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Winvest Group Ltd. – ‘10-12G/A’ on 10/19/20

On:  Monday, 10/19/20, at 1:04pm ET   ·   Accession #:  1213900-20-31982   ·   File #:  0-56204

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  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

10/19/20  Zyrox Mining International Inc.   10-12G/A               2:372K                                   EdgarAgents LLC/FA

Amendment to Registration Statement   —   Form 10   —   Sect. 12(g) – SEA’34
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-12G/A    Amendment No. 1 to Form 10                          HTML    213K 
 2: EX-23       Consent of Independent Auditor                      HTML      4K 


‘10-12G/A’   —   Amendment No. 1 to Form 10
Document Table of Contents

Page (sequential)   (alphabetic) Top
 
11st Page  –  Filing Submission
"Description of Business
"Risk Factors
"Financial Information
"Description of Property
"Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters
"Directors and Executive Officers
"Executive Compensation
"Certain Relationships and Related Transactions and Director Independence
"Legal Proceedings
"Market Price of and Dividends on the Company's Common Equity and Related Stockholder Matters
"Recent Sales of Unregistered Securities
"Description of Company's Securities to Be Registered
"Indemnification of Directors and Officers
"Financial Statements and Supplementary Data
"Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
"Financial Statement and Exhibits

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Amendment No. 1

 

 

 
FORM 10

 

 

 

General Form for Registration of Securities of Small Business Issuers Under Section 12(g) of the Securities Exchange Act of 1934

 

ZYROX MINING INTERNATIONAL, INC.
(Exact Name Of Company As Specified In Its Charter)

 

Nevada   27-2052033
(State of Incorporation)   (I.R.S. Employer
Identification No.)
     
1185 Avenue of the Americas, 3rd Floor. New York, New York   10036
(Address of Principal Executive Offices)   (ZIP Code)

 

Company’s Telephone Number, Including Area Code: 646-768-8417

 

Securities to be Registered Under Section 12(g) of the Act: Common Stock, $0.001
(Title of Class)

 

Indicate by check mark whether the Company is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer ☐ Accelerated filer ☐
Non-accelerated filer ☐ Smaller reporting company ☒
  Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the Company 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. ☐

 

 

 

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TABLE OF CONTENTS

 

Item   Description   Page
         
ITEM 1.   DESCRIPTION OF BUSINESS   1
ITEM 1A.   RISK FACTORS   7
ITEM 2.   FINANCIAL INFORMATION   14
ITEM 3.   DESCRIPTION OF PROPERTY   15
ITEM 4.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS   16
ITEM 5.   DIRECTORS AND EXECUTIVE OFFICERS   18
ITEM 6.   EXECUTIVE COMPENSATION   18
ITEM 7.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE   18
ITEM 8.   LEGAL PROCEEDINGS   18
ITEM 9.   MARKET PRICE OF AND DIVIDENDS ON THE COMPANY’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS   19
ITEM 10.   RECENT SALES OF UNREGISTERED SECURITIES   19
ITEM 11.   DESCRIPTION OF COMPANY’S SECURITIES TO BE REGISTERED   19
ITEM 12.   INDEMNIFICATION OF DIRECTORS AND OFFICERS   20
ITEM 13.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA   21
ITEM 14.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE   30
ITEM 15.   FINANCIAL STATEMENT AND EXHIBITS   30

 

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Explanatory Note

 

This Amendment No.1 to Form 10-12G (the “Amendment”) amends the Form 10-12G of Zyrox Mining International, Inc. that was originally filed with the U.S. Securities and Exchange Commission on September 18, 2020.

 

The Amendment is being filed to update certain disclosures, and had no impact, whatsoever, on the Company’s financial statements or footnotes. For the convenience of the reader, this Amendment sets forth the Original Filing, as amended, in its entirety; however, except as described above, this Amendment only modifies, amends or updates ITEM 1; ITEM 1A; and ITEM 4. This Amendment does not modify, amend, or update any other disclosures or information presented in the Original Filing.

 

PART I

 

ITEM 1. DESCRIPTION OF BUSINESS

 

Some of the statements contained in this amended registration statement on Form 10 of Zyrox International Mining, Inc. (hereinafter the “Company”, “we” or “Zyrox”) discuss future expectations, contain projections of our plan of operation or financial condition or state other forward-looking information. In this amended registration statement, forward-looking statements are generally identified by the words such as “anticipate”, “plan”, “believe”, “expect”, “estimate”, and the like. Forward-looking statements involve future risks and uncertainties, there are factors that could cause actual results or plans to differ materially from those expressed or implied. These statements are subject to known and unknown risks, uncertainties, and other factors that could cause the actual results to differ materially from those contemplated by the statements. The forward-looking information is based on various factors and is derived using numerous assumptions. A reader, whether investing in the Company’s securities or not, should not place undue reliance on these forward-looking statements, which apply only as of the date of this amended registration statement. Important factors that may cause actual results to differ from projections include, for example:

 

  the success or failure of Management’s efforts to implement the Company’s plan of operation;
     
  the ability of the Company to fund its operating expenses;
     
  the ability of the Company to compete with other companies that have a similar plan of operation;
     
  the effect of changing economic conditions impacting our plan of operation;
     
  the ability of the Company to meet the other risks as may be described in future filings with the SEC.

 

General Background of the Company

 

Zyrox Mining International, Inc. (formerly Diversified Energy & Fuel, Inc. until August 15, 2012) was incorporated in the State of Nevada on June 3, 2009. Zyrox Mining International, Inc. began formal operations on June 3, 2009, with the principle purpose of developing, marketing and selling software products through the Internet, and to provide web based services for individuals and small business. During 2010, this business was discontinued and management focused on developing a biodegradable plastic opportunity.

 

The Company began trading as Riverdale Capital, Ltd. under the symbol “RICP” on June 3, 2009. Effective April 30, 2012 the Company changed its name to Diversified Energy & Fuel International, Inc and changed its name to Zyrox Mining International, Inc. on August 15, 2012.

 

On November 8, 2010, the Company entered into an agreement to acquire 100% of the Membership Interests of WSVPA Bio Products Incorporated, a Nevada LLC in consideration for 102,238,200 shares of common stock. After completion of their due diligence, WSPVA formally closed on the transaction on May 12, 2012. The Company subsequently received 500,000,000 Class “A” membership units and 1,000,000 Class “B” membership units representing 100% of the membership interest of WSPVA (dissolvingplastic.com) in return for 102,238,200 common shares of the Company and WSPVA is now a wholly owned subsidiary of the Company.

 

On August 17, 2010, the then Chief Executive Officer resigned and appointed Carl H. Kruse as sole Director and Chief Executive Officer. Carl H. Kruse became the majority shareholder at that time by virtue of a Stock Purchase Agreement with the majority shareholder, resulting in a change of control of the Issuer.

 

The Company finalized the acquisition of a biodegradable plastic manufacturer, WSPVA, Bio Products International, LLC, a Nevada LLC, on March 12, 2012 for 102,238,200 common shares, of which 98,984,744 had been issued in the prior fiscal year and recorded as Issuance of Common Shares for Donated Services, because of the uncertainty of completing the transaction. The Company now owns 100% of the equity interests in this wholly owned subsidiary. With the transaction now complete the market value of the shares on March 12, 2012 has been recorded as the purchase price for WSPVA.

 

We are a development stage company and have not yet opened for business or generated any revenues. Our limited start-up operations have consisted of the formation of our business plan and identification of our target market. We will require the funds from this offering in order to fully implement our business plan as discussed in the “Plan of Operation” section During the period from November 2012 through April 2020, the Company was dormant.

 

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The Company’s accounting year-end is May 31.

 

David Lazar, the principal of Custodian Ventures, LLC conducted due diligence on the Company and determined that the Company would be a potential Custodianship candidate, based upon previous management appearing to have abandoned the Company approximately eleven years ago. Mr. Lazar then chose to buy shares of the Company on the open market, and start a Custodianship proceeding. 

 

On December 27, 2019 Custodian Ventures, LLC was appointed as the custodian of the Company by the Eighth Judicial Court of Nevada pursuant to Case No. A-19-805642-B.

 

Business Objectives of the Company

 

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

 

The Company’s common stock is subject to quotation on the OTC Pink Sheets under the symbol “ZYRX”. There is currently only a limited trading market in the Company’s shares nor do we believe that any active trading market has existed for approximately the last 5 years accurate. There can be no assurance that there will be an active trading market for our securities following the effective date of this amended registration statement under the Exchange Act. In the event that an active trading market commences, there can be no assurance as to the market price of our shares of common stock, whether any trading market will provide liquidity to investors, or whether any trading market will be sustained.

 

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

 

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

 

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

 

The time and costs required to pursue new business opportunities, which includes negotiating and documenting relevant agreements and preparing requisite documents for filing pursuant to applicable securities laws, can not be ascertained with any degree of certainty.

 

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

 

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

 

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Company is a Blank Check Company

 

At present, the Company is a development stage company with no revenues, no assets and no specific business plan or purpose. The Company’s business plan is to seek new business opportunities or to engage in a merger or acquisition with an unidentified company. As a result, the Company is a “blank check company” and, as a result, any offerings of the Company’s securities under the Securities Act of 1933, as amended (the “Securities Act”) must comply with Rule 419 promulgated by the Securities and Exchange Commission (the “SEC”) under the Act. The Company’s Common Stock is a “penny stock,” as defined in Rule 3a51-1 promulgated by the SEC under the Securities Exchange Act. The Penny Stock rules require a broker-dealer, prior to a transaction in penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that provides information about Penny Stocks and the nature and level of risks in the penny stock market.

 

The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its sales person in the transaction, and monthly account statements showing the market value of each Penny Stock held in the customer’s account. In addition, the Penny Stock rules require that the broker-dealer, not otherwise exempt from such rules, must make a special written determination that the Penny Stock is suitable for the purchaser and receive the purchaser’s written agreement to the transaction. These disclosure rules have the effect of reducing the level of trading activity in the secondary market for a stock that becomes subject to the Penny Stock rules. So long as the common stock of the Company is subject to the Penny Stock rules, it may be more difficult to sell the Company’s common stock.

