On May 14, 2014, the company entered into a subscription agreement for 32,000 units at $.80 per share for a total of $25,000. Each unit consists of one (1) share of common stock and one (1) series A warrant to purchase one share of common stock at $1.25 per share. Each A warrant expires three years from the date of issuance.
On July 14, 2014, the company entered into a subscription agreement for 62,500 units at $.80 per share for a total of $50,000. Each unit consists of one (1) share of common stock, and two (2) Series A warrants to purchase one (1) share of common stock at $.65 per share and one (1) series B warrant to purchase one (1) share of common stock at $.80. Each series A warrant expires three years from the consummation of a merger and each series B warrant expires 5 years from the consummation a merger.
The Company may call the B Warrants at such point the quoted market closing price is at least $2.50 for 20 consecutive trading days. In the event the Company calls the Warrants, it shall immediately notify holders of the Warrants of the call. Warrants holders will be granted a period of 45 calendar days to redeem the Warrants by returning the Warrant to the Company accompanied by payment of $.80 per share. The warrants were valued using a Black Scholes calculation.
The inputs for series A used a price $.59, a strike price range of .65 – 1.25, maturity 3 years, a risk-free interest rate of 3.9% and a beta of 50% estimated and were valued at $.202. The inputs for series B used a price $.59, a strike price of .80, maturity 5 years, a risk-free interest rate of 3.9% and a beta of 50% estimated and were valued at $.232.
As of the filing date of this annual report, 189,500 A warrants have expired leaving only 125,000 A Warrants and 62,500 B Warrants remaining effective since the Company has yet to consummate a merger.
The following is the outstanding warrant activity:
| | | | Warrants - Common Share Equivalents | | | Weighted Average Exercise price | | | Warrants exercisable - Common Share Equivalents | | | Weighted Average Exercise price | | | Weighted average life in years | |
Outstanding June 30, 2017 | | | | | 377,000 | | | $ | 0.75 | | | | 375,500 | | | $ | 0.75 | | | | 2.26 | |
Additions | | Granted | | | - | | | | - | | | | - | | | | - | | | | | |
Expired | | Expired | | | 189,500 | | | $ | 0.75 | | | | 189,500 | | | $ | 0.75 | | | | 2.01 | |
| | Exercised | | | - | | | | - | | | | - | | | | - | | | | | |
Outstanding June 30, 2018 | | | | | 187,500 | | | $ | 0.75 | | | | 187,500 | | | $ | 0.75 | | | | 3.67 | |
Additions | | Granted | | | - | | | | - | | | | - | | | | - | | | | | |
Expired | | Expired | | | - | | | $ | - | | | | - | | | | - | | | | | |
| | Exercised | | | - | | | | - | | | | - | | | | - | | | | | |
Outstanding June 30, 2019 | | | | | 187,500 | | | $ | 0.75 | | | | 187,500 | | | $ | 0.75 | | | | 3.67 | |
NOTE 7 – SUBSEQUENT EVENTS
The Company has evaluated all events that occurred after the balance sheet date through the date when the financial statements were issued to determine if they must be reported. The Management of the Company determined that the following subsequent events needed to be disclosed.
2020 Stock Issuances
On January 21, 2020, the Company formally issued (a) 1,835,835 shares of its common stock in connection with prior Boardwalk convertible debt conversions, (b) 450,000 shares of its common stock in connection with management compensation, (c) 250,000 shares of its common stock to unit subscribers in connection with the failed Kerr transaction, and (d) 350,000 shares of its common stock in connection with a 2018 private sale of 350,000 shares to a related party for $47,500.
On March 12, 2020, the Company issued 300,000 shares of its common stock in connection to professional service providers pursuant to their respective engagement agreements.
On June 24, 2020, the Company issued 8,900,000 shares of its common stock in connection with the conversion of $890,000 in debt owed to consultants pursuant to a July 1, 2014, consulting agreement.
On November 20, 2020, the Company issued 1,300,000 shares of its common stock in connection with a prepayment of an $80,000 future expense advanced by two related parties.
During the Fiscal year ended June 30, 2021 two related parties’ paid expenses on behalf of the company in the amount of $93,496.
On November 16, 2020, the company issued 500,000 were issued to the estate of a former shareholders.
2020 TRXA Merger Sub Inc.
March 13, 2020, the Company incorporated a wholly owned subsidiary, TRXA Merger Sub Inc., a Delaware corporation (“Merger Sub”) in order to facilitate the acquisition of a pre-revenue Software-as-a-Service internet platform business. The Company’s sole Officer and Director currently serves as the sole officer and director of the Merger Sub. As of the date of this filing, neither the Company nor the Merger Sub have entered into a definitive agreement or non-binding letter of intent to acquire a company.
In accordance with the terms and provisions of that certain Settlement Agreement dated October 9, 2020 (the “Settlement Agreement”), on November 20, 2020 TREX Acquisition Corp. issued to Squadron Marketing LLC, Four Hundred Thousand Shares (400,000) of the Company’s common stock and to Lazarus Asset Management LLC, Four Hundred Thousand Shares (400,000) of its common stock;
September 30, 2018
TREX ACQUISITION CORP. |
CONSOLIDATED BALANCE SHEETS |
| | | | | | |
| | (Un-audited) | | | | |
| | September 30, 2018 | | | June 30, 2018 | |
ASSETS | |
CURRENT ASSETS: | | | | | | |
Cash | | $ | - | | | $ | - | |
TOTAL CURRENT ASSETS | | | - | | | | - | |
| | | | | | | | |
Prepaid consulting | | | 52,500 | | | | 63,000 | |
TOTAL ASSETS | | $ | 52,500 | | | $ | 63,000 | |
| | | | | | | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) |
CURRENT LIABILITIES: | | | | | | | | |
Accounts Payable and Accrued Expenses | | $ | 1,196 | | | $ | 3,748 | |
Due to Related Party | | | 306,193 | | | | 287,278 | |
Notes payable related party | | | 53,900 | | | | 53,900 | |
TOTAL CURRENT LIABILITIES | | | 361,289 | | | | 344,926 | |
TOTAL LIABILITIES | | | 361,289 | | | | 344,926 | |
| | | | | | | | |
Commitments and Contingencies | | | - | | | | - | |
| | | | | | | | |
STOCKHOLDERS’ EQUITY (DEFICIT) | | | | | | | | |
Common Stock, 0.001 par value, authorized 150,000,000 shares and 103,073 issued and outstanding as of September 30, 2018 and June 30, 2018 respectively | | | 103 | | | | 103 | |
Additional Paid In Capital | | | 815,996 | | | | 815,996 | |
Shares to be issued | | | 1,105,674 | | | | 1,105,674 | |
Accumulated deficit | | | (2,230,562 | ) | | | (2,203,699 | ) |
TOTAL STOCKHOLDERS’ EQUITY (DEFICIT) | | | (308,789 | ) | | | (281,926 | ) |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | | $ | 52,500 | | | $ | 63,000 | |
The accompanying notes are an integral part of these financial statements.
TREX ACQUISITION CORP. |
CONSOLIDATED STATEMENTS OF OPERATIONS |
for the three months ended September 30, |
(Un-audited) |
| | | |
| | 2018 | | | 2017 | |
REVENUE | | $ | - | | | $ | - | |
| | | | | | | | |
EXPENSES | | | | | | | | |
Transfer Agent and Filing Fees | | | 699 | | | | 890 | |
Professional Fees | | | - | | | | - | |
Shares to be issued for services | | | 10,500 | | | | 10,500 | |
Management and Consulting Fees | | | 15,000 | | | | 15,000 | |
TOTAL EXPENSES | | | 26,199 | | | | 26,390 | |
| | | | | | | | |
Loss from Operations | | | (26,199 | ) | | | (26,390 | ) |
| | | | | | | | |
Interest Expense | | | (664 | ) | | | (674 | ) |
LOSS BEFORE TAXES | | | (26,863 | ) | | | (27,064 | ) |
Provision for Income Taxes | | | - | | | | - | |
NET LOSS | | $ | (26,863 | ) | | $ | (27,064 | ) |
| | | | | | | | |
NET LOSS PER COMMON SHARE - BASIC & DILUTED | | $ | (0.26 | ) | | $ | (0.26 | ) |
| | | | | | | | |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC & DILUTED | | | 103,073 | | | | 103,073 | |
The accompanying notes are an integral part of these financial statements.
TREX ACQUISITION CORP. |
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY |
as of September 30, 2018 |
(Un-audited) |
| | | | | | | | | | | | | | | | | | |
| | Common Stock | | | Additional Paid in | | | Shares to be | | | Accumulated | | | | |
| | Shares | | | Amount | | | Capital | | | issued | | | Deficit | | | TOTAL | |
| | | | | | | | | | | | | | | | | | |
Balance June 30, 2017 | | | 103,073 | | | | 103 | | | | 815,996 | | | | 1,058,174 | | | | (2,054,623 | ) | | | (180,350 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net Loss | | | | | | | | | | | | | | | | | | | (27,064 | ) | | | (27,064 | ) |
Balance September 30, 2017 | | | 103,073 | | | $ | 103 | | | $ | 815,996 | | | $ | 1,058,174 | | | $ | (2,081,687 | ) | | $ | (207,414 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net Loss | | | | | | | | | | | | | | | | | | | (27,128 | ) | | | (27,128 | ) |
Balance December 31, 2017 | | | 103,073 | | | | 103 | | | | 815,996 | | | | 1,058,174 | | | | (2,108,815 | ) | | | (234,542 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net Loss | | | | | | | | | | | | | | | | | | | (27,180 | ) | | | (27,180 | ) |
Balance March 31, 2018 | | | 103,073 | | | | 103 | | | | 815,996 | | | | 1,058,174 | | | | (2,135,995 | ) | | | (261,722 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Shares to be issued for failed merger | | | | | | | | | | | | | | | 47,500 | | | | | | | | 47,500 | |
Net Loss | | | | | | | | | | | | | | | | | | | (67,704 | ) | | | (67,704 | ) |
Balance June 30, 2018 | | | 103,073 | | | | 103 | | | | 815,996 | | | | 1,105,674 | | | | (2,203,699 | ) | | | (281,926 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net Loss | | | | | | | | | | | | | | | | | | | (26,863 | ) | | | (26,863 | ) |
Balance September 30, 2018 | | | 103,073 | | | $ | 103 | | | $ | 815,996 | | | $ | 1,105,674 | | | $ | (2,230,562 | ) | | $ | (308,789 | ) |
The accompanying notes are an integral part of these financial statements.
TREX ACQUISITION CORP. | |
CONSOLIDATED STATEMENTS OF CASH FLOWS | |
for the three months ended September 30, | |
(Un-audited) | |
| | | | | | |
| | 2018 | | | 2017 | |
OPERATING ACTIVITIES | |
Net Income (Loss) | | $ | (26,863 | ) | | $ | (27,064 | ) |
Shares to be issued for services | | | 10,500 | | | | 10,500 | |
Change in Related Party Advances | | | 18,915 | | | | 15,675 | |
Change Accounts Payable and Accrued Expenses | | | (2,552 | ) | | | 889 | |
Net Cash Used by Operating Activities | | | - | | | | - | |
| | | | | | | | |
FINANCING ACTIVITIES: | | | | | | | | |
Proceeds from notes payable related party | | | - | | | | - | |
Net cash provided by financing activities | | | - | | | | - | |
NET INCREASE (DECREASE) IN CASH | | | - | | | | - | |
| | | | | | | | |
CASH AT BEGINNING OF PERIOD | | | - | | | | 26 | |
| | | | | | | | |
CASH AT END OF PERIOD | | $ | - | | | $ | 26 | |
| | | | | | | | |
Supplemental Cashflow Information | | | | | | | | |
Interest Paid | | $ | - | | | $ | - | |
Taxes Paid | | $ | - | | | $ | - | |
Supplemental Non-Cash Information | | | | | | | | |
Note issued in exchange for amount advanced to potential merger Candidate | | $ | - | | | $ | - | |
Conversion of Notes payable | | $ | - | | | $ | - | |
Stock/warrants issued for payments made by others in which cash was never received | | $ | - | | | $ | - | |
The accompanying notes are an integral part of these financial statements.