 

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

 

Form S-8

 

Shell companies are prohibited from using Form S-8 to register securities under the Securities Act. If a company ceases to be a Shell Company, it may use Form S-8 sixty calendar days, provided it has filed all reports and other materials required to be filed under the Exchange Act during the preceding 12 months (or for such shorter period that it has been required to file such reports and materials after the company files “Form 10 information,” which is information that a company would be required to file in a amended registration statement on Form 10 if it were registering a class of securities under Section 12 of the Exchange Act. This information would normally be reported on a current report on Form 8-K reporting the completion of a transaction that caused the company to cease being a Shell Company.

 

Unavailability of Rule 144 for Resale

 

Rule 144(i) “Unavailability to Securities of Issuers With No or Nominal Operations and No or Nominal Non-Cash Assets” provides that Rule 144 is not available for the resale of securities initially issued by an issuer that is a Shell Company. We have identified our company as a Shell Company and, therefore, the holders of our securities may not rely on Rule 144 to have the restriction removed from their securities without registration or until the Company is no longer identified as a Shell Company and has filed all requisite periodic reports under the Exchange Act for the period of twelve (12) months.

 

As a result of our classification as a Shell Company, our investors are not allowed to rely on the “safe harbor” provisions of Rule 144, promulgated pursuant to the Securities Act, so as not to be considered underwriters in connection with the sale of our securities until one year from the date that we cease to be a Shell Company. This will likely make it more difficult for us to attract additional capital through subsequent unregistered offerings because purchasers of securities in such unregistered offerings will not be able to resell their securities in reliance on Rule 144, a safe harbor on which holders of restricted securities usually rely to resell securities.

 

Very Limited Liquidity of our Common Stock

 

Our common stock occasionally trades on the OTC Pink Sheet Market, as there is no active market maker in our common stock. As a result, there is only limited liquidity in our common stock.

 

We will be deemed a blank check company under Rule 419 of the Securities Act

 

The provisions of Rule 419 apply to amended registration statements filed under the Securities Act by a blank check company, such as the Company. Rule 419 requires that a blank check company filing a amended registration statement deposit the securities being offered and proceeds of the offering into an escrow or trust account pending the execution of an agreement for an acquisition or merger. While we are not currently registering shares for an offering, we may do so in the future.

 

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In addition, an issuer is required to file a post-effective amendment to a amended registration statement upon the execution of an agreement for an acquisition or merger. The rule provides procedures for the release of the offering funds, if any, in conjunction with the post effective acquisition or merger. The obligations to file post-effective amendments are in addition to the obligations to file Forms 8-K to report for both the entry into a material definitive (non-ordinary course of business) agreement and the completion of the transaction. Rule 419 applies to both primary and re-sale or secondary offerings.

 

Within five (5) days of filing a post-effective amendment setting forth the proposed terms of an acquisition, the Company must notify each investor whose shares are in escrow, if any. Each such investor then has no fewer than 20 and no greater than 45 business days to notify the Company in writing if they elect to remain an investor. A failure to reply indicates that the person has elected to not remain an investor. As all investors are allotted this second opportunity to determine to remain an investor, acquisition agreements should be conditioned upon enough funds remaining in escrow to close the transaction.

 

Effecting a business combination

 

Prospective investors in the Company’s common stock will not have an opportunity to evaluate the specific merits or risks of any of the one or more business combinations that we may undertake A business combination may involve the acquisition of, or merger with, a company which needs to raise substantial additional capital by means of being a publicly trading company, while avoiding what it may deem to be adverse consequences of undertaking a public offering itself. These include time delays, significant expense, loss of voting control and compliance with various Federal and State securities laws. A business combination may involve a company which may be financially unstable or in its early stages of development or growth.

 

The Company has not identified a target business or target industry

 

The Company’s effort in identifying a prospective target business will not be limited to a particular industry and the Company may ultimately acquire a business in any industry Management deems appropriate. To date, the Company has not selected any target business on which to concentrate our search for a business combination. While the Company intends to focus on target businesses in the United States, it is not limited to U.S. entities and may consummate a business combination with a target business outside of the United States. Accordingly, there is no basis for investors in the Company’s common stock to evaluate the possible merits or risks of the target business or the particular industry in which we may ultimately operate. To the extent we effect a business combination with a financially unstable company or an entity in its early stage of development or growth, including entities without established records of sales or earnings, we may be affected by numerous risks inherent in the business and operations of financially unstable and early stage or potential emerging growth companies. In addition, to the extent that we effect a business combination with an entity in an industry characterized by a high level of risk, we may be affected by the currently unascertainable risks of that industry. An extremely high level of risk frequently characterizes many industries which experience rapid growth. In addition, although the Company’s Management will endeavor to evaluate the risks inherent in a particular industry or target business, we cannot assure you that we will properly ascertain or assess all significant risk factors.

 

Sources of target businesses

 

Our Management anticipates that target business candidates will be brought to our attention from various unaffiliated sources, including securities broker-dealers, investment bankers, venture capitalists, bankers and other members of the financial community, who may present solicited or unsolicited proposals. Our Management may also bring to our attention target business candidates. While we do not presently anticipate engaging the services of professional firms that specialize in business acquisitions on any formal basis, we may engage these firms in the future, in which event we may pay a finder’s fee or other compensation in connection with a business combination. In no event, however, will we pay Management any finder’s fee or other compensation for services rendered to us prior to or in connection with the consummation of a business combination.

 

Selection of a target business and structuring of a business combination

 

Management owns 19,000 shares of the issued and outstanding shares of common stock of the Company, and will have broad flexibility in identifying and selecting a prospective target business. In evaluating a prospective target business, our Management will consider, among other factors, the following:

 

  financial condition and results of operation of the target company;
     
  growth potential;
     
  experience and skill of Management and availability of additional personnel;
     
  capital requirements;

 

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  competitive position;
     
  stage of development of the products, processes or services;
     
  degree of current or potential market acceptance of the products, processes or services;
     
  proprietary features and degree of intellectual property or other protection of the products, processes or services;
     
  regulatory environment of the industry; and
     
  costs associated with effecting the business combination.

 

These criteria are not intended to be exhaustive. Any evaluation relating to the merits of a particular business combination will be based, to the extent relevant, on the above factors as well as other considerations deemed relevant by our Management in effecting a business combination consistent with our business objective. In evaluating a prospective target business, we will conduct a due diligence review which will encompass, among other things, meetings with incumbent Management and inspection of facilities, as well as review of financial and other information which will be made available to us.

 

We will endeavor to structure a business combination so as to achieve the most favorable tax treatment to us, the target business and both companies’ stockholders. However, there can be no assurance that the Internal Revenue Service or applicable state tax authorities will necessarily agree with the tax treatment of any business combination we consummate.

 

The time and costs required to select and evaluate a target business and to structure and complete the business combination cannot presently be ascertained with any degree of certainty. Any costs incurred with respect to the identification and evaluation of a prospective target business with which a business combination is not ultimately completed will result in a loss to us.

 

Probable lack of business diversification

 

While we may seek to effect business combinations with more than one target business, it is more probable that we will only have the ability to effect a single business combination, if at all. Accordingly, the prospects for our success may be entirely dependent upon the future performance of a single business. Unlike other entities which may have the resources to complete several business combinations with entities operating in multiple industries or multiple areas of a single industry, it is probable that we will lack the resources to diversify our operations or benefit from the possible spreading of risks or offsetting of losses. By consummating a business combination with only a single entity, our lack of diversification may:

 

  subject us to numerous economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact upon the particular industry in which we may operate subsequent to a business combination, and
     
  result in our dependency upon the development or market acceptance of a single or limited number of products, processes or services.

 

Limited ability to evaluate the target business’ Management

 

We cannot assure you that our assessment of the target business’ Management will prove to be correct. In addition, we cannot assure you that the future Management will have the necessary skills, qualifications or abilities to man

 

age a public company intending to embark on a program of business development. Furthermore, the future role of our director, if any, in the target business cannot presently be stated with any certainty.

 

While it is possible that our director will remain associated in some capacity with us following a business combination, it is unlikely that he will devote his full efforts to our affairs subsequent to a business combination. Moreover, we cannot assure you that our director will have significant experience or knowledge relating to the operations of the particular target business.

 

Following a business combination, we may seek to recruit additional managers to supplement the incumbent Management of the target business. We cannot assure you that we will have the ability to recruit additional managers, or that additional managers will have the requisite skills, knowledge or experience necessary to enhance the incumbent Management.

 

Our auditors have expressed substantial doubt about our ability to continue as a going concern

 

Our audited financial statements for the years ended May 31, 2020 and 2019, were prepared using the assumption that we will continue our operations as a going concern. Our independent accountants in their audit report have expressed substantial doubt about our ability to continue as a going concern. Our operations are dependent on our ability to raise sufficient capital or complete business combination as a result of which we become profitable. Our financial statements do not include any adjustments that may result from the outcome of this uncertainty. There is not enough cash on hand to fund our administrative expenses and operating expenses for the next twelve months. Therefore, we may be unable to continue operations in the future as a going concern. If we cannot continue as a viable entity, our stockholders may lose some or all of their investment in the Company’s shares of common stock.

 

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Competition

 

In identifying, evaluating and selecting a target business, we expect to encounter intense competition from other entities having a business objective similar to ours. Many of these entities are well established and have extensive experience identifying and effecting business combinations, either directly or through affiliates. Many if not virtually most of these competitors possess far greater financial, human and other resources compared to our resources. While we believe that there are numerous potential target businesses that we may identify, our ability to compete in acquiring certain of the more desirable target businesses will be limited by our limited financial and human resources. Our inherent competitive limitations are expected by Management to give others an advantage in pursuing the acquisition of a target business that we may identify and seek to pursue. Further, any of these limitations may place us at a competitive disadvantage in successfully negotiating a business combination. Our Management believes, however, that our status as a reporting public entity with potential access to the United States public equity markets may give us a competitive advantage over certain privately-held entities having a similar business objective in acquiring a desirable target business with growth potential on favorable terms.

 

If we succeed in effecting a business combination, there will be, in all likelihood, intense competition from existing competitors of the business we acquire. In particular, certain industries which experience rapid growth frequently attract an increasingly larger number of competitors, including those with far greater financial, marketing, technical and other resources than the initial competitors in the industry in which we seek to operate. The degree of competition characterizing the industry of any prospective target business cannot presently be ascertained. We cannot assure you that, subsequent to a business combination, we will have the resources to compete effectively, especially to the extent that the target business is in a high-growth industry.

 

Employees

 

David Lazar, our Chief Executive Officer, is our sole executive officer. Mr. Lazar is not obligated to devote any specific number of hours per week and, in fact, intends to devote only as much time as he deem reasonably necessary to administer the Company’s affairs until such time as a business combination is consummated. The amount of time he will devote in any time period will vary based on the availability of suitable target businesses to investigate. We do not intend to have any full-time employees prior to the consummation of a business combination.

 

Conflicts of Interest

 

The Company’s Management is not required to commit its full time to the Company’s affairs. As a result, pursuing new business opportunities may require a longer period of time than if Management would devote full time to the Company’s affairs. Management is not precluded from serving as an officer or director of any other entity that is engaged in business activities similar to those of the Company. Currently, Mr. Lazar is looking for acquisition candidates for four other companies which he controls and are engaged in business activities similar to those we intend to conduct.

 

Since the Company’s Management has multiple business affiliations, our Management may have legal obligations to present certain business opportunities to multiple entities. In the event that a conflict of interest shall arise, Management will consider factors such as reporting status, liquidity, availability of audited financial statements, current capitalization and share concentration, business plan of the acquisition target, and the laws of jurisdictions. If several business opportunities or operating entities approach Management with respect to a business combination, Management will consider the foregoing factors as well as the preferences of the Management of the operating company. However, Management will always act in what it believes will be in the best interests of the shareholders of the Company, and the Company shall not enter into a transaction with a target business that is affiliated with Management. Currently, Management has not identified and is not currently negotiating a new business opportunity for us.

 

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ITEM 1A. RISK FACTORS

 

Forward-Looking Statements

 

This amended registration statement on Form 10 contains forward-looking statements that are based on current expectations, estimates, forecasts and projections about us, our future performance, the market in which we operate, our beliefs and our Management’s assumptions. In addition, other written or oral statements that constitute forward-looking statements may be made by us or on our behalf. Words such as “expects”, “anticipates”, “targets”, “goals”, “projects”, “intends”, “plans”, “believes”, “seeks”, “estimates”, variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict or assess. Therefore, actual outcomes and results may differ materially from what is expressed or forecast in such forward-looking statements.

 

Any investment in our shares of common stock involves a high degree of risk. You should carefully consider the following information about these risks, together with the other information contained in this annual report before you decide to invest in our common stock. Each of the following risks may materially and adversely affect our business objective, plan of operation and financial condition. These risks may cause the market price of our common stock to decline, which may cause you to lose all or a part of the money you invested in our common stock. We provide the following cautionary discussion of risks, uncertainties and possible inaccurate assumptions relevant to our business plan. In addition to other information included in this annual report, the following factors should be considered in evaluating the Company’s business and future prospects.

 

The Company has a limited operating history and very limited resources.

 

Since being acquired through custodial proceedings, the Company’s operations have been limited to seeking a potential business combination and has had no revenues from operations. Investors will have no basis upon which to evaluate the Company’s ability to achieve the Company’s business objective, which is to effect a merger, capital stock exchange and/or acquire an operating business. The Company will not generate any revenues until, at the earliest, after the consummation of a business combination or acquiring an operating business.

 

Our auditors have expressed substantial doubt about our ability to continue as a going concern.

 

As of May 31, 2020, we had zero cash and cash equivalents and negative stockholders equity of $26,220. Our audited financial statements for the years ended May 31, 2020 and May 31, 2019, were prepared using the assumption that we will continue our operations as a going concern. Our independent accountants in their audit report have expressed substantial doubt about our ability to continue as a going concern. Our operations are dependent on our ability to raise sufficient capital or complete business combination as a result of which we become profitable. Our financial statements do not include any adjustments that may result from the outcome of this uncertainty.

 

There is not enough cash on hand to fund our administrative expenses and operating expenses for the next twelve months. Therefore, we may be unable to continue operations in the future as a going concern. If we cannot continue as a viable entity, our stockholders may lose some or all of their investment in the Company’s shares of common stock.

 

Since the Company has not yet selected a particular target industry or target business with which to complete a business combination, the Company is unable to ascertain the merits or risks associated with any particular business or industry.

 

Since the Company has not yet identified a particular industry or prospective target business, there is no basis for investors to evaluate the possible merits or risks of the target business which the Company may ultimately acquire. If the Company completes a business combination with a financially unstable company or an entity in its development stage, the Company may be affected by numerous risks inherent in the operations of those entities. Although the Company’s Management intends to evaluate the risks inherent in a particular industry or target business, the Company cannot assure you that it will properly ascertain or assess all of the significant risk factors. There can be no assurance that any prospective business combination will benefit shareholders or prove to be more favorable to shareholders than any other investment that may be made by shareholders and investors.

 

Unspecified and unascertainable risks

 

There is no basis for shareholders to evaluate the possible merits or risks of potential business combination. To the extent that the Company effects a business combination with a financially unstable operating company or an entity that is in its early stage of development or growth, the Company will become subject to numerous risks. If the Company effects a business combination with an entity in a high-risk industry, the Company will become subject to the currently unascertainable risks of that industry. Although Management will endeavor to evaluate the risks inherent in a particular business or industry, there can be no assurance that Management will properly ascertain or assess all such risks that the Company perceived at the time of the consummation of a business combination.

 

 C: 

7

 

 

It is likely that the Company’s current sole officer and director will resign upon consummation of a business combination and the Company will have only limited ability to evaluate the Management of the target business.

 

The Company’s ability to successfully effect a business combination will be dependent upon the efforts of the Company’s Management. The future role of Management in the target business cannot presently be ascertained. Although it is possible that Management may remain associated with the target business following a business combination, it is likely that the Management of the target business will remain in place. Although the Company intends to closely scrutinize the management of a target business in connection with evaluating the desirability of effecting a business combination, the Company cannot assure you that the Company’s assessment of Management will prove to be correct.

 

Dependence on key personnel

 

The Company is dependent upon the continued services of Management. To the extent that his services become unavailable, the Company will be required to obtain other qualified personnel and there can be no assurance that it will be able to recruit qualified persons upon acceptable terms.

 

The Company’s sole officer and director may allocate his time to other businesses activities, thereby causing conflicts of interest as to how much time to devote to the Company’s affairs. Additionally, our management controls multiple companies who are simultaneously searching for acquisition candidates. This could have a negative impact on the Company’s ability to consummate a business combination in a timely manner, if at all.

 

The Company’s sole officer and director, Mr. David Lazar is not required to commit his full time to the Company’s affairs, which may result in a conflict of interest in allocating his time between the Company’s business and other businesses. The Company does not intend to have any full-time employees prior to the consummation of a business combination.

 

If Management’s other business affairs require him to devote more time to such affairs, it could limit his ability to devote time to the Company’s affairs and could have a negative impact on the Company’s ability to consummate a business combination. Furthermore, we do not have an employment agreement with Mr. Lazar.

 

David Lazar who is the Management is not precluded from serving as an officer or director of any other entity that is engaged in business activities similar to those of the Company. Currently, Mr. Lazar is looking for acquisition candidates for four other companies which he controls and are engaged in business activities similar to those we intend to conduct. Since the Company’s Management has multiple business affiliations, our Management may have legal obligations to present certain business opportunities to multiple entities. In the event that a conflict of interest shall arise, Management will consider factors such as reporting status, liquidity, availability of audited financial statements, current capitalization and share concentration, business plan of the acquisition target, and the laws of jurisdictions. If several business opportunities or operating entities approach Management with respect to a business combination, Management will consider the foregoing factors as well as the preferences of the Management of the operating company. However, Management will always act in what it believes will be in the best interests of the shareholders of the Company, and the Company shall not enter into a transaction with a target business that is affiliated with Management. Currently, Management has not identified and is not currently negotiating a new business opportunity for us.

 

These conflicts of interests may have a negative impact on the Company’s ability to consummate a business combination in a timely manner, if at all.

 

On May 31, 2020, the Company obtained a promissory note in amount of $26,220 from its custodian, Custodian Ventures, LLC in exchange for services. The note bears no interest and is payable on demand.

 

The Company may be unable to obtain additional financing, if and when required, to complete a business combination or to fund the operations and growth of the business combination target, which could compel the Company to restructure a potential business combination transaction or to entirely abandon a particular business combination.

 

The Company has not yet identified any prospective target business. If we require funds for a particular business combination, because of the size of the business combination or otherwise, we will be required to seek additional financing, which may or may not be available a terms and conditions satisfactory to the Company, if at all. To the extent that additional financing proves to be unavailable when and if needed to consummate a particular business combination, we would be compelled to restructure the transaction or abandon that particular business combination and seek an alternative target business candidate. In addition, if we consummate a business combination, we may require additional financing to fund the operations or growth of the target business. The failure to secure additional financing could have a material adverse effect on the continued development or growth of the target business. The Company’s officer, director or stockholders are not required to provide any financing to us in connection with or after a business combination.

 

It is probable that the Company will only be able to enter into one business combination, which will cause us to be solely dependent on such single business and a limited number of products or services.

 

It is probable that the Company will enter into a business combination with a single operating business. Accordingly, the prospects for the Company’s success may be:

 

  solely dependent upon the performance of a single operating business, or
     
  dependent upon the development or market acceptance of a single or limited number of products or services.

 

In this case, the Company will not be able to diversify the Company’s operations or benefit from the possible spreading of risks or offsetting of losses, unlike other entities which may have the resources to complete several business combinations in different industries or different areas of a single industry.

 

 C: 

8

 

 

The Company has limited resources and there is significant competition for business combination opportunities. Therefore, the Company may not be able to enter into or consummate an attractive business combination.

 

The Company expects to encounter intense competition from other entities having a business objective similar to the Company’s, including venture capital funds, leveraged buyout funds and operating businesses competing for acquisitions. Many of these entities are well established and have extensive experience in identifying and effecting business combinations directly or through affiliates. Many of these competitors possess greater technical, human and other resources than the Company does and the Company’s financial resources are limited when contrasted with those of many of these competitors. While the Company believes that there are numerous potential target businesses that it could acquire, the Company’s ability to compete in acquiring certain sizable target businesses will be limited by the Company’s limited financial resources and the fact that the Company will use its common stock to acquire an operating business. This inherent competitive limitation gives others an advantage in pursuing the acquisition of certain target businesses.