TREX ACQUISITION CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
September 30, 2018
NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS
TREX Acquisition Corp. (The “Company”) was formed on January 16, 2008 in the state of Nevada under the name Plethora Resources, Inc. as a development stage enterprise. The Company later changed its name to Sync2 Networks Corp. then on March 20, 2014 to T-REX Acquisition Corp. The Company was originally organized to engage in the business of consulting to oil and gas exploration companies interested in obtaining exploration and production licenses at auction for oil and gas properties in Russia.
The Company consists of itself and its 100% owned subsidiary Sync2 Networks International Ltd.
On April 7, 2014, our Board of Directors deemed it in the best interests of the Company and its shareholders to domesticate our subsidiary, Sync2 International Ltd., as a corporation formed under the laws of Malta to a corporation formed under the laws of the State of Nevada (the “Domestication”), which under Nevada statutory law involves the transfer of an existing corporation from one jurisdiction to another whereby Sync2 Networks International Ltd. shall cease all operations in Malta. On May 1, 2014, we filed Articles of Domestication with the Nevada Secretary of State effecting the domestication of Sync2 International Ltd. as a corporate entity formed under the laws of the State of Nevada, which domestication provides that Sync2 International Ltd. as domesticated in the State of Nevada shall be the same entity as Sync2 International Ltd. organized under the laws of Malta.
The Company’s business plan is to find a merger candidate and become an operating company or to be a corporate governance and management company.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
Certain information and note disclosures normally included in our annual financial statements prepared in accordance with generally accepted account principles have been condensed or omitted. These consolidated financial statements should be read in conjunction with a reading of the financial statements and notes there included in our annual report on form 10k for the fiscal year end June 30, 2019, as filed with the US Securities and Exchange Commission.”
The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). 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. Actual results could differ from those estimates.
Management further acknowledges that it is solely responsible for adopting sound accounting practices, establishing and maintaining a system of internal accounting control and preventing and detecting fraud. The Company’s system of internal accounting control is designed to assure, among other items, that 1) recorded transactions are valid; 2) valid transactions are recorded; and 3) transactions are recorded in the proper period in a timely manner to produce financial statements which present fairly the financial condition, results of operations and cash flows of the Company for the respective periods being presented
Determination of Bad Debts
The Company’s policy is to analyze the collectability of Accounts and Notes Receivable on a monthly basis to determine whether any allowance for doubtful accounts is necessary. Once the allowance has been determined the offset is booked to bad debt expense and subsequently if the account is deemed to be a bad debt, it is written off the allowance for doubtful accounts.
Principles of Consolidation
The accounts include those of the Company and its 100% owned subsidiary. All intercompany transactions have been eliminated. At this time, SYNC2 International LTD has no operations, assets or liabilities.
Use of estimates
The preparation of financial statements in conformity with generally accepted accounting principles 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. Significant estimates include the estimated useful lives of property and equipment. Actual results could differ from those estimates.
Cash equivalents
The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.
Fair value of financial instruments
The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (U.S.) GAAP, and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:
Level 1 | Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. |
| |
Level 2 | Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. |
| |
Level 3 | Pricing inputs that are generally unobservable inputs and not corroborated by market data. |
The carrying amount of the Company’s financial assets and liabilities, such as cash, and accrued expenses approximate their fair value because of the short maturity of those instruments. The Company’s notes payable approximates the fair value of such instruments based upon management’s best estimate of interest rates that would be available to the Company for similar financial arrangements at September 30, 2018.
The assets and liabilities recorded on the balance sheet approximate their fair value.
Equipment
Equipment is recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation of equipment is computed by the straight-line method (after taking into account their respective estimated residual values) over the assets estimated useful life of three (3) or seven (7) years. Upon sale or retirement of equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in statements of operations.
Impairment of long-lived assets
The Company follows paragraph 360-10-05-4 of the FASB Accounting Standards Codification for its long-lived assets. The Company’s long-lived assets, which includes computer equipment is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable.
The Company assesses the recoverability of its long-lived assets by comparing the projected undiscounted net cash flows associated with the related long-lived asset or group of long-lived assets over their remaining estimated useful lives against their respective carrying amounts. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. If long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives.
The Company determined that there were no impairments of long-lived assets as of September 30, 2018 or June 30, 2018
Stock based compensations
The Company accounts for stock-based compensation in accordance with ASC Section 718 Compensation – Stock Compensation. Under the fair value recognition provisions of ASC 718 stock-based compensation is measured at the grant date based on the fair value of the award and is recognized as expensed ratably over the requisite service period/vesting period.
The company accounts for its no-employee stock-based compensation in accordance with ASC Section 505 Equity Based Payments to Non-Employees. Under the fair value recognition provisions of ASC 505, stock-based compensation cost is measured at the earlier of the purchase commitment or performance completions, based on the fair value of the award, and is recognized as expense as purchase commitment is settled.
Commitments and contingencies
The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.
Since September 30, 2018 and through the date of filing, there have been no intervening lawsuits, claims or judgments filed.Revenue recognition
The Company follows paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company will recognize revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured.
Net income (loss) per common share
Net income (loss) per common share is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock and potentially outstanding shares of common stock during the period. The weighted average number of common shares outstanding and potentially outstanding common shares assumes that the Company incorporated as of the beginning of the first period presented.
There were 1,835,835 potentially dilutive shares outstanding as of September 30, 2018 resulting from shares to be issued per the conversion of related party debt (see Note 4). We also had 450,000 shares to be issued for consulting that were unissued as of September 30, 2018. We also had outstanding warrants that could convert into 187,500 shares of common stock as of September 30, 2018. At the end of both periods the potentially dilutive shares were excluded because the effect would have been anti-dilutive.
Cash flows reporting
The Company has startedadopted paragraph 230-10-45-24 of the FASB Accounting Standards Codification for cash flows reporting, classifies cash receipts and payments according to sell electronic cigarettes.
whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method (“Indirect method”) as defined by paragraph 230-10-45-25 of the FASB Accounting Standards Codification to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments. The Company reports the reporting currency equivalent of foreign currency cash flows, using the current exchange rate at the time of the cash flows and the effect of exchange rate changes on cash held in foreign currencies is reported as a separate item in the reconciliation of beginning and ending balances of cash and cash equivalents and separately provides information about investing and financing activities not resulting in cash receipts or payments in the period pursuant to paragraph 830-230-45-1 of the FASB Accounting Standards Codification.Advertising Costs
The Company expenses the cost of advertising and promotional materials when incurred. Total Advertising costs were zero for all periods.
Subsequent events
The Company follows the guidance in Section 855-10-50 of the FASB Accounting Standards Codification for the disclosure of subsequent events. The Company will evaluate subsequent events through the date when the financial statements were issued. Pursuant to ASU 2010-09 of the FASB Accounting Standards Codification, the Company as an SEC filer, considers its financial statements issued when they are widely distributed to users, such as through filing them on EDGAR.
NOTE 3 – GOING CONCERN
As reflected in the accompanying financial statements, the Company had an accumulated deficit of $2,230,562 and a working capital deficit of $361,289 as of September 30, 2018.
While the Company is attempting to commence operations and generate revenues, the Company’s cash position may not be significant enough to support the Company’s daily operations. Management intends to raise additional funds by way of a public or private offering. Management believes that the actions presently being taken to further implement its business plan and generate revenues provide the opportunity for the Company to continue as a going concern. While the Company believes in the viability of its strategy to generate revenues and in its ability to raise additional funds, there can be no assurances to that effect and there is substantial doubt about the Company’s ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate revenues.
The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
NOTE 4 – RELATED PARTY TRANSACTIONS
On June 24, 2014, the company entered into an unsecured promissory note with Lazarus asset management, LLC. in the amount of $34,550 with an interest rate of 5% per annum and a due date of June 24, 2015. As of September 30, 2018, the outstanding accrued interest was $7,380.
On June 24, 2014, the company entered into an unsecured promissory note with Squardron Marketing, Inc. in the amount of $19,350 with an interest rate of 5% per annum and a due date of June 24, 2015. As of September 30, 2018, the outstanding accrued interest was $4,123.
On July 1, 2014, the Company entered into management agreements with Squadron Marketing, Inc. and Lazarus Asset Management, LLC for $30,000 each annually to assist the Company in obtaining potential merger candidates, negotiating the merger agreements, drafting, along with the Company’s attorney, offering documents, and assisting with closing the transactions. The agreements resulted in Management Fee expense of $15,000 for the quarter ended September 30, 2018. These amounts were unpaid as of September 30, 2018.
Free office space
The Company has been provided office space by its Chief Executive Officer at no cost. The management determined that such cost is nominal and did not recognize the rent expense in its financial statements.
TheDuring the quarter ended September 30, 2018, the Company has beenwas advanced funds$0 in cash to pay for operations by an officer. Terms are without interest payablecertain related parties and incurred management fees to these same related parties $15,000.
On January 1, 2015, the company entered into a management agreement with Frank Horkey for a period of 5 years and will issue 350,000 shares of its common stock as consideration and is accounted for on demand.
NOTE 5 – INCOME TAX
Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differencesthe balance sheet as shares to be issued and operating loss and tax credit carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences arewill be expensed over the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or alllife of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effectscontract (5 years), which resulted in a prepaid consulting expense of changes in tax laws and rates$210,000. They were valued on the date of enactment.
Net deferred tax assets consistthe agreement and the stock price at that time was $.60. As of December 31, 2017, the shares were unissued and recorded as shares to be issued.As of the following components asdate of June 30, 2014 and 2013:
| | | June 30, 2014 | | | June 30, 2013 | |
| Deferred Tax Assets – Non-current: | | | | | | |
| | | | | | | |
| NOL Carryover | | $ | 196,274 | | | $ | 158,637 | |
| Payroll Accrual | | | - | | | | - | |
| Less valuation allowance | | | (196,274 | ) | | | (158,637 | ) |
| | | | | | | | | |
| Deferred tax assets, net of valuation allowance | | $ | - | | | $ | - | |
The income tax provision differs fromfiling, all of these Related Party Transactions have since been converted into shares of the amount of income tax determined by applying the U.S. federal income tax rate to pretax income from continuing operations for the period ended June 30, 2014 and 2013 due to the following:
| | | 2014 | | | 2013 | |
| | | | | | | |
| Book Income | | $ | (37,637 | ) | | $ | 466,759 | |
| Meals and Entertainment | | | - | | | | - | |
| Stock for Services | | | - | | | | - | |
| Accrued Payroll | | | - | | | | - | |
| Valuation allowance | | | 37,637 | | | | (466,759 | ) |
| | | $ | - | | | $ | - | |
At June 30, 2014,Company’s Common Stock.NOTE 5 – COMMON STOCK
On January 1, 2015, the Company had net operating lossentered into a management agreement for a period of $196,274 that may5 years and will issue 350,000 shares of its common stock as consideration and is accounted for on the balance sheet as shares to be offset against future taxable income fromissued and will be expensed over the year 2014 to 2034. No tax benefit has been reported in the June 30, 2014 and 2013 financial statements since the potential tax benefit is offset by a valuation allowancelife of the same amount.
Due tocontract (5 years), which resulted in a prepaid consulting expense of $210,000. They were valued on the
change in ownership provisionsdate of the
Tax Reform Actagreement and the stock price at that time was $.60. For the three months ended September 30, 2018 and 2016 we expensed $10,500 and $10,500 respectively.On January 1, 2015, the Company entered into a management agreement for a period of 1986, net operating loss carryforwards2 years and will issue 100,000 shares of its common stock as consideration and is accounted for Federal Income tax reporting purposes are subjecton the balance sheet as shares to annual limitations. Shouldbe issued and will be expensed over the life of the contract (2 years), which resulted in a change in ownership occur, net operating loss carryforwards may be limited as to use in future years.
prepaid consulting expense of $60,000. They were valued on the date of the agreement and the Company’s stock price at that time was $.60. For the three months ended September 30, 2018 and 2016 we expensed $7,500 and $7,500 respectively.NOTE 6 – WARRANTS
On May 3, 2014, it was resolved that the Company shall offer 250,000 Units at a price of $.80 per unit. Each Unit shall consist of (a) one (1) share of common stock and (b) a combination of series A warrants (which may be exercised within three (3) years) and series B warrants exercised within five (5) years of the consummation of a merger.
On May 14, 2014, the company entered into a subscription agreement for 157,500 units at $.80 per share for a total of $125,000 Each unit consists of one (1) share of common stock and one (1) series A warrant to purchase one share of common stock at $1.25 per share. Each A warrant expires three years from the date of issuance. These warrants have expired as of September 30, 2018.