 

The Company may be unable to obtain additional financing, if required, to complete a business combination or to fund the operations and growth of the target business, which could compel the Company to restructure a potential business transaction or abandon a particular business combination.

 

We may be required to seek additional financing. We cannot assure you that such financing would be available on acceptable terms, if at all. If additional financing proves to be unavailable, we would be compelled to restructure the transaction or abandon that particular business combination and seek an alternative target business. In addition, if we consummate a business combination, we may require additional financing to fund the operations or growth of the target business. The failure to secure additional financing could have a material adverse effect on the continued development or growth of the target business.

 

Financing requirements to fund operations associated with reporting obligations under the Exchange Act.

 

The Company has no revenues and is dependent upon the willingness of the Company’s Management to fund the costs associated with the reporting obligations under the Exchange Act, other administrative costs associated with the Company’s corporate existence and expenses related to the Company’s business objective. The Company is not likely to generate any revenues until the consummation of a business combination, at the earliest. The Company believes that it will have available sufficient financial resources available from its Management to continue to pay accounting and other professional fees and other miscellaneous expenses that may be required until the Company commences business operations following a business combination.

 

We are dependent upon interim funding provided by Management or an affiliated party to pay professional fees and expenses. Our Management has provided funding, without formal agreement, as has been required to pay for accounting fees and other administrative expenses of the Company.

 

The Company does not currently engage in any business activities that provide cash flow. The costs of investigating and analyzing potential business combination candidates and preparing and filing Exchange Act reports for what may be an unlimited period of time will be paid by our sole officer and director, or an affiliated party notwithstanding the fact that there is no written agreement to pay such costs. Mr. Lazar and/or an affiliated party have informally agreed to pay the Company’s expenses in the form of advances that are unsecured, non-interest bearing. The Company intends to repay these advances when it has the cash resources to do so. On May 31, 2020, the Company obtained a promissory note in amount of $5,000 from its custodian, Custodian Ventures, LLC in exchange for services. The note bears no interest and is payable on demand.

 

Based on Mr. Lazar’s resource commitment to fund our operations, we believe that we will be able to continue as a going concern until such time as we conclude a business combination. During the next 12 months we anticipate incurring costs related to:

 

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

 

We estimate that these costs will range from five to six thousand dollars per year, and that we will be able to meet these costs as necessary through loans/advances from Management or affiliated parties until we enter into a business combination.

 

 C: 

9

 

 

The Company’s sole officer and director is in a position to influence certain actions requiring stockholder vote. Two shareholders currently control 70% of the Company’s common stock outstanding.

 

Management has no present intention to call for an annual meeting of stockholders to elect new directors prior to the consummation of a business combination. As a result, our current director will continue in office at least until the consummation of the business combination. If there is an annual meeting of stockholders for any reason, the Company’s Management has broad discretion regarding proposals submitted to a vote by shareholders as a consequence of Management’s position as the Company’s Custodian and only Director and Officer.

 

Currently there are two shareholders that own 37.7% and 32.3% , respectively, of the Company’s common stock that may try to block actions by Management. Although it is unlikely they will be successful in doing so due to the broad authority of the Custodian, they could delay the implementation of certain corporate actions.

 

Accordingly, the Company’s Management will continue to exert substantial control at least until the consummation of a business combination.

 

Broad discretion of Management

 

Any person who invests in the Company’s common stock will do so without an opportunity to evaluate the specific merits or risks of any prospective business combination. As a result, investors will be entirely dependent on the broad discretion and judgment of Management in connection with the selection of a prospective business combination. There can be no assurance that determinations made by the Company’s Management will permit us to achieve the Company’s business objectives.

 

Reporting requirements may delay or preclude a business combination

 

Pursuant to the requirements of Section 13 of the Exchange Act, the Company is required to provide certain information about significant acquisitions and other material events. The Company will continue to be required to file quarterly reports on Form 10-Q and annual reports on Form 10-K, which annual report must contain the Company’s audited financial statements. As a reporting company under the Exchange Act, following any business combination, we will be required to file a report on Form 8-K, which report contains audited financial statements of the acquired entity. These audited financial statements must be filed with the SEC within 5 days following the closing of a business combination. While obtaining audited financial statements is typically the responsibility of the acquired company, it is possible that a potential target company may be a non-reporting company with unaudited financial statements. The time and costs that may be incurred by some potential target companies to prepare such audited financial statements may significantly delay or may even preclude consummation of an otherwise desirable business combination. Acquisition prospects that do not have or are unable to obtain the required audited statements may not be appropriate for acquisition because we are subject to the reporting requirements of the Exchange Act.

 

If the Company is deemed to be an investment company, the Company may be required to institute burdensome compliance requirements and the Company’s activities may be restricted, which may make it difficult for the Company to enter into a business combination.

 

  restrictions on the nature of the Company’s investments; and
     
  restrictions on the issuance of securities, which may make it difficult for us to complete a business combination.

 

In addition, we may have imposed upon us burdensome requirements, including:

 

  registration as an investment company;
     
  adoption of a specific form of corporate structure; and
     
  reporting, record keeping, voting, proxy and disclosure requirements and other rules and regulations.

 

The Company does not believe that its anticipated principal activities will subject it to the Investment Company Act of 1940.

 

The Company has no “Independent Director”, so actions taken and expenses incurred by our officer and director on behalf of the Company will generally not be subject to “Independent Review”.

 

Our director owns shares of our common stock and, although no compensation will be paid to him for services rendered prior to or in connection with a business combination, he may receive reimbursement for out-of-pocket expenses incurred by him in connection with activities on the Company’s behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. There is no limit on the amount of these out-of-pocket expenses and there will be no review of the reasonableness of the expenses by anyone other than our board of director, which consist of one directors who may seek reimbursement. If our director will not be deemed “independent,” he will generally not have the benefit of independent director examining the propriety of expenses incurred on our behalf and subject to reimbursement. Although the Company believes that all actions taken by our director on the Company’s behalf will be in the Company’s best interests, the Company cannot assure the investor that this will actually be the case. If actions are taken, or expenses are incurred that are actually not in the Company’s best interests, it could have a material adverse effect on our business and plan of operation and the price of our stock held by the public stockholders.

 

General Economic Risks.

 

The Company’s current and future business objectives and plan of operation are likely dependent, in large part, on the state of the general economy. Adverse changes in economic conditions may adversely affect the Company’s business objective and plan of operation. These conditions and other factors beyond the Company’s control include also, but are not limited to regulatory changes.

 

 C: 

10

 

 

Risks Related to Our Common Stock

 

The Company’s shares of common stock are traded from time to time on the OTC Pink Sheet Market.

 

Our common stock is traded on the OTC Pink Sheet Market from time to time. There can be no assurance that there will be a liquid trading market for the Company’s common stock following a business combination. In the event that a liquid trading market commences, there can be no assurance as to the market price of the Company’s shares of common stock, whether any trading market will provide liquidity to investors, or whether any trading market will be sustained.

 

Our common stock is subject to the Penny Stock Rules of the SEC and the trading market in our common stock is limited, which makes transactions in our stock cumbersome and may reduce the value of an investment in our common stock.

 

The Securities and Exchange Commission has adopted Rule 3a51-1 which establishes the definition of a “penny stock,” for the purposes relevant to us, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, Rule 15g-9 require:

 

  that a broker or dealer approve a person’s account for transactions in penny stocks; and
     
  the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.

 

In order to approve a person’s account for transactions in penny stocks, the broker or dealer must:

 

  obtain financial information and investment experience objectives of the person; and
     
  make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.

 

The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating to the penny stock market, which, in highlight form:

 

  sets forth the basis on which the broker or dealer made the suitability determination; and
     
  that the broker or dealer received a signed, written agreement from the investor prior to the transaction.

 

Generally, brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it more difficult for investors to dispose of our common stock and cause a decline in the market value of our stock.

 

Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.

 

State blue sky registration; potential limitations on resale of the Company’s common stock

 

The holders of the Company’s shares of common stock registered under the Exchange Act and those persons who desire to purchase them in any trading market that may develop in the future, should be aware that there may be state blue-sky law restrictions upon the ability of investors to resell the Company’s securities. Accordingly, investors should consider the secondary market for the Company’s securities to be a limited one.

 

It is the intention of the Company’s Management following the consummation of a business combination to seek coverage and publication of information regarding the Company in an accepted publication manual which permits a manual exemption. The manual exemption permits a security to be distributed in a particular state without being registered if the Company issuing the security has a listing for that security in a securities manual recognized by the state. However, it is not enough for the security to be listed in a recognized manual. The listing entry must contain (1) the names of issuers, officers, and directors, (2) an issuer’s balance sheet, and (3) a profit and loss statement for either the fiscal year preceding the balance sheet or for the most recent fiscal year of operations. Furthermore, the manual exemption is a nonissuer exemption restricted to secondary trading transactions, making it unavailable for issuers selling newly issued securities.

 

Most of the accepted manuals are those published by Standard and Poor’s, Moody’s Investor Service, Fitch’s Investment Service, and Best’s Insurance Reports, and many states expressly recognize these manuals. A smaller number of states declare that they “recognize securities manuals” but do not specify the recognized manuals. The following states do not have any provisions and therefore do not expressly recognize the manual exemption: Alabama, Georgia, Illinois, Kentucky, Louisiana, Montana, South Dakota, Tennessee, Vermont and Wisconsin.

 

 C: 

11

 

 

Rule 144 Related Risks

 

The SEC adopted amendments to Rule 144 which became effective on February 15, 2008. These Rule 144 amendments apply to securities acquired both before and after that date. Generally, under the Rule 144 amendments, a person who has beneficially owned restricted shares for at least six months would be entitled to sell their securities provided that: (i) such person is not deemed to have been an affiliate at the time of, or at any time during the three months preceding, a sale; (ii) we are subject to and are current in the Exchange Act periodic reporting requirements for at least 90 days before the sale; and (iii) if the sale occurs prior to satisfaction of a one-year holding period, provided current information is available at the time of sale.

 

Persons who have beneficially owned restricted shares for at least six months but who are affiliates at the time of, or at any time during the three months preceding a sale, would be subject to additional restrictions, by which such person would be entitled to sell within any three-month period only a number of securities that does not exceed the greater of either of the following: (i) 1% of the total number of securities of the same class then outstanding; or (ii) the average weekly trading volume of such securities during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale; provided, in each case, that we are subject to the Exchange Act periodic reporting requirements for at least three months before the sale. Such sales by affiliates must also comply with the manner of sale, current public information and notice provisions of Rule 144.

 

These Rule 144 related risks are subject to further restrictions in the event that the Exchange Act reporting company is deemed to be a Shell Company, such as the Company.

 

Restrictions on the Reliance of Rule 144 by Shell Companies or Former Shell Companies

 

Historically, the SEC staff has taken the position that Rule 144 is not available for the resale of securities initially issued by companies that are, or previously were, blank check companies, like us. The SEC has codified and expanded this position in the amendments discussed above by prohibiting the use of Rule 144 for resale of securities issued by any shell companies (other than business combination related shell companies) or any issuer that has been at any time previously a shell company. The SEC has provided an important exception to this prohibition, however, if the following conditions are met:

 

  The issuer of the securities that was formerly a shell company has ceased to be a shell company;
     
  The issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act;
     
  The issuer of the securities has filed all Exchange Act reports and material required to be filed, as applicable, during the preceding 12 months (or such shorter period that the issuer was required to file such reports and materials), other than Current Reports on Form 8-K; and
     
  At least one year has elapsed from the time that the issuer filed current comprehensive disclosure with the SEC reflecting its status as an entity that is not a shell company.

 

As a result, it is likely that pursuant to Rule 144, stockholders who receive our restricted securities in a business combination will not be able to sell our shares without registration until one year after we have completed our initial business combination.

 

Rule 145 Related Risk

 

Under the new amendments, affiliates of a target company who receive registered shares in a Rule 145 business combination transaction, and who do not become affiliates of the acquirer, will be able to immediately resell the securities received by them into the public markets without registration (except for affiliates of a shell company as discussed in the following section). However, those persons who are affiliates of the acquirer, and those who become affiliates of the acquirer after the acquisition, will still be subject to the Rule 144 resale conditions generally applicable to affiliates, including the adequate current public information requirement, volume limitations, manner-of-sale requirements for equity securities, and, if applicable, a Form 144 filing.

 

Application of Rule 145 to Shell Companies

 

Public resale of securities acquired by affiliates of acquirers and target companies in business combination transactions involving shell companies will continue to be subject to restrictions imposed by Rule 145. If the business combination transaction is not registered under the Securities Act, then the affiliates must look to Rule 144 to resell their securities (with the additional Rule 144 conditions applicable to shell company securities). If the business combination transaction is registered under the Securities Act, then affiliates of the acquirer and target company may resell the securities acquired in the transaction, subject to the following conditions:

 

  The issuer must meet all of the conditions applicable to shell companies under Rule 144;
     
  After 90 days from the date of the acquisition, the affiliates may resell their securities subject to Rule 144’s volume limitations, adequate current public information requirement, and manner-of-sale requirements;
     
  After six months from the date of the acquisition, selling security-holders who are not affiliates of the acquirer may resell their securities subject only to the adequate current public information requirement of Rule 144; and
     
  After one year from the date of the acquisition, selling security-holders who are not affiliates or the acquirer may resell their securities without restriction.

 

 C: 

12

 

 

Application of Rule 419 to Shell Companies

 

The provisions of Rule 419 apply to amended registration statements filed under the Securities Act of 1933, as amended, by a blank check company. Rule 419 requires that a blank check company filing such amended registration statement deposit the securities being offered and proceeds of the offering into an escrow or trust account pending the execution of an agreement for an acquisition or merger.

 

In addition, the Company is required to file a post-effective amendment to the amended registration statement upon the execution of an agreement for such acquisition or merger. The rule provides procedures for the release of the offering funds in conjunction with the post effective acquisition or merger. The obligations to file post-effective amendments are in addition to the obligations to file Forms 8-K to report for both the entry into a material non-ordinary course agreement and the completion of the transaction. Rule 419 applies to both primary and re-sale or secondary offerings.

 

Within five (5) days of filing a post-effective amendment setting forth the proposed terms of an acquisition, the Company must notify each investor whose shares are in escrow. Each investor then has no fewer than 20 and no greater than 45 business days to notify the Company in writing if they elect to remain an investor. A failure to reply indicates that the person has elected to not remain an investor. As all investors are allotted this second opportunity to determine to remain an investor, acquisition agreements should be conditioned upon enough funds remaining in escrow to close the transaction.

 

You May Not Be Entitled to Protections Normally Afforded to Investors of Bank Check Companies.

 

If the net proceeds of an offering under the Securities Act of 1933 is used to complete an initial business combination with a target business that has not been identified, and we will have net tangible assets in excess of $5,000,001 upon the successful consummation of this offering and will file a Current Report on Form 8-K, including an audited balance sheet demonstrating this fact, we are exempt from rules promulgated by the SEC to protect investors of blank check companies such as Rule 419. Accordingly, investors will not be afforded the benefits or protections of those rules which would, for example, completely restrict the transferability of our securities, require us to complete our initial business combination within 18 months of the effective date of the initial amended registration statement and restrict the use of interest earned on the funds held in the trust account.

 

Investors will then not be entitled to protections normally offered to investors in Rule 419 blank check offerings.

 

Possible Issuance of Additional Securities.

 

Our Articles of Incorporation authorize the issuance of 3,000,000,000 shares of common stock, par value $0.001. As of September 15, 2020, we had 519,486,000 shares issued and outstanding. We may be expected to issue additional shares in connection with our pursuit of new business opportunities and new business operations. To the extent that additional shares of common stock are issued, our shareholders would experience dilution of their respective ownership interests. If we issue shares of common stock in connection with our intent to pursue new business opportunities, a change in control of the Company may be expected to occur. The issuance of additional shares of common stock may adversely affect the market price of our common stock, in the event that an active trading market commences. 

 

Dividends unlikely

 

The Company does not expect to pay dividends for the foreseeable future because it has no revenues or cash resources. The payment of dividends will be contingent upon the Company’s future revenues and earnings, if any, capital requirements and overall financial conditions. The payment of any future dividends will be within the discretion of the Company’s board of directors as then constituted. It is the Company’s expectation that future Management following a business combination will determine to retain any earnings for use in its business operations and accordingly, the Company does not anticipate declaring any dividends in the foreseeable future.

 

 C: 

13

 

 

ITEM 2. FINANCIAL INFORMATION

 

Management’s Plan of Operation

 

The following discussion contains forward-looking statements. Forward-looking statements give our current expectations or forecasts of future events. You can identify these statements by the fact that they do not relate strictly to historical or current facts. They use of words such as “anticipate”, “estimate”, “expect”, “project”, “intend”, “plan”, “believe”, and other words and terms of similar meaning in connection with any discussion of future operating or financial performance. From time to time, we also may provide forward-looking statements in other materials we release to the public.

 

Overview

 

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

 

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

 

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

 

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

 

Results of Operations during the year ended May 31, 2020 as compared to the year ended May 31, 2019

 

We have not generated any revenues during the years ended May 31, 2019 and 2020. We had total of $26,220 in administrative expenses during the year ended May 31, 2020 compared to zero during the year ended May 31, 2019.

 

 C: 

14

 

 

Liquidity and Capital Resources

 

As of May 31, 2020, the Company has no business operations and no cash resources other than that provided by Management. We are dependent upon interim funding provided by Management or an affiliated party to pay professional fees and expenses. Our Management and an affiliated party have agreed to provide funding as may be required to pay for accounting fees and other administrative expenses of the Company until the Company enters into a business combination. The Company would be unable to continue as a going concern without interim financing provided by Mr. Lazar, the Court appointed custodian.

 

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

 

The Company does not currently engage in any business activities that provide cash flow. The costs of investigating and analyzing business combinations, maintaining the filing of Exchange Act reports, the investigation, analyzing, and consummation of an acquisition for an unlimited period of time will be paid from additional money contributed by David Lazar, our sole officer and director, or an affiliated party.

 

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

 

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

 

We estimate that these costs will be in the range of $10,000-$15,000 per year, and that we will be able to meet these costs as necessary, to be advanced/loaned to us by Management and/or an affiliated party.

 

We had a negative cash flow from operations of $26,220 during the year ended May 31, 2020. We financed our negative cash flow from operations during this period through advances made by our CEO amounting to $26,220.

 

We had $0 cash flow from operations during the six months ended May 30, 2019. The Company currently plans to satisfy its cash requirements for the next 12 months through borrowings from its CEO or companies affiliated with its CEO and believes it can satisfy its cash requirements so long as it is able to obtain financing from these affiliated parties. The Company expects that money borrowed will be used during the next 12 months to satisfy the Company’s operating costs, professional fees and for general corporate purposes. There is no written funding agreement between the Company and Mr. Lazar, our sole officer and director. On May 31, 2020, the Company obtained a promissory note in amount of $26,220 from its custodian, Custodian Ventures, LLC in exchange for services. The note is an interest-free demand note.

 

The Company has only limited capital. Additional financing is necessary for the Company to continue as a going concern. Our independent auditors have issued an unqualified audit opinion for the years ended May 31, 2020 and 2019 with an explanatory paragraph on going concern.

 

Off-Balance Sheet Arrangements

 

As of May 31, 2020 and 2019, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K promulgated under the Securities Act of 1934.

 

Contractual Obligations and Commitments

 

As of May 31, 2020 and 2019, we did not have any contractual obligations.

 

Critical Accounting Policies

 

Our significant accounting policies are described in the notes to our financial statements for the years ended May 31, 2020 and 2019, and are included elsewhere in this amended registration statement.

 

ITEM 3. DESCRIPTION OF PROPERTY

 

The Company’s corporate office is located at 3445 Lawrence Avenue, Oceanside, NY 11572, which space is provided to us on a rent-free basis. The Company believes that the office facilities are sufficient for the foreseeable future and this arrangement will remain until we find a new business opportunity.

 

 C: 

15

 

 

ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

 

The following table sets forth information regarding the beneficial ownership of our common stock as of September 1, 2020. The information in this table provides the ownership information for: each person known by us to be the beneficial owner of more than 5% of our common stock; each of our directors; each of our executive officers; and our executive officers and directors as a group.