On May 14, 2014, the company entered into a subscription agreement for 32,000 units at $.80 per share for a total of $25,000. Each unit consists of one (1) share of common stock and one (1) series A warrant to purchase one share of common stock at $1.25 per share Each A warrant expires three years from the date of issuance. These warrants have expired as of September 30, 2018.
On July 14, 2014, the company entered into a subscription agreement for 62,500 units at $.80 per share for a total of $50,000. Each unit consists of one (1) share of common stock, and two (2) Series A warrants to purchase one (1) share of common stock at $.65 per share and one (1) series B warrant to purchase one (1) share of common stock at $.80. Each series A warrant expires three years from the consummation of a merger and each series B warrant expires 5 years from the consummation a merger.
The Company may call the B Warrants at such point the quoted market closing price is at least $2.50 for 20 consecutive trading days. In the event the Company calls the Warrants, it shall immediately notify holders of the Warrants of the call. Warrants holders will be granted a period of 45 calendar days to remit payment of $.80 per share. The warrants were valued using a Black Scholes calculation.
The inputs for series A used a price $.59, a strike price range of .65 – 1.25, maturity 3 years, a risk-free interest rate of 3.9% and a beta of 50% estimated and were valued at $.202. The inputs for series B used a price $.59, a strike price of .80, maturity 5 years, a risk-free interest rate of 3.9% and a beta of 50% estimated and were valued at $.232.
As of the filing date of this annual report, 189,500 A warrants have expired; only 125,000 A Warrants and 62,500 B Warrants remain effective since the Company has yet to consummate a merger.
The following is the outstanding warrant activity:
| | | | Warrants - Common Share Equivalents | | | Weighted Average Exercise price | | | Warrants exercisable - Common Share Equivalents | | | Weighted Average Exercise price | | | Weighted average life in years | |
Outstanding June 30, 2017 | | | | | 377,000 | | | $ | 0.75 | | | | 375,500 | | | $ | 0.75 | | | | 2.26 | |
Additions | | Granted | | | - | | | | - | | | | - | | | | - | | | | | |
Expired | | Expired | | | 189,500 | | | $ | 0.75 | | | | 189,500 | | | $ | 0.75 | | | | 2.01 | |
| | Exercised | | | - | | | | - | | | | - | | | | - | | | | | |
Outstanding June 30, 2018 | | | | | 187,500 | | | $ | 0.75 | | | | 187,500 | | | $ | 0.75 | | | | 3.67 | |
Additions | | Granted | | | - | | | | - | | | | - | | | | - | | | | | |
Expired | | Expired | | | - | | | $ | - | | | | - | | | | - | | | | | |
| | Exercised | | | - | | | | - | | | | - | | | | - | | | | | |
Outstanding September 30, 2018 | | | | | 187,500 | | | $ | 0.75 | | | | 187,500 | | | $ | 0.75 | | | | 3.67 | |
NOTE 7 – SUBSEQUENT EVENTS
The Company has evaluated all events that occurred after the balance sheet date through the date when the financial statements were issued to determine if they must be reported. The Management of the Company determined that there was two reportablethe following subsequent eventevents needed to be disclosed
disclosed.2018 Failed Reverse Merger Attempt
On April 19, 2018, the Company entered into a non-binding indication of interest (“LOI”) to acquire Kaneptec Enterprises, Inc., a company engaged in the hemp and cannabidiol business (“Kaneptec”) in a reverse merger (the “Kaneptec Transaction”). In reliance of the LOI, the Company sold 350,000 shares to a related party for $47,500, and this cash was transferred to Kaneptec in order to facilitate the Kaneptec Transaction. This potential merger candidate also advanced approximately $20,000 to the Company in anticipation of the Kaneptec Transaction. During the due diligence phase, the Company’s consultants discovered that Kaneptec’s management had made material misrepresentations;; therefore, the Company ceased all further negotiations with Kaneptec. The Company has not recovered any sums advanced to Kaneptec in contemplation of the failed Kaneptec Transaction.
2020 Stock Issuances
On January 21, 2020, the Company formally issued (a) 1,835,835 shares of its common stock in connection with prior Boardwalk convertible debt conversions, (b) 450,000 shares of its common stock in connection with management compensation, (c) 250,000 shares of its common stock to unit subscribers in connection with the failed Kerr transaction, and (d) 350,000 shares of its common stock in connection with a 2018 private sale of 350,000 shares to a related party for $47,500.
On March 12. 2020, the Company issued 300,000 shares of its common stock in connection to professional service providers pursuant to their respective engagement agreements.
On June 24, 2020, the Company issued 8,900,000 shares of its common stock in connection with the conversion of $890,000 in debt owed to consultants pursuant to a July 1, 2014 consulting agreement.
On November 20, 2020, the Company issued 1,300,000 shares of its common stock in connection with a prepayment of an $80,000 future expense advanced by two related parties.
On November 16, 2020 the company issued 500,000 were issued to the estate of a former shareholders.
2020 TRXA Merger Sub Inc.
March 13, 2020, the Company incorporated a wholly owned subsidiary, TRXA Merger Sub Inc., a Delaware corporation (“Merger Sub”) in order to facilitate the acquisition of a pre-revenue Software-as-a-Service internet platform business. The Company’s Sole Officer and Director currently serves as the sole officer and director of the Merger Sub. As of the date of this filing, neither the Company nor the Merger Sub have entered into a definitive agreement or non-binding letter of intent to acquire a company.
During the Fiscal year ended June 30, 2021 two related parties paid expenses on behalf of the company in the amount of $93,496.
In accordance with the terms and provisions of that certain Settlement Agreement dated October 9, 2020 (the “Settlement Agreement”), on November 20, 2020 TREX Acquisition Corp. issued to Squadron Marketing LLC, Four Hundred Thousand Shares (400,000) of the Company’s common stock and to Lazarus Asset Management LLC, Four Hundred Thousand Shares (400,000) of its common stock;
1. |
The Company has entered into a preliminary agreement to be acquired in a transaction that would be treated for accounting purposes as a reverse merger.F-26 |
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| Table of Contents |
TREX ACQUISITION CORP. |
CONSOLIDATED BALANCE SHEETS |
| | | | | | |
| | (Un-audited) | | | | |
| | December 31, 2018 | | | June 30, 2018 | |
ASSETS | |
CURRENT ASSETS: | | | | | | |
Cash | | $ | - | | | $ | - | |
TOTAL CURRENT ASSETS | | | - | | | | - | |
| | | | | | | | |
Prepaid consulting | | | 42,000 | | | | 63,000 | |
TOTAL ASSETS | | $ | 42,000 | | | $ | 63,000 | |
| | | | | | | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) |
CURRENT LIABILITIES: | | | | | | | | |
Accounts Payable and Accrued Expenses | | $ | 2,135 | | | $ | 3,748 | |
Due to Related Party | | | 321,866 | | | | 287,278 | |
Notes payable related party | | | 53,900 | | | | 53,900 | |
TOTAL CURRENT LIABILITIES | | | 377,901 | | | | 344,926 | |
TOTAL LIABILITIES | | | 377,901 | | | | 344,926 | |
| | | | | | | | |
Commitments and Contingencies | | | - | | | | - | |
| | | | | | | | |
STOCKHOLDERS’ EQUITY (DEFICIT) | | | | | | | | |
Common Stock, 0.001 par value, authorized 150,000,000 shares and 103,073 issued and outstanding as of December 31, 2018 and June 30, 2018 respectively | | | 103 | | | | 103 | |
Additional Paid In Capital | | | 815,996 | | | | 815,996 | |
Shares to be issued | | | 1,105,674 | | | | 1,105,674 | |
Accumulated deficit | | | (2,257,674 | ) | | | (2,203,699 | ) |
TOTAL STOCKHOLDERS’ EQUITY (DEFICIT) | | | (335,901 | ) | | | (281,926 | ) |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | | $ | 42,000 | | | $ | 63,000 | |
The accompanying notes are an integral part of these financial statements.
TREX ACQUISITION CORP. |
CONSOLIDATED STATEMENTS OF OPERATIONS |
for the three and six months ended December 31, |
(Un-audited) |
| | | | | | | | | | | | |
| | three months ended | | | six months ended | |
| | 2018 | | | 2017 | | | 2018 | | | 2017 | |
REVENUE | | $ | - | | | $ | - | | | $ | - | | | $ | - | |
| | | | | | | | | | | | | | | | |
EXPENSES | | | | | | | | | | | | | | | | |
Transfer Agent and Filing Fees | | | 938 | | | | 954 | | | | 1,637 | | | | 1,844 | |
Shares to be issued for services | | | 10,500 | | | | 10,500 | | | | 21,000 | | | | 21,000 | |
Management and Consulting Fees | | | 15,000 | | | | 15,000 | | | | 30,000 | | | | 30,000 | |
TOTAL EXPENSES | | | 26,438 | | | | 26,454 | | | | 52,637 | | | | 52,844 | |
| | | | | | | | | | | | | | | | |
Loss from Operations | | | (26,438 | ) | | | (26,454 | ) | | | (52,637 | ) | | | (52,844 | ) |
| | | | | | | | | | | | | | | | |
Interest Expense | | | (674 | ) | | | (674 | ) | | | (1,338 | ) | | | (1,348 | ) |
LOSS BEFORE TAXES | | | (27,112 | ) | | | (27,128 | ) | | | (53,975 | ) | | | (54,192 | ) |
Provision for Income Taxes | | | - | | | | - | | | | - | | | | - | |
NET LOSS | | $ | (27,112 | ) | | $ | (27,128 | ) | | $ | (53,975 | ) | | $ | (54,192 | ) |
| | | | | | | | | | | | | | | | |
NET LOSS PER COMMON SHARE - BASIC & DILUTED | | $ | (0.26 | ) | | $ | (0.26 | ) | | $ | (0.52 | ) | | $ | (0.53 | ) |
| | | | | | | | | | | | | | | | |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC & DILUTED | | | 103,073 | | | | 103,073 | | | | 103,073 | | | | 103,073 | |
The accompanying notes are an integral part of these financial statements.
TREX ACQUISITION CORP. |
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY |
as of December 31, 2018 |
(Un-audited) |
| | | | | | | | | | | | | | | | | | |
| | Common Stock | | | Additional Paid in | | | Shares to be | | | Accumulated | | | | |
| | Shares | | | Amount | | | Capital | | | issued | | | Deficit | | | TOTAL | |
| | | | | | | | | | | | | | | | | | |
Balance June 30, 2017 | | | 103,073 | | | | 103 | | | | 815,996 | | | | 1,058,174 | | | | (2,054,623 | ) | | | (180,350 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net Loss | | | | | | | | | | | | | | | | | | | (27,064 | ) | | | (27,064 | ) |
Balance September 30, 2017 | | | 103,073 | | | $ | 103 | | | $ | 815,996 | | | $ | 1,058,174 | | | $ | (2,081,687 | ) | | $ | (207,414 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net Loss | | | | | | | | | | | | | | | | | | | (27,128 | ) | | | (27,128 | ) |
Balance December 31, 2017 | | | 103,073 | | | | 103 | | | | 815,996 | | | | 1,058,174 | | | | (2,108,815 | ) | | | (234,542 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net Loss | | | | | | | | | | | | | | | | | | | (27,180 | ) | | | (27,180 | ) |
Balance March 31, 2018 | | | 103,073 | | | | 103 | | | | 815,996 | | | | 1,058,174 | | | | (2,135,995 | ) | | | (261,722 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Shares to be issued for failed merger | | | | | | | | | | | | | | | 47,500 | | | | | | | | 47,500 | |
Net Loss | | | | | | | | | | | | | | | | | | | (67,704 | ) | | | (67,704 | ) |
Balance June 30, 2018 | | | 103,073 | | | | 103 | | | | 815,996 | | | | 1,105,674 | | | | (2,203,699 | ) | | | (281,926 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net Loss | | | | | | | | | | | | | | | | | | | (26,863 | ) | | | (26,863 | ) |
Balance September 30, 2018 | | | 103,073 | | | $ | 103 | | | $ | 815,996 | | | $ | 1,105,674 | | | $ | (2,230,562 | ) | | $ | (308,789 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net Loss | | | | | | | | | | | | | | | | | | | (27,112 | ) | | | (27,112 | ) |
Balance December 31, 2018 | | | 103,073 | | | $ | 103 | | | $ | 815,996 | | | $ | 1,105,674 | | | $ | (2,257,674 | ) | | $ | (335,901 | ) |
The accompanying notes are an integral part of these financial statements.
TREX ACQUISITION CORP. | |
CONSOLIDATED STATEMENTS OF CASH FLOWS | |
for the six months ended December 31, | |
(Un-audited) | |
| | | | | | |
| | 2018 | | | 2017 | |
OPERATING ACTIVITIES | |
Net Income (Loss) | | $ | (53,975 | ) | | $ | (54,192 | ) |
Shares to be issued for services | | | 21,000 | | | | 21,000 | |
Change in Related Party Advances | | | 34,588 | | | | 31,349 | |
Change Accounts Payable and Accrued Expenses | | | (1,613 | ) | | | 1,843 | |
Net Cash Used by Operating Activities | | | - | | | | - | |
| | | | | | | | |
FINANCING ACTIVITIES: | | | | | | | | |
Proceeds from notes payable related party | | | - | | | | - | |
Net cash provided by financing activities | | | - | | | | - | |
NET INCREASE (DECREASE) IN CASH | | | - | | | | - | |
| | | | | | | | |
CASH AT BEGINNING OF PERIOD | | | - | | | | 26 | |
| | | | | | | | |
CASH AT END OF PERIOD | | $ | - | | | $ | 26 | |
| | | | | | | | |
Supplemental Cashflow Information | | | | | | | | |
Interest Paid | | $ | - | | | $ | - | |
Taxes Paid | | $ | - | | | $ | - | |
Supplemental Non-Cash Information | | | | | | | | |
Note issued in exchange for amount advanced to potential merger Candidate | | $ | - | | | $ | - | |
Conversion of Notes payable | | $ | - | | | $ | - | |
Stock/warrants issued for payments made by others in which cash was never received | | $ | - | | | $ | - | |
The accompanying notes are an integral part of these financial statements.
TREX ACQUISITION CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
December 31, 2018
NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS
TREX Acquisition Corp. (The “Company”) was formed on January 16, 2008 in the state of Nevada under the name Plethora Resources, Inc. as a development stage enterprise. The Company later changed its name to Sync2 Networks Corp. then on March 20, 2014 to T-REX Acquisition Corp. The Company was originally organized to engage in the business of consulting to oil and gas exploration companies interested in obtaining exploration and production licenses at auction for oil and gas properties in Russia.
The Company consists of itself and its 100% owned subsidiary Sync2 Networks International Ltd.
On April 7, 2014, our Board of Directors deemed it in the best interests of the Company and its shareholders to domesticate our subsidiary, Sync2 International Ltd., as a corporation formed under the laws of Malta to a corporation formed under the laws of the State of Nevada (the “Domestication”), which under Nevada statutory law involves the transfer of an existing corporation from one jurisdiction to another whereby Sync2 Networks International Ltd. shall cease all operations in Malta. On May 1, 2014, we filed Articles of Domestication with the Nevada Secretary of State effecting the domestication of Sync2 International Ltd. as a corporate entity formed under the laws of the State of Nevada, which domestication provides that Sync2 International Ltd. as domesticated in the State of Nevada shall be the same entity as Sync2 International Ltd. organized under the laws of Malta.
The Company’s business plan is to find a merger candidate and become an operating company or to be a corporate governance and management company.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
Certain information and note disclosures normally included in our annual financial statements prepared in accordance with generally accepted account principles have been condensed or omitted. These consolidated financial statements should be read in conjunction with a reading of the financial statements and notes there included in our annual report on form 10k for the fiscal year end June 30, 2019, as filed with this form 10K.”
The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). 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. Actual results could differ from those estimates.
Management further acknowledges that it is solely responsible for adopting sound accounting practices, establishing and maintaining a system of internal accounting control and preventing and detecting fraud. The Company’s system of internal accounting control is designed to assure, among other items, that 1) recorded transactions are valid; 2) valid transactions are recorded; and 3) transactions are recorded in the proper period in a timely manner to produce financial statements which present fairly the financial condition, results of operations and cash flows of the Company for the respective periods being presented
Determination of Bad Debts
The Company’s policy is to analyze the collectability of Accounts and Notes Receivable on a monthly basis to determine whether any allowance for doubtful accounts is necessary. Once the allowance has been determined the offset is booked to bad debt expense and subsequently if the account is deemed to be a bad debt, it is written off the allowance for doubtful accounts.
Principles of Consolidation
The accounts include those of the Company and its 100% owned subsidiary. All intercompany transactions have been eliminated. At this time, SYNC2 International LTD has no operations, assets or liabilities.
Use of estimates
The preparation of financial statements in conformity with generally accepted accounting principles 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. Significant estimates include the estimated useful lives of property and equipment. Actual results could differ from those estimates.
Cash equivalents
The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.
Fair value of financial instruments
The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (U.S.) GAAP and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:
Level 1 | Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. |
| |
Level 2 | Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. |
| |
Level 3 | Pricing inputs that are generally unobservable inputs and not corroborated by market data. |
The carrying amount of the Company’s financial assets and liabilities, such as cash, and accrued expenses approximate their fair value because of the short maturity of those instruments. The Company’s notes payable approximate the fair value of such instruments based upon management’s best estimate of interest rates that would be available to the Company for similar financial arrangements at December 31, 2018.
The Company does not have any assets or liabilities measured at fair value on a recurring or a non-recurring basis.
Equipment
Equipment is recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation of equipment is computed by the straight-line method (after taking into account their respective estimated residual values) over the assets estimated useful life of three (3) or seven (7) years. Upon sale or retirement of equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in statements of operations.
Stock based compensation
The Company accounts for stock-based compensation in accordance with ASC Section 718 Compensation – Stock Compensation. Under the fair value recognition provisions of ASC 718 stock-based compensation is measured at the grant date based on the fair value of the award and is recognized as expensed ratably over the requisite service period/vesting period.
The company accounts for its non-employee stock-based compensation in accordance with ASC Section 505 Equity Based Payments to Non-Employees. Under the fair value recognition provisions of ASC 505, stock-based compensation cost is measured at the earlier of the purchase commitment or performance completions, based on the fair value of the award, and is recognized as expense as purchase commitment is settled.
Commitments and contingencies
The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated. Since December 31, 2018 and through the date of filing, there have been no intervening lawsuits, claims or judgments filed.
Revenue recognition
The Company follows paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company will recognize revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured.
Net income (loss) per common share
Net income (loss) per common share is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock and potentially outstanding shares of common stock during the period. The weighted average number of common shares outstanding and potentially outstanding common shares assumes that the Company incorporated as of the beginning of the first period presented.
There were 1,835,835 potentially dilutive shares outstanding as of December 31, 2018 resulting from shares to be issued per the conversion of related party debt (see Note 4). We also had 450,000 of shares to be issued for consulting that were unissued as of December 31, 2018. We also had outstanding warrants that could convert into 187,500 shares of common stock as of December 31, 2018. At the end of both periods the potentially dilutive shares were excluded because the effect would have been anti-dilutive.
Cash flows reporting
The Company adopted paragraph 230-10-45-24 of the FASB Accounting Standards Codification for cash flows reporting, classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method (“Indirect method”) as defined by paragraph 230-10-45-25 of the FASB Accounting Standards Codification to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments. The Company reports the reporting currency equivalent of foreign currency cash flows, using the current exchange rate at the time of the cash flows and the effect of exchange rate changes on cash held in foreign currencies is reported as a separate item in the reconciliation of beginning and ending balances of cash and cash equivalents and separately provides information about investing and financing activities not resulting in cash receipts or payments in the period pursuant to paragraph 830-230-45-1 of the FASB Accounting Standards Codification.
Advertising Costs
The Company expenses the cost of advertising and promotional materials when incurred. Total Advertising costs were zero for all periods.
Subsequent events
The Company follows the guidance in Section 855-10-50 of the FASB Accounting Standards Codification for the disclosure of subsequent events. The Company will evaluate subsequent events through the date when the financial statements were issued. Pursuant to ASU 2010-09 of the FASB Accounting Standards Codification, the Company as an SEC filer, considers its financial statements issued when they are widely distributed to users, such as through filing them on EDGAR.
NOTE 3 – GOING CONCERN
As reflected in the accompanying financial statements, the Company had an accumulated deficit of $2,257,674 and a working capital deficit of $377,901 at December 31, 2018.
While the Company is attempting to commence operations and generate revenues, the Company’s cash position may not be significant enough to support the Company’s daily operations. Management intends to raise additional funds by way of a public or private offering. Management believes that the actions presently being taken to further implement its business plan and generate revenues provide the opportunity for the Company to continue as a going concern. While the Company believes in the viability of its strategy to generate revenues and in its ability to raise additional funds, there can be no assurances to that effect and there is substantial doubt about the Company’s ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate revenues.
The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
NOTE 4 – RELATED PARTY TRANSACTIONS
On June 24, 2014 the company entered into an unsecured promissory note with Lazarus asset management, LLC. in the amount of $34,550 with an interest rate of 5% per annum and a due date of June 24, 2015. As of December 31, 2018, the outstanding accrued interest was $7,812.
On June 24, 2014 the company entered into an unsecured promissory note with Squardron Marketing, Inc. in the amount of $19,350 with an interest rate of 5% per annum and a due date of June 24, 2015. As of December 31, 2018, the outstanding accrued interest was $4,365.
On July 1, 2014, the Company entered into management agreements with Squadron Marketing, Inc. and Lazarus Asset Management, LLC for $30,000 each annually to assist the Company in obtaining potential merger candidates, negotiating the merger agreements, drafting, along with the Company’s attorney, offering documents, and assisting with closing the transactions. The agreements resulted in Management Fee expense of $15,000 for the quarter ended December 31, 2018 and $30,000 for the six months ended December 31, 2018. These amounts were unpaid at the end of the quarter and six months ended December 31, 2018.
Free office space
The Company has been provided office space by its Chief Executive Officer at no cost. The management determined that such cost is nominal and did not recognize the rent expense in its financial statements.
Due to Related Parties
During the quarter ended December 31, 2018, the Company was advanced $0 in cash to pay for operations by certain related parties and incurred management fees to these same related parties $15,000. During the six months ended December 31, 2018, the Company was advanced $0 in cash to pay for operations by certain related parties and incurred management fees to these same related parties $30,000.
On January 1, 2015, the company entered into a management agreement with Frank Horkey for a period of 5 years and will issue 350,000 shares of its common stock as consideration and is accounted for on the balance sheet as shares to be issued and will be expensed over the life of the contract (5 years), which resulted in a prepaid consulting expense of $210,000. They were valued on the date of the agreement and the stock price at that time was $.60. As of December 31, 2018, the shares were unissued and recorded as shares to be issued.
As of the date of filing, all of these Related Party Transactions have since been converted into shares of the Company’s Common Stock.
NOTE 5 – COMMON STOCK
On January 1, 2015, the Company entered into a management agreement for a period of 5 years and will issue 350,000 shares of its common stock as consideration and is accounted for on the balance sheet as shares to be issued and will be expensed over the life of the contract (5 years), which resulted in a prepaid consulting expense of $210,000. They were valued on the date of the agreement and the stock price at that time was $.60. For the six months ended December 31, 2018 and 2017 we expensed $21,000 and $21,000 respectively.
On January 1, 2015, the Company entered into a management agreement for a period of 2 years and will issue 100,000 shares of its common stock as consideration and is accounted for on the balance sheet as shares to be issued and will be expensed over the life of the contract (2 years), which resulted in a prepaid consulting expense of $60,000. They were valued on the date of the agreement and the Company’s stock price at that time was $.60. For the six months ended December 31, 2018 and 2017 we expensed $0 and $0 respectively.
NOTE 6 – WARRANTS
On May 3, 2014, it was resolved that the Company shall offer 250,000 Units at a price of $.80 per unit. Each Unit shall consist of (a) one (1) share of common stock and (b) a combination of series A warrants (which may be exercised within three (3) years) and series B warrants exercised within five (5) years of the consummation of a merger.
On May 14, 2014, the company entered into a subscription agreement for 157,500 units at $.80 per share for a total of $125,000 Each unit consists of one (1) share of common stock and one (1) series A warrant to purchase one share of common stock at $1.25 per share. Each A warrant expires three years from the date of issuance.
On May 14, 2014, the company entered into a subscription agreement for 32,000 units at $.80 per share for a total of $25,000. Each unit consists of one (1) share of common stock and one (1) series A warrant to purchase one share of common stock at $1.25 per share Each A warrant expires three years from the date of issuance.