 

Beneficial ownership has been determined in accordance with the rules and regulations of the SEC and includes voting or investment power with respect to the shares. Unless otherwise indicated, the persons named in the table below have sole voting and investment power with respect to the number of shares indicated as beneficially owned by them.

 

Name of Beneficial Owner  Common Stock
Beneficially
Owned (1)
   Percentage of
Common Stock
Owned (1)
 
David Lazar
1185 Avenue of the Americas, 3rd Floor.
   19,000    .004%
New York, New York 10036.          
           
Director and Officer (1 person)   19,000    .004%
           
Riverdale Bio Products Limited
C/O Carl Kruse (2)
1800 Ne 114th St Apt 609
Miami Fl 33181-3417
   196,090,050    37.7%
           
Pasquale Falotico (2)
85 Sweetwater Cres
Richmond Hill On L4s 2b2
Canada
   167,794,400    32.3%

 

(1) Applicable percentage ownership is based on 519,486,000 shares of common stock outstanding as of September 15, 2020. Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities. Shares of common stock that are currently exercisable or exercisable within 60 days of September 1, 2020 are deemed to be beneficially owned by the person holding such securities for the purpose of computing the percentage of ownership of such person, but are not treated as outstanding for the purpose of computing the percentage ownership of any other person.

 

(2)Exercises full investment of voting control over their respective shares.

 

Although Mr. Falotico and Riverdale Bio Products Limited currently control 70% of the Company’s outstanding common shares, it is unlikely they could exert any influence on Management’s activities due to Mr. Lazar’s position as the Company’s sole officer and director as well as the Company remaining under his control as the Court- appointed custodian.

 

 C: 

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Mr. Lazar has also held positions and/or directorships with the following publicly-traded entities since 2015:

 

    MARKET       FROM   TO
NAME OF ISSUER   TRADED ON   POSITION(S) HELD   MM   YYYY   MM   YYYY
Rarus Technologies, Inc. (RARS)   OTCBB   CEO, Director   01   -   2018   05   -   2018
DRS, Inc. (DRSX)       CEO, Director   07   -   2018   11   -   2018
Energenx, Inc. (EENX)   OTC   CEO   03   -   2018   07   -   2018
Melt, Inc. (MLTC)   OTC   Director   10   -   2018   03   -   2019
Nevtah Capital Management Corporation (NTAH)   OTC – US   President, Chief Executive
Officer & Secretary
  03   -   2019   05   -   2020
Mediashift, Inc. (MSHFQ)   OTC   Chairman, President, CEO, CFO & Secretary   03   -   2019   09   -   2019
Sollensys Corp. (SOLS)   OTC Market   President, CEO, Secretary &
Director
  12   2019   08   -    2020
Foru Holdings, Inc (FORU)   OTC Markets   Chairman, President, CEO,
CFO & Secretary
  03   2020   Current    
Superbox, Inc (SBOX)   OTC Markets   Chairman, President, CEO,
CFO & Secretary
  03   2020   Current    
Petrone Worldwide, Inc (PFWIQ)   OTC Markets   Chairman, President, CEO,
CFO & Secretary
  03   2020   Current    
Gushen, Inc (GSHN)   OTC – US   Chairman, President, CEO,
CFO & Secretary
  03   2020   Current    
Reliance Global Group Inc. (RELI)   OTC   Director   03   2020   Current    
GHAR, Inc. (GHAR)   OTC Markets   Chairman, President, CEO,
CFO & Secretary
  03   2020  

Current

   
PhoneBrasil  (PHBR)   OTC Markets   Chairman, President, CEO,
CFO & Secretary
  08   2020   Current    
XXStream (XMET)  

OTC Markets

 

Chairman, President,
CEO & Secretary

  07  

2020

  Current    
Adorbs (ADOB)   OTC Markets  

Chairman, President,
CEO & Secretary

  07  

2020

  Current    

 

David Lazar was also the sole officer and director of Shentang International, Inc. (“Shentang”), which is a blank check company. On April 29, 2020, Plentiful Limited, a Samoan company, purchased 10,000,000 shares of Shentang’s preferred stock, par value $0.001 per share, representing 98% of the voting stock, from Custodian Ventures for $225,000. This concluded Mr. Lazar’s association with Shentang. A business combination has yet to occur. Shentang has not registered any offerings under the Securities Act.

 

David Lazar was also the sole officer and director of Guozi Zhongyu Capital Holdings (formerly Melt Inc.) (“Guozi”), which was a blank check company. On February 27, 2019, Zhicheng RAO, purchased 2,185,710,000 shares of Guozi’s common stock, par value $0.00001 per share, from Custodian Ventures for $325,000, representing 99% of the voting stock. A business combination has yet to occur This concluded Mr. Lazar’s association with Guozi. Guozi has not registered any offerings under the Securities Act.

 

David Lazar was also the sole officer and director of Cang Bao Tian Xia International Art Trade Center Inc. (formerly Zhongchai Machinery, Inc.) (“Cang”), which is a blank check company. On December 16, 2018, Xingtao Zhou and Yaqin Fu purchased 3,096,200 shares of common stock and 10,000,000 shares (the “Shares”) of preferred stock, each par value $0.001 per share, representing approximately 99% of the voting capital, from Custodian Ventures for $375,000. This concluded Mr. Lazar’s association with Cang. A business combination has yet to occur. Cang has not registered any offerings under the Securities Act.

 

David Lazar, was also the sole officer and director of Sollensys Corp (“SOLS”) which is a blank check company. On August 5, 2020, Eagle Lake Laboratories, Inc., a Florida corporation agreed to purchase 19,000,000 Series A Preferred Shares controlled by Mr. Lazar for $230,000. The shares of Series A Preferred Stock, par value $0.001 per share, of the Company are convertible into shares of common stock, par value $0.001 per share, of the Company (the “Common Stock”) at a rate of 50 shares of Common Stock per share of Series A Preferred Stock, and has voting power on an as-converted basis (voting with the Common Stock as one class) and thus represents 65.4% of the voting power of all shares of stock of the Company. This concluded Mr. Lazar’s association with Sollensys. A business combination has yet to occur. Sollensys has not registered any offerings under the Securities Act.

 

David Lazar, was also the sole director of Melt Inc. (“MLTC”) which is a blank check company. On February 27, 2019, David Lazar entered into a Stock Purchase Agreement with Zhicheng RAO who agreed to purchase from the Seller, 2,185,710,000 shares of common stock, par value $0.00001 per share of Melt, Inc. (the “Company”), constituting approximately 99% of the issued and outstanding Common Stock, for an aggregate purchase price of $325,000. As a condition precedent to closing, David Lazar agreed to acquire from the Company 2,107,710,000 of newly issued shares of Common Stock from the Company. The Company filed Amended and Restated Articles of Incorporation with Nevada Secretary of State on February 26, 2019 to increase the company’s authorized shares of common stock from 100,000,000 to 10,000,000,000 with a par value of $0.00001 per share. The amended and restated Articles also authorized 10,000,000 shares of Preferred Stock with a par value of $0.001 per share. The Company issued 2,107,710,000 shares of restricted common stock to the Seller in a private sale exempt from registration pursuant to Section 4(2) of 1933 Act on February 28, 2019, and thus increased Seller’s shareholding interest in the Company from 78,000,000 shares of common stock to 2,185,710,000 shares of common stock prior to Closing. A business combination has yet to occur This concluded Mr. Lazar’s association with Melt, Inc.

 

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Currently  there are four companies which Mr. Lazar controls that are blank check companies looking for an acquisition candidate. They are Gushen Inc., PhoneBrasil Inc., XXStream Entertainment, Inc. and Adorbs Inc.

 

ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS

 

The following table sets forth the names and ages of the member of our Board of Director and our executive officers and the positions held by each.

 

Name   Age   Title
David Lazar   30   CEO and Chairman

 

David Lazar, 30, has been CEO and Chairman of the Company since May 16, 2018. David Lazar is a private investor with business experience. Mr. Lazar has been a partner at Zenith Partners International since 2013, where he specializes in research and development, sales and marketing. Since February of 2018, Mr. Lazar has been the managing member of Custodian Ventures LLC, where he specializes in assisting distressed public companies. Since March 2018, David has acted as the managing member of Activist Investing LLC, which specializes in active investing in distressed public companies. David has a diverse knowledge of financial, legal and operations management; public company management, accounting, audit preparation, due diligence reviews and SEC regulations.

 

Mr. Lazar has also held positions and/or directorships with the following publicly traded entities since 2015:

 

David Lazar was also the sole officer and director of Shentang International, Inc. (“Shentang”), which is a blank check company. On April 29, 2020, Plentiful Limited, a Samoan company, purchased 10,000,000 shares of Shentang’s preferred stock, par value $0.001 per share, representing 98% of the voting stock, from Custodian Ventures for $225,000. This concluded Mr. Lazar’s association with Shentang. A business combination has yet to occur. Shentang has not registered any offerings under the Securities Act.

 

David Lazar was also the sole officer and director of Guozi Zhongyu Capital Holdings (formerly Melt Inc.) (“Guozi”), which was a blank check company. On February 27, 2019, Zhicheng RAO, purchased 2,185,710,000 shares of Guozi’s common stock, par value $0.00001 per share, from Custodian Ventures for $325,000, representing 99% of the voting stock. This concluded Mr. Lazar’s association with Guozi. Guozi has not registered any offerings under the Securities Act.

 

David Lazar was also the sole officer and director of Cang Bao Tian Xia International Art Trade Center Inc. (formerly Zhongchai Machinery, Inc.) (“Cang”), which is a blank check company. On December 16, 2018, Xingtao Zhou and Yaqin Fu purchased 3,096,200 shares of common stock and 10,000,000 shares (the “Shares”) of preferred stock, each par value $0.001 per share, representing approximately 99% of the voting capital, from Custodian Ventures for $375,000. This concluded Mr. Lazar’s association with Cang. A business combination has yet to occur. Cang has not registered any offerings under the Securities Act.

 

Section 16(a) Compliance

 

Section 16(a) of the Securities and Exchange Act of 1934 requires the Company’s directors and executive officers, and persons who own beneficially more than ten percent (10%) of the Company’s Common Stock, to file reports of ownership and changes of ownership with the Securities and Exchange Commission. Copies of all filed reports are required to be furnished to the Company pursuant to Section 16(a). Once the Company becomes subject to the Exchange Act of 1934, our office and director has informed us that he intends to file reports required to be filed under Section 16(a).