On July 14, 2014, the company entered into a subscription agreement for 62,500 units at $.80 per share for a total of $50,000. Each unit consists of one (1) share of common stock, and two (2) Series A warrants to purchase one (1) share of common stock at $.65 per share and one (1) series B warrant to purchase one (1) share of common stock at $.80. Each series A warrant expires three years from the consummation of a merger and each series B warrant expires 5 years from the consummation a merger.
The Company may call the B Warrants at such point the quoted market closing price is at least $2.50 for 20 consecutive trading days. In the event the Company calls the Warrants, it shall immediately notify holders of the Warrants of the call. Warrants holders will be granted a period of 45 calendar days to remit payment of $.80 per share. The warrants were valued using a Black Scholes calculation.
The inputs for series A used a price $.59, a strike price range of .65 – 1.25, maturity 3 years, a risk-free interest rate of 3.9% and a beta of 50% estimated and were valued at $.202. The inputs for series B used a price $.59, a strike price of .80, maturity 5 years, a risk-free interest rate of 3.9% and a beta of 50% estimated and were valued at $.232.
As of the filing date of this annual report, 189,500 A warrants have expired; only 125,000 A Warrants and 62,500 B Warrants remain effective since the Company has yet to consummate a merger.
The following is the outstanding warrant activity:
| | | | Warrants - Common Share Equivalents | | | Weighted Average Exercise price | | | Warrants exercisable - Common Share Equivalents | | | Weighted Average Exercise price | | | Weighted average life in years | |
Outstanding June 30, 2017 | | | | | 377,000 | | | $ | 0.75 | | | | 375,500 | | | $ | 0.75 | | | | 2.26 | |
Additions | | Granted | | | - | | | | - | | | | - | | | | - | | | | | |
Expired | | Expired | | | 189,500 | | | $ | 0.75 | | | | 189,500 | | | $ | 0.75 | | | | 2.01 | |
| | Exercised | | | - | | | | - | | | | - | | | | - | | | | | |
Outstanding June 30, 2018 | | | | | 187,500 | | | $ | 0.75 | | | | 187,500 | | | $ | 0.75 | | | | 3.67 | |
Additions | | Granted | | | - | | | | - | | | | - | | | | - | | | | | |
Expired | | Expired | | | - | | | $ | - | | | | - | | | | - | | | | | |
| | Exercised | | | - | | | | - | | | | - | | | | - | | | | | |
Outstanding December 31, 2018 | | | | | 187,500 | | | $ | 0.75 | | | | 187,500 | | | $ | 0.75 | | | | 3.67 | |
NOTE 7 – SUBSEQUENT EVENTS
The Company has evaluated all events that occurred after the balance sheet date through the date when the financial statements were issued to determine if they must be reported. The Management of the Company determined that the following subsequent events needed to be disclosed.
2020 Stock Issuances
On January 21, 2020, the Company formally issued (a) 1,835,835 shares of its common stock in connection with prior Boardwalk convertible debt conversions, (b) 450,000 shares of its common stock in connection with management compensation, (c) 250,000 shares of its common stock to unit subscribers in connection with the failed Kerr transaction, and (d) 350,000 shares of its common stock in connection with a 2018 private sale of 350,000 shares to a related party for $47,500.
On March 12. 2020, the Company issued 300,000 shares of its common stock in connection to professional service providers pursuant to their respective engagement agreements.
On June 24, 2020, the Company issued 8,900,000 shares of its common stock in connection with the conversion of $890,000 in debt owed to consultants pursuant to a July 1, 2014 consulting agreement.
On November 20, 2020, the Company issued 1,300,000 shares of its common stock in connection with a prepayment of an $80,000 future expense advanced by two related parties.
On November 16, 2020 the company issued 500,000 were issued to the estate of a former shareholders.
2020 TRXA Merger Sub Inc.
March 13, 2020, the Company incorporated a wholly owned subsidiary, TRXA Merger Sub Inc., a Delaware corporation (“Merger Sub”) in order to facilitate the acquisition of a pre-revenue Software-as-a-Service internet platform business. The Company’s Sole Officer and Director currently serves as the sole officer and director of the Merger Sub. As of the date of this filing, neither the Company nor the Merger Sub have entered into a definitive agreement or non-binding letter of intent to acquire a company.
During the Fiscal year ended June 30, 2021 two related parties paid expenses on behalf of the company in the amount of $93,496.
In accordance with the terms and provisions of that certain Settlement Agreement dated October 9, 2020 (the “Settlement Agreement”), on November 20, 2020 TREX Acquisition Corp. issued to Squadron Marketing LLC, Four Hundred Thousand Shares (400,000) of the Company’s common stock and to Lazarus Asset Management LLC, Four Hundred Thousand Shares (400,000) of its common stock;
March 31, 2018
TREX ACQUISITION CORP. |
CONSOLIDATED BALANCE SHEETS |
| | | | | | |
| | (Unaudited) | | | | |
| | March 31, 2019 | | | June 30, 2018 | |
ASSETS |
CURRENT ASSETS: | | | | | | |
Cash | | $ | - | | | $ | - | |
TOTAL CURRENT ASSETS | | | - | | | | - | |
| | | | | | | | |
Prepaid consulting | | | 31,500 | | | | 63,000 | |
TOTAL ASSETS | | $ | 31,500 | | | $ | 63,000 | |
| | | | | | | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) |
CURRENT LIABILITIES: | | | | | | | | |
Accounts Payable and Accrued Expenses | | $ | 2,729 | | | $ | 3,748 | |
Due to Related Party | | | 337,539 | | | | 287,278 | |
Notes Payable Related Party | | | 53,900 | | | | 53,900 | |
TOTAL CURRENT LIABILITIES | | | 394,168 | | | | 344,926 | |
TOTAL LIABILITIES | | | 394,168 | | | | 344,926 | |
| | | | | | | | |
Commitments and Contingencies | | | - | | | | - | |
| | | | | | | | |
STOCKHOLDERS’ EQUITY (DEFICIT) | | | | | | | | |
Common Stock, 0.001 par value, authorized 150,000,000 shares and 103,073 issued and outstanding as of March 31, 2019 and June 30, 2018 respectively | | | 103 | | | | 103 | |
Additional Paid In Capital | | | 815,996 | | | | 815,996 | |
Shares to be issued | | | 1,105,674 | | | | 1,105,674 | |
Accumulated deficit | | | (2,284,441 | ) | | | (2,203,699 | ) |
TOTAL STOCKHOLDERS’ EQUITY (DEFICIT) | | | (362,668 | ) | | | (281,926 | ) |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | | $ | 31,500 | | | $ | 63,000 | |
The accompanying notes are an integral part of these financial statements.
TREX ACQUISITION CORP. |
CONSOLIDATED STATEMENTS OF OPERATIONS |
for the three and nine months ended March 31, |
(Un-audited) |
| | | | | | | | | | | | |
| | three months ended | | | nine months ended | |
| | 2019 | | | 2018 | | | 2019 | | | 2018 | |
REVENUE | | $ | - | | | $ | - | | | $ | - | | | $ | - | |
| | | | | | | | | | | | | | | | |
EXPENSES | | | | | | | | | | | | | | | | |
Transfer Agent and Filing Fees | | | 593 | | | | 1,006 | | | | 2,231 | | | | 2,850 | |
Shares to be issued for services | | | 10,500 | | | | 10,500 | | | | 31,500 | | | | 31,500 | |
Management and Consulting Fees | | | 15,000 | | | | 15,000 | | | | 45,000 | | | | 45,000 | |
TOTAL EXPENSES | | | 26,093 | | | | 26,506 | | | | 78,731 | | | | 79,350 | |
| | | | | | | | | | | | | | | | |
Loss from Operations | | | (26,093 | ) | | | (26,506 | ) | | | (78,731 | ) | | | (79,350 | ) |
| | | | | | | | | | | | | | | | |
Interest Expense | | | (674 | ) | | | (674 | ) | | | (2,012 | ) | | | (2,022 | ) |
LOSS BEFORE TAXES | | | (26,767 | ) | | | (27,180 | ) | | | (80,743 | ) | | | (81,372 | ) |
Provision for Income Taxes | | | - | | | | - | | | | - | | | | - | |
NET LOSS | | $ | (26,767 | ) | | $ | (27,180 | ) | | $ | (80,743 | ) | | $ | (81,372 | ) |
| | | | | | | | | | | | | | | | |
NET LOSS PER COMMON SHARE - BASIC & DILUTED | | $ | (0.26 | ) | | $ | (0.26 | ) | | $ | (0.78 | ) | | $ | (0.79 | ) |
| | | | | | | | | | | | | | | | |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC & DILUTED | | | 103,073 | | | | 103,073 | | | | 103,073 | | | | 103,073 | |
The accompanying notes are an integral part of these financial statements.
TREX ACQUISITION CORP. |
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY |
as of March 31, 2019 |
(Un-audited) |
| | | | | | | | | | | | | | | | | | |
| | Common Stock | | | Additional Paid in | | | Shares to be | | | Accumulated | | | | |
| | Shares | | | Amount | | | Capital | | | issued | | | Deficit | | | TOTAL | |
| | | | | | | | | | | | | | | | | | |
Balance June 30, 2017 | | | 103,073 | | | | 103 | | | | 815,996 | | | | 1,058,174 | | | | (2,054,623 | ) | | | (180,350 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net Loss | | | | | | | | | | | | | | | | | | | (27,064 | ) | | | (27,064 | ) |
Balance September 30, 2017 | | | 103,073 | | | $ | 103 | | | $ | 815,996 | | | $ | 1,058,174 | | | $ | (2,081,687 | ) | | $ | (207,414 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net Loss | | | | | | | | | | | | | | | | | | | (27,128 | ) | | | (27,128 | ) |
Balance December 31, 2017 | | | 103,073 | | | | 103 | | | | 815,996 | | | | 1,058,174 | | | | (2,108,815 | ) | | | (234,542 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net Loss | | | | | | | | | | | | | | | | | | | (27,180 | ) | | | (27,180 | ) |
Balance March 31, 2018 | | | 103,073 | | | | 103 | | | | 815,996 | | | | 1,058,174 | | | | (2,135,995 | ) | | | (261,722 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Shares to be issued for failed merger | | | | | | | | | | | | | | | 47,500 | | | | | | | | 47,500 | |
Net Loss | | | | | | | | | | | | | | | | | | | (67,704 | ) | | | (67,704 | ) |
Balance June 30, 2018 | | | 103,073 | | | | 103 | | | | 815,996 | | | | 1,105,674 | | | | (2,203,699 | ) | | | (281,926 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net Loss | | | | | | | | | | | | | | | | | | | (26,863 | ) | | | (26,863 | ) |
Balance September 30, 2018 | | | 103,073 | | | $ | 103 | | | $ | 815,996 | | | $ | 1,105,674 | | | $ | (2,230,562 | ) | | $ | (308,789 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net Loss | | | | | | | | | | | | | | | | | | | (27,112 | ) | | | (27,112 | ) |
Balance December 31, 2018 | | | 103,073 | | | $ | 103 | | | $ | 815,996 | | | $ | 1,105,674 | | | $ | (2,257,674 | ) | | $ | (335,901 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net Loss | | | | | | | | | | | | | | | | | | | (26,767 | ) | | | (26,767 | ) |
Balance March 31, 2019 | | | 103,073 | | | $ | 103 | | | $ | 815,996 | | | $ | 1,105,674 | | | $ | (2,284,441 | ) | | $ | (362,668 | ) |
The accompanying notes are an integral part of these financial statements.
TREX ACQUISITION CORP. | |
CONSOLIDATED STATEMENTS OF CASH FLOWS | |
for the nine months ended March 31, | |
(Un-audited) | |
| | | | | | |
| | 2019 | | | 2018 | |
OPERATING ACTIVITIES | |
Net Income (Loss) | | $ | (80,743 | ) | | $ | (81,372 | ) |
Shares to be issued for services | | | 31,500 | | | | 31,500 | |
Change in Related Party Advances | | | 50,261 | | | | 47,023 | |
Change Accounts Payable and Accrued Expenses | | | (1,018 | ) | | | 2,849 | |
Net Cash Used by Operating Activities | | | - | | | | - | |
| | | | | | | | |
FINANCING ACTIVITIES: | | | | | | | | |
Proceeds from common stock subscriptions | | | | | | | | |
Proceeds from notes payable related party | | | - | | | | - | |
Net cash provided by financing activities | | | - | | | | - | |
NET INCREASE (DECREASE) IN CASH | | | - | | | | - | |
| | | | | | | | |
CASH AT BEGINNING OF PERIOD | | | - | | | | - | |
| | | | | | | | |
CASH AT END OF PERIOD | | $ | - | | | $ | - | |
| | | | | | | | |
Supplemental Cashflow Information | | | | | | | | |
Interest Paid | | $ | - | | | $ | - | |
Taxes Paid | | $ | - | | | $ | - | |
The accompanying notes are an integral part of these financial statements.
TREX ACQUISITION CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
March 31, 2019
NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS
TREX Acquisition Corp. (The “Company”) was formed on January 16, 2008 in the state of Nevada under the name Plethora Resources, Inc. as a development stage enterprise. The Company later changed its name to Sync2 Networks Corp. then on March 20, 2014 to T-REX Acquisition Corp. The Company was originally organized to engage in the business of consulting to oil and gas exploration companies interested in obtaining exploration and production licenses at auction for oil and gas properties in Russia.
The Company consists of itself and its 100% owned subsidiary Sync2 Networks International Ltd.
On April 7, 2014, our Board of Directors deemed it in the best interests of the Company and its shareholders to domesticate our subsidiary, Sync2 International Ltd., as a corporation formed under the laws of Malta to a corporation formed under the laws of the State of Nevada (the “Domestication”), which under Nevada statutory law involves the transfer of an existing corporation from one jurisdiction to another whereby Sync2 Networks International Ltd. shall cease all operations in Malta. On May 1, 2014, we filed Articles of Domestication with the Nevada Secretary of State effecting the domestication of Sync2 International Ltd. as a corporate entity formed under the laws of the State of Nevada, which domestication provides that Sync2 International Ltd. as domesticated in the State of Nevada shall be the same entity as Sync2 International Ltd. organized under the laws of Malta.
The Company’s business plan is to find a merger candidate and become an operating company or to be a corporate governance and management company.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
Certain information and note disclosures normally included in our annual financial statements prepared in accordance with generally accepted account principles have been condensed or omitted. These consolidated financial statements should be read in conjunction with a reading of the financial statements and notes there included in our annual report on form 10k for the fiscal year end June 30, 2019, as filed with the US Securities and Exchange Commission.”
The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). 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. Actual results could differ from those estimates.
Management further acknowledges that it is solely responsible for adopting sound accounting practices, establishing and maintaining a system of internal accounting control and preventing and detecting fraud. The Company’s system of internal accounting control is designed to assure, among other items, that 1) recorded transactions are valid; 2) valid transactions are recorded; and 3) transactions are recorded in the proper period in a timely manner to produce financial statements which present fairly the financial condition, results of operations and cash flows of the Company for the respective periods being presented
Determination of Bad Debts
The Company’s policy is to analyze the collectability of Accounts and Notes Receivable on a monthly basis to determine whether any allowance for doubtful accounts is necessary. Once the allowance has been determined the offset is booked to bad debt expense and subsequently if the account is deemed to be a bad debt, it is written off the allowance for doubtful accounts.
Principles of Consolidation
The accounts include those of the Company and its 100% owned subsidiary. All intercompany transactions have been eliminated. At this time, SYNC2 International LTD has no operations, assets or liabilities.
Use of estimates
The preparation of financial statements in conformity with generally accepted accounting principles 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. Significant estimates include the estimated useful lives of property and equipment. Actual results could differ from those estimates.
Cash equivalents
The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.
Fair value of financial instruments
The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (U.S.) GAAP, and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:
Level 1 | Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. |
| |
Level 2 | Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. |
| |
Level 3 | Pricing inputs that are generally unobservable inputs and not corroborated by market data. |
The carrying amount of the Company’s financial assets and liabilities, such as cash, and accrued expenses approximate their fair value because of the short maturity of those instruments. The Company’s notes payable approximate the fair value of such instruments based upon management’s best estimate of interest rates that would be available to the Company for similar financial arrangements at March 31, 2019.
The Company does not have any assets or liabilities measured at fair value on a recurring or a non-recurring basis.
Equipment
Equipment is recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation of equipment is computed by the straight-line method (after taking into account their respective estimated residual values) over the assets estimated useful life of three (3) or seven (7) years. Upon sale or retirement of equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in statements of operations.
Stock based compensation
The Company accounts for stock-based compensation in accordance with ASC Section 718 Compensation – Stock Compensation. Under the fair value recognition provisions of ASC 718 stock-based compensation is measured at the grant date based on the fair value of the award and is recognized as expensed ratably over the requisite service period/vesting period.
The company accounts for its non-employee stock-based compensation in accordance with ASC Section 505 Equity Based Payments to Non-Employees. Under the fair value recognition provisions of ASC 505, stock-based compensation cost is measured at the earlier of the purchase commitment or performance completions, based on the fair value of the award, and is recognized as expense as purchase commitment is settled.
Commitments and contingencies
The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated. Since March 31, 2019 and through the date of filing, there have been no intervening lawsuits, claims or judgments filed.
Revenue recognition
The Company follows paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company will recognize revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured.
Net income (loss) per common share
Net income (loss) per common share is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock and potentially outstanding shares of common stock during the period. The weighted average number of common shares outstanding and potentially outstanding common shares assumes that the Company incorporated as of the beginning of the first period presented.
There were 1,835,835 potentially dilutive shares outstanding as of March 31, 2019 resulting from shares to be issued per the conversion of related party debt (see Note 4). We also had 450,000 of shares to be issued for compensation that were unissued as of March 31, 2019. We also had outstanding warrants that could convert into 187,500 shares of common stock as of March 31, 2019. At the end of both periods the potentially dilutive shares were excluded because the effect would have been anti-dilutive.
Cash flows reporting
The Company adopted paragraph 230-10-45-24 of the FASB Accounting Standards Codification for cash flows reporting, classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method (“Indirect method”) as defined by paragraph 230-10-45-25 of the FASB Accounting Standards Codification to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments. The Company reports the reporting currency equivalent of foreign currency cash flows, using the current exchange rate at the time of the cash flows and the effect of exchange rate changes on cash held in foreign currencies is reported as a separate item in the reconciliation of beginning and ending balances of cash and cash equivalents and separately provides information about investing and financing activities not resulting in cash receipts or payments in the period pursuant to paragraph 830-230-45-1 of the FASB Accounting Standards Codification.
Advertising Costs
The Company expenses the cost of advertising and promotional materials when incurred. Total Advertising costs were zero for all periods.
Subsequent events
The Company follows the guidance in Section 855-10-50 of the FASB Accounting Standards Codification for the disclosure of subsequent events. The Company will evaluate subsequent events through the date when the financial statements were issued. Pursuant to ASU 2010-09 of the FASB Accounting Standards Codification, the Company as an SEC filer, considers its financial statements issued when they are widely distributed to users, such as through filing them on EDGAR.
NOTE 3 – GOING CONCERN
As reflected in the accompanying financial statements, the Company had an accumulated deficit of $2,284,441 and a working capital deficit of $394,168 as of March 31, 2019.
While the Company is attempting to commence operations and generate revenues, the Company’s cash position may not be significant enough to support the Company’s daily operations. Management intends to raise additional funds by way of a public or private offering. Management believes that the actions presently being taken to further implement its business plan and generate revenues provide the opportunity for the Company to continue as a going concern. While the Company believes in the viability of its strategy to generate revenues and in its ability to raise additional funds, there can be no assurances to that effect and there is substantial doubt about the Company’s ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate revenues.
The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
NOTE 4 – RELATED PARTY TRANSACTIONS
On June 24, 2014, the company entered into an unsecured promissory note with Lazarus asset management, LLC. in the amount of $34,550 with an interest rate of 5% per annum and a due date of June 24, 2015. As of March 31, 2019, the accrued interest on this note was $8,244.
On June 24, 2014, the company entered into an unsecured promissory note with Squardron Marketing, Inc. in the amount of $19,350 with an interest rate of 5% per annum and a due date of June 24, 2015. As of March 31, 2019, the accrued interest on this note was $4,607.
On July 1, 2014, the Company entered into management agreements with Squadron Marketing, Inc. and Lazarus Asset Management, LLC for $30,000 each annually to assist the Company in obtaining potential merger candidates, negotiating the merger agreements, drafting, along with the Company’s attorney, offering documents, and assisting with closing the transactions. The agreements resulted in Management Fee expense of $15,000 for the quarter ended March 31, 2019 and $45,000 for the nine months ended March 31, 2018. These amounts were unpaid at the end of the quarter and nine months ended March 31, 2019.
Free office space
The Company has been provided office space by its Chief Executive Officer at no cost. The management determined that such cost is nominal and did not recognize the rent expense in its financial statements.
Due to Related Parties
During the quarter ended March 31, 2017, the Company was advanced $0 in cash to pay for operations by certain related parties and incurred management fees to these same related parties $15,000. During the nine months ended March 31, 2018, the Company was advanced $0 in cash to pay for operations by certain related parties and incurred management fees to these same related parties $45,000.
On January 1, 2015, the company entered into a management agreement with Frank Horkey for a period of 5 years and will issue 350,000 shares of its common stock as consideration and is accounted for on the balance sheet as shares to be issued and will be expensed over the life of the contract (5 years), which resulted in a prepaid consulting expense of $210,000. They were valued on the date of the agreement and the stock price at that time was $.60. As of March 31, 2019 the shares were unissued and recorded as shares to be issued.
All of these Related Party Transactions have since been converted into shares of the Company’s Common Stock, as of the date of this filing.
NOTE 5 – COMMON STOCK
On January 1, 2015, the company entered into a management agreement for a period of 2 years and will issue 350,000 shares of its common stock as consideration and is accounted for on the balance sheet as shares to be issued and will be expensed over the life of the contract (5 years), which resulted in a prepaid consulting expense of $210,000. They were valued on the date of the agreement and the stock price at that time was $.60.
On January 1, 2015, the company entered into a management agreement for a period of 2 years and will issue 100,000 shares of its common stock as consideration and is accounted for on the balance sheet as shares to be issued and will be expensed over the life of the contract (2 years), which resulted in a prepaid consulting expense of $60,000. They were valued on the date of the agreement and the stock price at that time was $.60.
NOTE 6 – WARRANTS
On May 3, 2014, it was resolved that the Company shall offer 250,000 Units at a price of $.80 per unit. Each Unit shall consists of (a) one (1) share of common stock and (b) a combination of series A warrants (which may be exercised within three (3) years) and series B warrants exercised within five (5) years of the consummation of a merger.
On May 14, 2014, the company entered into a subscription agreement for 157,500 units at $.80 per share for a total of $125,000 Each unit consists of one (1) share of common stock and one (1) series A warrant to purchase one share of common stock at $1.25 per share. Each A warrant expires three years from the date of issuance.
On May 14, 2014, the company entered into a subscription agreement for 32,000 units at $.80 per share for a total of $25,000. Each unit consists of one (1) share of common stock and one (1) series A warrant to purchase one share of common stock at $1.25 per share Each A warrant expires three years from the date of issuance.
On July 14, 2014, the company entered into a subscription agreement for 62,500 units at $.80 per share for a total of $50,000. Each unit consists of one (1) share of common stock, and two (2) Series A warrants to purchase one (1) share of common stock at $.65 per share and one (1) series B warrant to purchase one (1) share of common stock at $.80. Each series A warrant expires three years from the consummation of a merger and each series B warrant expires 5 years from the consummation a merger.
The Company may call the B Warrants at such point the quoted market closing price is at least $2.50 for 20 consecutive trading days. In the event the Company calls the Warrants, it shall immediately notify holders of the Warrants of the call. Warrants holders will be granted a period of 45 calendar days to remit payment of $.80 per share. The warrants were valued using a Black Scholes calculation.
The inputs for series A used a price $.59, a strike price range of .65 – 1.25, maturity 3 years, a risk-free interest rate of 3.9% and a beta of 50% estimated and were valued at $.202. The inputs for series B used a price $.59, a strike price of .80, maturity 5 years, a risk-free interest rate of 3.9% and a beta of 50% estimated and were valued at $.232.
As of the filing date of this annual report, 189,500 A Warrants have expired; only 125,000 A Warrants and the 62,500 B Warrants remain effective since the Company has yet to consummate a merger.