 

ITEM 6. EXECUTIVE COMPENSATION

 

No executive compensation was paid during the fiscal years ended May 31, 2020 and 2019. The Company has no employment agreement with any of its officers and directors.

 

ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

 

On May 31, 2020, the Company obtained a promissory note in amount of $26,220 from its custodian, Custodian Ventures, LLC in exchange for services. The note bears no interest and is payable on demand.

 

ITEM 8. LEGAL PROCEEDING

 

None.

 

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ITEM 9. MARKET PRICE OF AND DIVIDENDS ON THE COMPANY’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

 

Market Information

 

Our common stock is currently quoted on the OTC market “Pink Sheets” under the symbol “ZYRX”. For the periods indicated, the following table sets forth the high and low bid prices per share of common stock. The below prices represent inter-dealer quotations without retail markup, markdown, or commission and may not necessarily represent actual transactions.

 

   Price Range 
Period  High   Low 
Year Ended May 2020:        
First Quarter  $0.03   $0.011 
Second Quarter  $0.035   $0.0101 
Third Quarter  $0.02   $0.005 
Fourth Quarter  $0.0005   $0.0005 
Year Ended May 30, 2019:          
First Quarter  $0.0005   $0.0005 
Second Quarter  $0.0005   $0.0005 
Third Quarter  $0.0005   $0.0005 
Fourth Quarter  $0.0005   $0.00005 

 

As of May 31, 2020, our shares of common stock were held by approximately 183 stockholders of record. The transfer agent of our common stock is Empire Stock Transfer. Phone (702) 818-5898.

 

Dividends

 

Holders of common stock are entitled to dividends when, as, and if declared by the Board of Directors, out of funds legally available, therefore. We have never declared cash dividends on its common stock and our Board of Directors does not anticipate paying cash dividends in the foreseeable future as it intends to retain future earnings to finance the growth of our businesses. There are no restrictions in our articles of incorporation or bylaws that restrict us from declaring dividends.

 

Securities Authorized for Issuance Under Equity Compensation Plans

 

No equity compensation plan or agreements under which our common stock is authorized for issuance has been adopted during the fiscal years ended May 30, 2020 and 2019.

 

ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES

 

None 

 

The issuance was completed pursuant to Section 4(a)(2) of the Securities Act.

 

ITEM 11. DESCRIPTION OF COMPANY’S SECURITIES TO BE REGISTERED

 

The following statements relating to the capital stock set forth the material terms of the Company’s securities; however, reference is made to the more detailed provisions of our Certificate of Incorporation and by-laws, copies of which are filed herewith.

 

Common Stock

 

Our Certificate of Incorporation authorize the issuance of 3,000,000,000 shares of common stock, par value $0.001. Our holders of shares of common stock are entitled to one vote for each share on all matters to be voted on by the shareholders. Holders of common stock do not have cumulative voting rights. Holders of common stock are entitled to share ratably in dividends, if any, as may be declared from time to time by the board of directors in its discretion from legally available funds. In the event of a liquidation, dissolution or winding up of the Company, the holders of common stock are entitled to share pro rata all assets remaining after payment in full of all liabilities. Holders of common stock have no preemptive rights to purchase the Company’s common stock. There are no conversion or redemption rights or sinking fund provisions with respect to the common stock.

 

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Dividends

 

Dividends, if any, will be contingent upon our revenues and earnings, if any, capital requirements and financial conditions. The payment of dividends, if any, will be within the discretion of our board of directors. We intend to retain earnings, if any, for use in our business operations and accordingly, the board of directors does not anticipate declaring any dividends prior to a business combination transaction, nor can there be any assurance that any dividends will be paid following any business combination.

 

ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS

 

Our articles of incorporation, by-laws and director indemnification agreements provide that each person who was or is made a party or is threatened to be made a party to or is otherwise involved (including, without limitation, as a witness) in any action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he or she is or was a director or an officer of Brenham or, in the case of a director, is or was serving at our request as a director, officer, or trustee of another corporation, or of a partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan, whether the basis of such proceeding is alleged action in an official capacity as a director, officer or trustee or in any other capacity while serving as a director, officer or trustee, shall be indemnified and held harmless by us to the fullest extent authorized by the Nevada General Corporation Law against all expense, liability and loss reasonably incurred or suffered by such.

 

Section 145 of the Nevada General Corporation Law permits a corporation to indemnify any director or officer of the corporation against expenses (including attorney’s fees), judgments, fines and amounts paid in settlement actually and reasonably incurred in connection with any action, suit or proceeding brought by reason of the fact that such person is or was a director or officer of the corporation, if such person acted in good faith and in a manner that he or she reasonably believed to be in, or not opposed to, the best interests of the corporation, and, with respect to any criminal action or proceeding, if he or she had no reason to believe his or her conduct was unlawful. In a derivative action, ( i.e ., one brought by or on behalf of the corporation), indemnification may be provided only for expenses actually and reasonably incurred by any director or officer in connection with the defense or settlement of such an action or suit if such person acted in good faith and in a manner that he or she reasonably believed to be in, or not opposed to, the best interests of the corporation, except that no indemnification shall be provided if such person shall have been adjudged to be liable to the corporation, unless and only to the extent that the court in which the action or suit was brought shall determine that the defendant is fairly and reasonably entitled to indemnity for such expenses despite such adjudication of liability.

 

Pursuant to Section 102(b)(7) of the Nevada General Corporation Law, Article Seven of our articles of incorporation eliminates the liability of a director to us for monetary damages for such a breach of fiduciary duty as a director, except for liabilities arising:

 

  from any breach of the director’s duty of loyalty to us;
     
  from acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law;
     
  under Section 174 of the Nevada General Corporation Law; and
     
  from any transaction from which the director derived an improper personal benefit.

 

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ITEM 13. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Report of Independent Registered Public Accounting Firm

To the shareholders and the board of directors of Zyrox Mining International, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Zyrox Mining International, Inc. as of May 31, 2020 and 2019, the related statements of operations, stockholders' equity (deficit), and cash flows for the years then ended, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of May 31, 2020 and 2019, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. 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 audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material 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 we are required to obtain an understanding of internal control over financial reporting 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.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

Substantial Doubt about the Company’s Ability to Continue as a Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has suffered recurring losses from operations and has a significant accumulated deficit. In addition, the Company continues to experience negative cash flows from operations. 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 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

/S/ BF Borgers CPA PC

BF Borgers CPA PC

 

We have served as the Company's auditor since 2020

Lakewood, CO

September 17, 2020

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ZYROX MINING INTERNATIONAL, INC.

BALANCE SHEETS

 

   May 31,   May 31, 
   2020   2019 
         
ASSETS        
         
Total Assets  $-   $- 
           
LIABILITIES & STOCKHOLDERS’ DEFICIT          
           
Current liabilities          
Notes payable-related party   26,220    - 
Total current liabilities   26,220    - 
           
Total liabilities   26,220    - 
           
Commitments and Contingencies   -    - 
           
Stockholders’ Equity          
Preferred stock Series A, $0.001 par value 300,000,000,shares authorized, 855,000 shares issued and outstanding   855    855 
Common stock, Par Value $0.001, 3,000,000,000 shares authorized, 519,486,000 issued and outstanding as of May 31, 2020 and 2019, respectively   519,487    519,487 
Additional paid in capital   98,330,676    98,330,676 
Retained earnings (deficit)   (98,877,238)   (98,851,018)
Total Stockholders’ (Deficit)   (26,220)   - 
Total Liabilities and Stockholders’ (Equity)  $-   $- 

 

The accompanying notes are an integral part of these financial statements.

 

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ZYROX MINING INTERNATIONAL, INC.

STATEMENTS OF OPERATIONS

 

   YEARS ENDED 
   May 31,   May 31, 
   2020   2019 
Revenue  $    -   $     - 
           
Operating Expenses:          
Administrative expenses -related party   26,220    - 
Total operating expenses   26,220    - 
(Loss) from operations   (26,220)   - 
Other expense          
Other (expense) net   -    - 
Income (loss) before provision for income taxes   (26,220)   - 
Provision for income taxes   -    - 
Net (Loss)  $(26,220)  $- 
           
Basic and diluted earnings(loss) per common share  $(0.00)  $- 
           
Weighted average number of shares outstanding   519,486,000    519,486,000 

 

The accompanying notes are an integral part of these financial statements.

 

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ZYROX MINING INTERNATIONAL, INC.

STATEMENTS OF CASH FLOWS

 

   May 31,   May 31, 
   2020   2019 
Cash Flows From Operating Activities:        
Net loss  $(26,220)  $    - 
Adjustments to reconcile net income to net cash provided by (used for) operating activities          
Net cash provided by (used for) operating activities   (26,220)   - 
           
Cash Flows From Investing Activities:          
Net cash provided by (used for) investing activities   -    - 
           
Cash Flows From Financing Activities:          
Proceeds from related party loans   26,220    - 
Net cash provided by (used for) financing activities   -    - 
           
Net Increase (Decrease) In Cash   -    - 
Cash At The Beginning Of The Period   -    - 
Cash At The End Of The Period  $-   $- 
           
Supplemental disclosure of cash flow information:          
Cash paid for interest  $-   $- 

 

The accompanying notes are an integral part of these financial statements.

  

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ZYROX MINING INTERNATIONAL, INC.

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

 

                   Additional       Total 
   Preferred Stock   Common Stock   Paid-in   Accumulated   Stockholders’ 
   Shares   Value   Shares   Value   Capital   Deficit   Equity 
Balance, May 31, 2018   855,000   $855    519,486,000   $519,487   $98,330,676   $(98,851,018)  $     - 
                                    
Net loss                            -    - 
                                    
Balance, May 31, 2019   855,000   $855    519,486,000   $519,487   $98,330,676   $(98,851,018)   - 
                                    
Net loss                            (26,220)   (26,220)
                                    
Balance, May 31, 2020   855,000   $855    519,486,000   $519,487   $98,330,676   $(98,877,238)  $(26,220)

 

The accompanying notes are an integral part of the financial statements.

 

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ZYROX MINING

NOTES TO FINANCIAL STATEMENTS

FOR THE YEARS ENDED MAY 31, 2020 AND 2019

 

NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS

 

Zyrox Mining International, Inc. (the “Company”) f/k/a Diversified Energy & Fuel, Inc. was incorporated in the State of Nevada on June 3, 2009. Zyrox Mining International, Inc. began formal operations on June 3, 2009, with the principle purpose of developing, marketing and selling software products through the Internet, and to provide web based services for individuals and small business. During 2010, this business was discontinued and management focused on developing a biodegradable plastic opportunity.

 

The Company began trading as Riverdale Capital, Ltd. under the symbol “RICP” on June 3, 2009. Effective April 30, 2012 the Company changed its name to Diversified Energy & Fuel International, Inc and changed its name to Zyrox Mining International, Inc. on August 15, 2012.

 

On November 8, 2010, the Company entered into an agreement to acquire 100% of the Membership Interests of WSVPA Bio Products Incorporated, a Nevada LLC in consideration for 102,238,200 shares of common stock. After completion of their due diligence, WSPVA formally closed on the transaction on May 12, 2012. The Company subsequently received 500,000,000 Class “A” membership units and 1,000,000 Class “B” membership units representing 100% of the membership interest of WSPVA (dissolvingplastic.com) in return for 102,238,200 common shares of the Company and WSPVA is now a wholly owned subsidiary of the Company.

 

On August 17, 2010, the then Chief Executive Officer resigned and appointed Carl H. Kruse as sole Director and Chief Executive Officer. Carl H. Kruse became the majority shareholder at that time by virtue of a Stock Purchase Agreement with the majority shareholder, resulting in a change of control of the Issuer.

 

The Company finalized the acquisition of a biodegradable plastic manufacturer, WSPVA, Bio Products International, LLC, a Nevada LLC, on March 12, 2012 for 102,238,200 common shares, of which 98,984,744 had been issued in the prior fiscal year and recorded as Issuance of Common Shares for Donated Services, because of the uncertainty of completing the transaction. The Company now owns 100% of the equity interests in this wholly owned subsidiary. With the transaction now complete the market value of the shares on March 12, 2012 had been recorded as the purchase price for WSPVA.

 

The Company has not yet opened for business or generated any revenues. Our limited start-up operations have consisted of the formation of our business plan and identification of our target market. We will require the funds from this offering in order to fully implement our business plan as discussed in the “Plan of Operation” section

 

During the period from November 2012 through April 2020, the Company was dormant.

 

The Company’s accounting year-end is May 31.

 

On December 27, 2019 Custodian Ventures, LLC was appointed as the custodian of the Company by the Eighth Judicial Court of Nevada pursuant to Case No. A-19-805642-B.

  

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

  

Basis of Presentation

 

The accompanying financial statements have been prepared in accordance with the Financial Accounting Standards Board (“FASB”) “FASB Accounting Standard Codification™” (the “Codification”) which is the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with generally accepted accounting principles (“GAAP”) in the United States. 

 

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Going Concern

 

The accompanying financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business for the twelve-month period following the date of these financial statements. The Company has incurred operating losses since inception. As of May 31, 2020 the company had a working capital deficit of $26,220 and negative shareholders’ equity of $26,220.

 

Because the Company does not expect that existing operational cash flow will be sufficient to fund presently anticipated operations, this raises substantial doubt about the Company’s ability to continue as a going concern. Therefore, the Company will need to raise additional funds and is currently exploring alternative sources of financing. The Company is currently being funded by David Lazar who is extending interest free demand loans to the Company. Historically, the Company has raised capital through private placements, as an interim measure to finance working capital needs and may continue to raise additional capital through the sale of common stock or other securities and obtaining some short-term loans. The Company will be required to continue to so until its operations become profitable. Also, the Company has, in the past, paid for consulting services with its common stock to maximize working capital, and intends to continue this practice where feasible.

   

Use of Estimates

 

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. The most significant estimates relate to income taxes and contingencies. The Company bases its estimates on historical experience, known or expected trends and various other assumptions that are believed to be reasonable given the quality of information available as of the date of these financial statements. The results of these assumptions provide the basis for making estimates about the carrying amounts of assets and liabilities that are not readily apparent from other sources. Actual results could differ from these estimates.

 

Revenue Recognition

 

On July 1, 2018, the Company adopted Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”). Results for reporting periods beginning after January 1, 2018, are presented under ASC 606. As of and for the year ended May 31, 2020 the financial statements were not impacted due to the application of Topic 606 because the Company had no revenues.

 

Cash and cash equivalents

 

The Company considers all highly liquid temporary cash investments with an original maturity of three months or less to be cash equivalents. On May 31, 2020, and May 31, 2019, the Company’s cash equivalents totaled $-0- and $-0- respectively.

 

Income taxes

 

The Company accounts for income taxes under FASB ASC 740, “Accounting for Income Taxes”. Under FASB ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under FASB ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. FASB ASC 740-10-05, “Accounting for Uncertainty in Income Taxes” prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities.

 

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The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. The Company assesses the validity of its conclusions regarding uncertain tax positions quarterly to determine if facts or circumstances have arisen that might cause it to change its judgment regarding the likelihood of a tax position’s sustainability under audit.

 

Stock-based Compensation

 

The Company accounts for stock-based compensation using the fair value method following the guidance outlined in Section 718-10 of the FASB Accounting Standards Codification for disclosure about Stock-Based Compensation. This section requires a public entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost will be recognized over the period during which an employee is required to provide service in exchange for the award- the requisite service period (usually the vesting period). No compensation cost is recognized for equity instruments for which employees do not render the requisite service.

  

Net Loss per Share

 

Net loss per common share is computed by dividing net loss by the weighted average common shares outstanding during the period as defined by Financial Accounting Standards, ASC Topic 260, “Earnings per Share.” Basic earnings per common share (“EPS”) calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding.

 

Recent Accounting Pronouncements

 

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which establishes a new lease accounting model for lessees. The updated guidance requires an entity to recognize assets and liabilities arising from financing and operating leases, along with additional qualitative and quantitative disclosures. The amended guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018, with early adoption permitted. In March 2019, the FASB issued ASU 2019-01, Codification Improvements, which clarifies certain aspects of the new lease standard. The FASB issued ASU 2018-10, Codification Improvements to Topic 842, Leases in July 2018. Also in 2018, the FASB issued ASU 2018-11, Leases (Topic 842) Targeted Improvements, which provides an optional transition method whereby the new lease standard is applied at the adoption date and recognized as an adjustment to retained earnings. The amendments have the same effective date and transition requirements as the new lease standard.

 

We intend to adopt ASC 842 on July 1, 2020. The adoption of this guidance is not expected to have any impact on our financial statements.

 

Stockholders’ Equity

 

The Company has authorized 3,000,000,000 shares of Common Stock with a par value of $0.001. As of May 31, 2020, and May 31, 2019, respectively, there were 519,486,000 million shares of Common Stock issued and outstanding, respectively.

 

Additionally, the Company’s authorized capital stock of Preferred Shares consists of 300,000,000 shares divided into three classes of 100,000,000 Preferred Shares each. designated as Class “A”, Class “B” and Class “C.” All shares of Preferred Stock are at par value of $.001 per share. As of May 31, 2020 and 2019 there were 855,000 Preferred “A” shares outstanding.

 

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Preferred “A” shares are super-voting shares, are non-dilutive and they convert only in exchange for the partial or full retirement of debt held by former management, employees or consultants, or as directed by a majority vote of the Board of Directors. The number of Shares of Preferred Stock to be issued to each qualified person (member of Management, employee or consultant) holding a Note shall be determined by the following formula:

 

Each dollar of debt represents one preferred share.

 

NOTE 4 – COMMITMENTS AND CONTINGENCIES

 

The Company did not have any contractual commitments of May 31, 2020, and 2019

 

NOTE 5 –NOTES PAYABLE-RELATED PARY

 

Mr. Lazar, the principal member of the Company’s Court-appointed custodian is considered a related party. During the year ended May 31, 2020, he extended $26,220 in interest free demand loans to the Company.

 

NOTE 6 – PRIOR ASSETS AND LIABILITIES

 

During the period from November 2012 through April 2020, the Company was dormant. Excluding the related party loan described in Note 5. above, the Company had no assets or liabilities.

 

NOTE 7 – SUBSEQUENT EVENTS

 

In accordance with FASB ASC 855-10, Subsequent Events, the Company has analyzed its operations subsequent to June 30, 2020 to the date these financial statements were issued, and has determined that it does not have any material subsequent events to disclose in these financial statements.

 

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ITEM 14. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

 

In its two most recent fiscal years, the Company has had no disagreements with its independent accountants.

 

ITEM 15. FINANCIAL STATEMENTS AND EXHIBITS

 

Exhibit No.   Description
     
2   Notice of Entry of Order, dated December 27, 2019, Case No.: A-19-805642-B
     
3.1   Articles of Incorporation – (Incorporated by reference from Form S-1 filed September 26, 2012 Exhibit 3.1)
     
3.2   Amended Articles of Incorporation (Incorporated by reference from Form S-1 filed September 26, 2012 Exhibit 3.2)
     
3.4   Certificate of Reinstatement/Revival with the State of Nevada, dated December 2, 2019.
     
10.0   Promissory Note
     
23   Consent of Independent Auditor

 

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SIGNATURES

 

Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the Company has duly caused this amended amended registration statement to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Date: October 19, 2020

 

Zyrox Mining International, Inc.

 

By: David Lazar, CEO  
  /s/ David Lazar  
     

 

 

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Dates Referenced Herein   and   Documents Incorporated by Reference

This ‘10-12G/A’ Filing    Date    Other Filings
Filed on:10/19/20CORRESP
9/18/2010-12G
9/17/20
9/15/20
9/1/20
8/5/20
7/1/20
6/30/20
5/31/20
5/30/20
4/29/20
12/27/19
5/31/19
5/30/19
2/28/19
2/27/19
2/26/19
12/16/18
12/15/18
7/1/18
5/31/18
5/16/18
1/1/18
8/15/12
5/12/12
4/30/12
3/12/12
11/8/10
8/17/10
6/3/09
2/15/08
 List all Filings 


2 Previous Filings that this Filing References

  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

 9/18/20  Winvest Group Ltd.                10-12G                 5:14M                                    EdgarAgents LLC/FA
 9/26/12  Winvest Group Ltd.                S-1                    3:1.6M                                   Toppan Merrill/FA
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