The following is the outstanding warrant activity:
| | | | Warrants - Common Share Equivalents | | | Weighted Average Exercise price | | | Warrants exercisable - Common Share Equivalents | | | Weighted Average Exercise price | | | Weighted average life in years | |
Outstanding June 30, 2017 | | | | | 377,000 | | | $ | 0.75 | | | | 375,500 | | | $ | 0.75 | | | | 2.26 | |
Additions | | Granted | | | - | | | | - | | | | - | | | | - | | | | | |
Expired | | Expired | | | 189,500 | | | $ | 0.75 | | | | 189,500 | | | $ | 0.75 | | | | 2.01 | |
| | Exercised | | | - | | | | - | | | | - | | | | - | | | | | |
Outstanding June 30, 2018 | | | | | 187,500 | | | $ | 0.75 | | | | 187,500 | | | $ | 0.75 | | | | 3.67 | |
Additions | | Granted | | | - | | | | - | | | | - | | | | - | | | | | |
Expired | | Expired | | | - | | | $ | - | | | | - | | | | - | | | | | |
| | Exercised | | | - | | | | - | | | | - | | | | - | | | | | |
Outstanding March 31, 2019 | | | | | 187,500 | | | $ | 0.75 | | | | 187,500 | | | $ | 0.75 | | | | 3.67 | |
NOTE 7 – SUBSEQUENT EVENTS
The Company has evaluated all events that occurred after the balance sheet date through the date when the financial statements were issued to determine if they must be reported. The Management of the Company determined that the following subsequent events needed to be disclosed.
2020 Stock Issuances
On January 21, 2020, the Company resolved to issue and issued (a) 1,835,835 shares of its common stock in connection with prior Boardwalk convertible debt conversions, (b) 450,000 shares of its common stock in connection with management compensation, (c) 250,000 shares of its common stock to unit subscribers in connection with the failed Kerr transaction, and (d) 350,000 shares of its common stock in connection with a 2018 private sale of 350,000 shares to a related party for $47,500.
On March 12. 2020, the Company resolved to issue and issued 300,000 shares of its common stock in connection to professional service providers pursuant to their respective engagement agreements.
On June 24, 2020, the Company resolved to issue and issued 8,900,000 shares of its common stock in connection with the conversion of $890,000 in debt owed to consultants pursuant to a July 1, 2014 consulting agreement.
On November 16, 2020 the company issued 500,000 were issued to the estate of a former shareholders.
2020 TRXA Merger Sub Inc.
March 13, 2020, the Company incorporated a wholly-owned subsidiary, TRXA Merger Sub Inc., a Delaware corporation (“Merger Sub”) in order to facilitate the acquisition of a Software-as-a-Service internet platform business. The Sole Officer and Director currently serves as the sole officer and director of the Merger Sub. As of the date of this filing, neither the Company nor the Merger Sub have entered into a definitive agreement or non-binding letter of intent to acquire a company.
On November 20, 2020, the Company issued 1,300,000 shares of its common stock in connection with a prepayment of an $80,000 future expense advanced by two related parties.
During the Fiscal year ended June 30, 2021 two related parties paid expenses on behalf of the company in the amount of $93,496.
In accordance with the terms and provisions of that certain Settlement Agreement dated October 9, 2020 (the “Settlement Agreement”), on November 20, 2020 TREX Acquisition Corp. issued to Squadron Marketing LLC, Four Hundred Thousand Shares (400,000) of the Company’s common stock and to Lazarus Asset Management LLC, Four Hundred Thousand Shares (400,000) of its common stock.
ITEM 9. CHANGES AND DISAGREEMENT WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
DISMISSAL OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Effective June 26, 2014, we dismissed George Stewart, CPA ("Stewart") as our independent registered public accounting firm. We engaged Terry L. Johnson, CPA ("Johnson") as our principal independent registered public accounting firm effective June 27, 2014. The decision to change our principal independent registered public accounting firm was approved by our BoardAs of Directors.
The reports of Stewart on our financial statements for fiscal years ended June 30, 2013 and 2012 (which included the balance sheet as of June 30, 2013 and the statement of operations, cash flows and stockholders' equity as of June 30, 2013), for the past fiscal year, did not contain an adverse opinion or a disclaimer of opinion, nor qualified or modified as to uncertainty, audit scope or accounting principles, other than to state that there is substantial doubt as to our ability to continue as a going concern. During our fiscal year ended June 30, 2013 and during the subsequent period through to the date of Stewart's resignation,this filing, there wereare no disagreements between us and Stewart, whether or not resolved,our accountants on any matter of accounting principles, practices or practices, financial statement disclosure, or auditing scope or procedure, which, if not resolved to the satisfaction of Stewart, would have caused Stewart to make reference thereto in its report on our audited financial statements.
We provided Stewart with a copy of a Current Report on Form 8-K and requested that Stewart furnish us with a letter addressed to the Securities and Exchange Commission stating whether or not Stewart agrees with the statements made in the Current Report on Form 8-K with respect to Stewart and, if not, stating the aspects with which they do not agree. We received the requested letter from Stewart wherein he confirmed his agreement to our disclosures in the Current Report with respect to Stewart. A copy of Stewart's letter was filed as an exhibit to the Current Report as filed with the Securities and Exchange Commission.
In connection with our appointment of Johnson as our principal registered accounting firm at this time, we have not consulted Johnson on any matter relating to the application of accounting principles to a specific transaction, either completed or contemplated, or the type of audit opinion that might be rendered on our financial statements during the two most recent fiscal years (June 30, 2013 and 2012) and subsequent interim period through the date of engagement.
There are no reportable disagreements on accounting or financial disclosure issues. In June 2014, we engaged Terry L. Johnson to audit our financial statements for the period ended June 30, 2014. Prior to his engagement, we had not consulted with George Stewart with respect to: (i) the application of accounting principles to a specified transaction, either completed or proposed; (ii) the type of audit opinion that might be rendered on our financial statements; or (iii) any matter that was either the subject of disagreement (as defined in Item 304(a)(1)(iv) of Regulation S-K) or a reportable event (as described in Item 304(a)(1)(iv) of Regulation S-K).
disclosure.ITEM 9A. CONTROLS AND PROCEDURES
EVALUATION OF DISCLSOUREDISCLOSURE CONTROLS AND PROCEDURES
We maintain controls and procedures that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management including our principal executive and principal financial officers, as appropriate, to allow timely decisions regarding required disclosures. Based upon their evaluation of those controls and procedures performed as of the end of the periodperiods covered by this report, our principal executive officer and our principal financial officer concluded that our disclosure controls and procedures were not effective.
MANAGEMENT’S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Our Chief Executive Officer and our Chief Financial Officer are responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) and 15d-15(f) promulgated under the Securities Exchange Act of 1934 as a process designed by, or under the supervision of, our principal executive and principal financial officers and effected by our 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 our assets; |
· | Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of management and our directors; and |
· | Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements. |
Because of its inherent limitations, our internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. 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.
Our Chief Executive Officer and our Chief Financial Officer assessed the effectiveness of our internal control over financial reporting as of June 30, 2014.2019. In making this assessment, management used the criteria set forth by the 1992 Committee of Sponsoring Organizations of the Treadway Commission (“2013 COSO”) in Internal Control — Integrated Framework.
Based on our assessment, our Chief Executive Officer and our Chief Financial Officer believe that, as of June 30, 2014,2019, our internal control over financial reporting is not effective based on those criteria, due to the following:
· | Deficiencies in Segregation of Duties. Lack of proper segregation of functions, duties and responsibilities with respect to our cash and control over the disbursements related thereto due to our very limited staff, including our accounting personnel. |
· | Deficiencies in the staffing of our financial accounting department. The number of qualified accounting personnel with experience in public company SEC reporting and GAAP is limited. This weakness does not enable us to maintain adequate controls over our financial accounting and reporting processes regarding the accounting for non-routine and non-systematic transactions. There is a risk that a material misstatement of the financial statements could be caused, or at least not be detected in a timely manner, by this shortage of qualified resources. |
In light of this conclusion and as part of the preparation of this report, we have applied compensating procedures and processes as necessary to ensure the reliability of our financial reporting. Accordingly, management believes, based on its knowledge, that (1) this report does not contain any untrue statement of a material fact or omit to state a material face necessary to make the statements made not misleading with respect to the periodperiods covered by this report, and (2) the financial statements, and other financial information included in this report, fairly present in all material respects our financial condition, results of operations and cash flows for the years and periods then ended.
This report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to the rules of the SEC that permit us to provide only management’s report in this report.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There were no significant changes in our internal control over financial reporting during the fourth quarter of the year ended June 30, 2014,2019, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
ITEM 9B. OTHER INFORMATION
EXECUTIVE OFFICERS AND DIRECTORS
Our directors and principal executive officers are as specified on the following table:
Name | | Age | | Position |
| | | | |
Warren GilbertFrank Horkey | | 6466 | | President/Chief Executive Officer, Secretary and aChief Financial Officer Director |
| | | | |
Frank Horkey | | 59 | | Vice President and a Director |
Mr. Gilbert has been our President/Chief Executive Officer, Secretary, Treasurer/Chief Financial Officer and a director since July 18, 2013. During the past ten years, Mr. Gilbert has been the president of Gilder Funding Corporation, a venture capital and private equity investment firm located in Miami, Florida. Gilder Funding Corporation has focused its investment activity primarily by providing seed capital and financial advice to starting and expanding companies. In addition, Mr. Gilbert is the money manager and managing director for New Amsterdam Investment Fund, an offshore hedge fund based in the Bahamas. Mr. Gilbert is a portfolio manager.
Mr. Gilbert is a Grand Founder of the Miami Jewish Home at Douglas Gardens and a member of its board of directors. He also provides philanthropic support to Mount Sinai.
Mr. Gilbert graduated from New York University with a Bachelor of Arts degree. Mr. Gilbert also graduated from the Stern School of Business at New York University.
Mr. Horkey has been our Vice PresidentPresident/Secretary and Chief Financial Officer and a director since January 14, 2014. During the past tenforty years, Mr. Horkey has been engaged as an auditor and a certified public accountant. Mr. Horkey currently is the founder and manager of Horkey & Associates, which is a public accounting firm located in West Broward, Florida. In 1978, Mr. Horkey commenced his career with Touche Ross (which is now called Deloitte Touche), an international public accounting firm, in Miami, Florida. After three years, he started his own public accounting firm and through subsequent mergers was a partner through 1991 in one of the largest accounting firms in western Broward County. Mr. Horkey has taught courses on accounting, auditing and taxation issues, and has written a variety of articles on diverse tax topics, such as home office deductions, and accounting and auditing topics such as audits of small businesses. Mr. Horkey'sHorkey’s clients have included large corporations, small businesses, professionals, not-for-profit organizations, municipalities and other governmental entities. Mr. Horkey was the audit partner on one of the pilot single audits performed on a large governmental unit in 1981, and was involved in the development and application of the single audit process with the Office of Management and Budget and the General Accounting Office.
Mr. Horkey earned a Bachelor of Science in Accounting from Florida Atlantic University and has been certified by the State of Florida as a Certified Public Accountant since April 1979. He is a member of the American Institute of Certified Public Accountants as well as the Florida Institute of Certified Public Accountants. He also holds the designation as Certified in Florida Sales Tax, a specialty designation awarded jointly by the Florida Board of Accountancy and the Florida Institute of Certified Public Accountants.
Mr. Horkey is also a 1993 graduate of Leadership Broward and 1987 President of the Sunrise Chamber of Commerce. He has been a member of the Broward Workforce Development Board since 1993 and Chair of its Audit Committee.Committee and was Board Chair for 2015-2016. Mr. Horkey is the 1995 recipient of the "Small“Small Business Person of the Year"Year” award from the Sunrise Chamber of Commerce, and a two-time finalist for the South Florida "Up“Up and Comers"Comers” Award in accounting. He was also Chair of the Sole Practitioners Committee of the Florida Institute of Certified Public Accountants for two years.
Mr. Horkey'sHorkey’s community involvement also extends into the education environment. He was a member of the School Board of Broward County Audit Committee for ten years, Chair of the Sunrise Chamber of Commerce Education Committee for three years, and co-founder of the Sunrise Chamber "One“One for the Kids"Kids” Program (which matches business people who have specific skills with schools and/or students with matching needs). He also worked on the Broward Education Planning Initiative, which was the first countywide effort to address school overcrowding.
Mr. Horkey was Treasurer of Broward Education Foundation for four years including the period during which the Foundation administered the Marjory Stoneman Douglas Victims fund of over $10,700,000. He is currently Board Chair of Broward Education Foundation.All directors hold office until the completion of their term of office, which is not longer than one year, or until their successors have been elected. All officers are appointed annually by the board of directors and, subject to employment agreements (which do not currently exist), serve at the discretion of the board. Currently, our directors receive no compensation.
There is no family relationship between any of our officers or directors. For the past ten years, there have been no orders, judgments, or decrees of any governmental agency or administrator, or of any court of competent jurisdiction, revoking or suspending for cause any license, permit or other authority to engage in the securities business or in the sale of a particular security or temporarily or permanently restraining any of our officers or directors from engaging in or continuing any conduct, practice or employment in connection with the purchase or sale of securities, or convicting such person of any felony or misdemeanor involving a security, or any aspect of the securities business or of theft or of any felony.
Our Board of Directors does not currently have a compensation committee or nominating and corporate governance committee because, due to the Board of Director’s composition and our relatively limited operations, the Board of Directors believes it is able to effectively manage the issues normally considered by such committees. Our Board of Directors may undertake a review of the need for these committees in the future.
Audit Committeeand Financial Expert
Our Board of Directors has not established an audit committee. The respective role of an audit committee has been conducted by our Board of Directors. We intend to establish an audit committee during fiscal year 2013/14.as soon as it is practical to do so.. When established, the audit committee'scommittee’s primary function will be to provide advice with respect to our financial matters and to assist our Board of Directors in fulfilling its oversight responsibilities regarding finance, accounting, and legal compliance. The audit committee'scommittee’s primary duties and responsibilities will be to: (i) serve as an independent and objective party to monitor our financial reporting process and internal control system; (ii) review and appraise the audit efforts of our independent accountants; (iii) evaluate our quarterly financial performance as well as its compliance with laws and regulations; (iv) oversee management'smanagement’s establishment and enforcement of financial policies and business practices; and (v) provide an open avenue of communication among the independent accountants, management and our Board of Directors.
We do not currently have a Code of Ethics that applies to all employees, including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. We plan to adopt a Code of Ethics.
Our director is not deemed independent. Our director also holds positions as an officer.
SUMMARY COMPENSATION TABLE
The table set forth below summarizes the annual and long-term compensation for services in all capacities to us payable to our principal executive officers during the fiscal years ended June 30, 20142019 and June 30, 2013.
2018.Summary Compensation Table
| Name and Principal Position | | Year | | Salary ($) | | | Bonus ($) | | | Stock Awards ($) | | | Option Awards ($) | | | Non-Equity Incentive Plan Compensation ($) | | | Nonqualified Deferred Compensation Earnings ($) | | | All Other Compensation ($) | | | Total ($) | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Warren Gilbert, President/CEO, | | 2013 | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | |
| Secretary, Treasurer/CFO | | 2014 | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | |
| Frank Horkey, Vice President | | 2014 | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | |
Name and Principal Position | | Fiscal Years | | Salary ($) | | | Bonus ($) | | | Stock Awards ($) | | | Option Awards ($) | | | Non-Equity Incentive Plan Compensation ($) | | | Nonqualified Deferred Compensation Earnings ($) | | | All Other Compensation ($) | | | Total ($) | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Frank Horkey, Note 1) | | 2015-2019 | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | |
President/Secretary/Treasurer/CFO | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Note 1) On January 1, 2015, the company entered into a management agreement for a period of 5 years and will issue 350,000 shares of its common stock as consideration and is accounted for on the balance sheet as shares to be issued and will be expensed over the life of the contract (5 years), which resulted in a prepaid consulting expense of $210,000. They were valued on the date of the agreement and the stock price at that time was $.60. As of June 30, 2019, these shares remained unissued.
OUTSTANDING EQUITY AWARDS
We do not have any effective stock option or other equity award plans. Therefore, as of June 30, 2014,2019, the following named executive officers had the following unexercised options, stock that has not vested, and equity incentive plan awards:
| | | Option Awards | | | Stock Awards | |
| Name | | Number of Securities Underlying Unexercised Options # Exercisable | | | # Un-exercisable | | | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Options | | | Option Exercise Price | | | Option Expiration Date | | | Number of Shares or Units of Stock Not Vested | | | Market Value of Shares or Units Not Vested | | | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights Not Vested | | | Value of Unearned Shares, Units or Other Rights Not Vested | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Warren Gilbert Pres/CEO Secretary CFO | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | |
| Frank Horkey, Vice Pres | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | |
| | Option Awards | | | | | | Stock Awards | |
Name | | Number of Securities Underlying Unexercised Options # Exercisable | | | # Un-exercisable | | | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Options | | | Option Exercise Price | | | Option Expiration Date | | | Number of Shares or Units of Stock Not Vested | | | Market Value of Shares or Units Not Vested | | | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights Not Vested | | | Value of Unearned Shares, Units or Other Rights Not Vested | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Frank Horkey | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | |
Pres/CEO Secretary CFO | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | |
There are no arrangements or plans in which we provide pension, retirement or similar benefits for directors or executive officers. We do not have any material bonus or profit sharingprofit-sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers.
Our directors received the following compensation for their service as directors during the fiscal years ended June 30, 20142019 and June 30, 2013:
| | | Fees Earned or Paid in Cash $ | | | Stock Awards $ | | | Option Awards $ | | | Non-Equity Incentive Plan Compensation $ | | | Non-Qualified Deferred Compensation Earnings $ | | | All Other Compensation $ | | | Total $ | |
| | | | | | | | | | | | | | | | | | | | | | |
Warren Gilbert 2014 2013 | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | |
Frank Horkey 2014 | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | |
2018: | | Fees Earned or Paid in Cash $ | | | Stock Awards $ | | | Option Awards $ | | | Non-Equity Incentive Plan Compensation $ | | | Non-Qualified Deferred Compensation Earnings $ | | | All Other Compensation $ | | | Total $ | |
| | | | | | | | | | | | | | | | | | | | | |
Frank Horkey 2014-2019 | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | |
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
On approximately August 14, 2013, there was a change in our control. In accordance with the terms and provisions of that certain escrow agreement dated March 31, 2012 (the "Escrow Agreement"“Escrow Agreement”), Warren Gilbert, who isbecame our current President/Chief Executive Officer, Secretary, Treasurer/Chief Financial Officer and sole member of the Board of Directors, when he acquired, acquired in a private transaction an aggregate of 62,863,800 shares of our pre-Reverse Stock Split restricted common stock representing an equity interest of then 61% of the total issued and outstanding shares. The amount of consideration paid was $325,000 and were outside funds from unrelated parties. The shares of common stock were acquired as follows: (i) 51,000,000 pre-Reverse Stock Split shares from Artur Etozov; and (ii) 11,863,800 pre-Reverse Stock Split shares from approximately ten separate shareholders each holding less than 5% of the total issued and outstanding.
On January 21, 2020, Frank Horkey Pres/CEO, Secretary CFO and sole director was issued 350,000 shares of the Company’s common stock pursuant to a certain Management Agreement dated January 1, 2015. Mr. Horkey has no options to purchase any stock.
The following table sets forth certain information regarding the beneficial ownership of our common stock as of the date of this Annual ReportJune 30, 2019 by each person or entity known by us to be the beneficial owner of more than 5% of the outstanding shares of common stock, each of our directors and named executive officers, and all of our directors and executive officers as a group.
| | Name and Address of Beneficial Owner | | Amount and Nature of Beneficial Owner | | | |
| | | | | | | |
Officers and Directors | | | | | | | |
Common Stock | | Plantation, Florida 33322 | | | | | 3.2461 | % |
| | | | | | | | |
Common Stock | | All directors and named executive officers as a group (1 person) | | 62,864 shares | | | 3.2461 | % |
Beneficial Owners 5% or Greater | | | | | | | | |
None | | | | | | | | |
________
(1) | Percentage of beneficial ownership of our common stock is based on 1,938,881103,073 shares of common stock outstanding as of the date of this Annual Report, which total issued and outstanding were reduced in accordance with the Reverse Stock Split. |
Other than as described above, our management is not aware of any arrangements which may result in “changes in control” as that term is defined by the provisions of Item 403(c) of Regulation S-K.
Related party transactions.
None of the following parties has, since our date of incorporation, had any material interest, direct or indirect, in any transaction with us or in any presently proposed transaction that has or will materially affect us:
1. | Any of our directors or officers; |
2. | Any person proposed as a nominee for election as a director; Any person who beneficially owns, directly or indirectly, shares carrying more than 10% of the voting |
3. | rights attached to our outstanding shares of common stock; |
4. | Any member of the immediate family of any of the foregoing persons. |
There have been no other related party transactions, or any other transactions or relationships required to be disclosed pursuant to Item 404 of Regulation S-K.
On January 1, 2015, the company entered into a management agreement with Frank Horkey for a period of 5 years and will issue 350,000 shares of its common stock as consideration and is accounted for on the balance sheet as shares to be issued and will be expensed over the life of the contract (5 years), which resulted in a prepaid consulting expense of $210,000. They were valued on the date of the agreement and the stock price at that time was $.60. As of June 30, 2019 the shares were unissued and recorded as shares to be issued
ITEM 14. PRINCI[PALPRINCIPAL ACCOUNTING FEES AND SERVICES
The aggregate fees billed for the fiscal years ended June 30, 20142019 and June 30, 20132018 for professional services rendered by the principal accountant for the audit of our annual financial statements and quarterly review of the financial statements included in our Form 10-K or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years were $7,500$10,000 and $9,000,$10,000, respectively.
Audit-RelatedOther Audit Fees
For the fiscal years ended June 30, 20142019 and June 30, 2013,2018, there were no fees billed for services reasonably related to the performance of theother audit or review of the financial statements outside of those fees disclosed above under “Audit Fees.”
For the fiscal years ended June 30, 20142019 and June 30, 2013,2018, there were no fees billed for services for tax compliance, tax advice, and tax planning work by our principal accountants.
Pre-Approval Policies and Procedures
Prior to engaging our accountants to perform a particular service, our Board of Directors obtains an estimate for the service to be performed. All of the services described above were approved by the Board of Directors in accordance with its procedures.
PART IV
(a) Financial Statements.
Included in Item 8
(b) Exhibits required by Item 601.
(b) | Exhibits required by Item 601. |
| | Description |
| | |
3.1 | | Articles of Incorporation incorporated by reference to Exhibit 3.1 of our Registration Statement on Form S-1 filed on July 25, 2008 |
3.3 | | Bylaws, incorporated by reference to Exhibit 3.1 of our Registration Statement on Form S-1 filed on April 18, 2011July 25, 2008 |
31.1 | | Certification of Principal Executive Officer Required By Rule 13a-14(A) of the Securities Exchange Act of 1934, As Amended, As Adopted Pursuant To Section 302 of the Sarbanes-Oxley Act of 2002* |
31.2 | | Certification ofand Principal Financial Officer Required By Rule 13a-14(A) of the Securities Exchange Act of 1934, As Amended, As Adopted Pursuant To Section 302 of the Sarbanes-Oxley Act of 2002* |
32.1 | | Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002* |
32.2 | | Certification ofand Principal Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002* |
101.INS | | XBRL Instance Document** |
101.SCH | | XBRL Taxonomy Schema** |
101.CAL | | XBRL Taxonomy Calculation Linkbase** |
101.DEF | | XBRL Taxonomy Definition Linkbase** |
101.LAB | | XBRL Taxonomy Label Linkbase** |
101.PRE | | XBRL Taxonomy Presentation Linkbase** |
** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| TrexTREX Acquisition Corp. | |
| | | |
September 30, 2014June 21, 2021 | By: | /s/ Warren GilbertFrank Horkey | |
| | Warren GilbertFrank Horkey | |
| Its: | President, Director | |
| | (Principal Executive Officer) | |
| | | |
September 30, 2014June 21, 2021 | By: | /s/ Warren GilbertFrank Horkey | |
| | Warren GilbertFrank Horkey | |
| Its: | Chief Financial Officer, Secretary, Treasurer, Director | |
| | (Principal Financial and Accounting Officer) | |
In accordance with 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.
September 30, 2014June 21, 2021 | By: | /s/ Warren GilbertFrank Horkey | |
| | Frank Horkey | |
| Its: | Director | |
| |
| | Warren Gilbert | |
| Its: | Director | 27 |
September 30, 2014 | By: | /s/ Frank Horkey | |
| | Frank Horkey | |
| Its: | Director | |
