Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
___________
FORM 10-K
___________
☒ ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2023
☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to ____________
SOUTH EAST ASIA DEVELOPMENT CORP.
(Exact name of registrant as specified in its charter)
| Wyoming | | 333-220706 | | 81-1002497 |
(State or other jurisdiction
of incorporation) | | (Commission
File Number) | | (IRS Employer
Identification No.) |
Unit 2102, One Global Place
5th Avenue Corner 25th Street
BGC, Taguig City 1630 Philippines
(Address of principal executive offices, including zip code)
Registrant’s telephone number, including area code: +63 (2) 79433419
Former Name of Registrant: IA ENERGY CORP.
Securities registered under Section 12(b) of the Exchange Act:
| Title of each class | Trading Symbols(s) | Name of each exchange on which registered |
| N/A | | |
Securities registered under Section 12(g) of the Exchange Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes ☐ No ☒
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act.
Yes ☐ No ☒
Indicate by check mark whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes ☒ No ☐
Indicate by check mark whether the registrant is a large, accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions 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 registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive- based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☒ No ☐
Issuer’s revenues for its most recent fiscal year: $0.
Since our common stock has not yet been approved for quotation, the aggregate market value of the common stock of South East Asia Development Corp. held by non-affiliates as of June 30, 2023 was $0.
As of April 11, 2024, there were 36,603,800 shares of common stock issued and outstanding.
Documents Incorporated By Reference: None.
SOUTH EAST ASIA DEVELOPMENT CORP.
Report on Form 10-K
FORWARD-LOOKING STATEMENTS
This report contains statements that constitute “forward-looking statements.” These forward-looking statements can be identified by the use of predictive, future-tense or forward-looking terminology like “believes,” “anticipates,” “expects,” “estimates,” “envisions,” “plans,” “projects” or similar terms. These statements appear in a number of places in this report and include statements regarding our intent, belief or current expectations and those of our directors or officers with respect to, among other things: (i) trends affecting our financial condition or results of operations, (ii) our business and growth strategies, and (iii) our financing plans. You are cautioned that any forward-looking statements are not guarantees of future performance and involve significant risks and uncertainties, and that actual results may differ materially from those projected in the forward-looking statements as a result of various factors. Factors that could adversely affect actual results and performance include, among others, the effect of inflation and other negative economic trends and developments on the business of our customers and other barriers, examples being government regulation and competition. All forward-looking statements attributable to us are expressly qualified in their entirety by this foregoing cautionary statement.
Unless otherwise noted, references in this report to the “Company,” “SEAD,” “South East Asia,” “we,” “our,” or “us” means South East Asia Development Corp.
PART I.
ITEM 1. BUSINESS
Company History
South East Asia Development Corp., formerly known as IA Energy Corp., is a Wyoming corporation (the “Company”), We were incorporated on January 6, 2016 in the state of Wyoming, doing business initially as a start-up global waste-to-energy company. During the year ending December 31, 2023, our business office and mailing address was Unit 2102, One Global Place, 5th Avenue Corner 25th Street, BGC, Taguig City 1630 Philippines, and our telephone number was +63 (2) 79433419.
On January 18, 2023, the Company’s majority shareholder entered into a transaction that resulted in a change of control. A description of the Change of Control transaction may be found in the Company’s Form 8-K filed January 24, 2023 and at p. 36, infra. See, Form 8-K
The Company has never filed for bankruptcy and has never been subject to receivership or similar proceedings.
Financial Information
The audited financial statements for the fiscal year ended December 31, 2023 are attached hereto as Item 8 in this annual report.
Operational Overview
Our operations from inception through the Company’s ceasing and abandoning its operations in the Philippines in 2021, have been devoted primarily to start-up and development activities, which include: (i) formation of the Company; (ii) development of our business plan; (iii) development of our proprietary waste-to-energy technology; and (iv) marketing of our proprietary waste-to-energy technology. Prior to ceasing and abandoning its operations in the Philippines, significant research and development had been done in furtherance of the Company’s focus to build and operate a pilot facility to process waste tires, but we had not completed development of the proprietary waste-to-energy technology.
As a result of the Company’s ceasing and abandoning its operations in the Philippines, the Company currently has no business operation.
From our inception on January 6, 2016, until the ceasing and abandoning its operations in the Philippines in 2021, we have had limited operating activities. Since the Change of Control, there continues to be limited operating activities.
During the period from inception on January 6, 2016 through December 31, 2023 we have had no revenues. During the period from inception on January 6, 2016 to December 31, 2023 we have had operating expenses of $5,975,591 which mainly consisted of professional, consulting and business development expenses.
Shell Status
Since early 2020, the Company’s business and research and development activities were adversely affected due to the COVID-19 pandemic, and in 2021 the Company ceased and abandoned its operations in the Philippines, and the Company currently does not have any business activities, and therefor is deemed to be a “shell’ company, whose sole purpose at this time, is to locate and consummate a merger or acquisition with a private entity or to develop and fund the execution of a new business plan.
The Company currently intends to seek to acquire assets or shares of an entity actively engaged in business which generates revenues in exchange for its securities or to develop and fund the execution of a new business plan. The Company has no particular acquisitions in mind and has not entered into any negotiations regarding such an acquisition. The Company's officer and director has not engaged in any preliminary contact or discussions with any representative of any other company regarding the possibility of an acquisition or merger between the Company and such other company as of the date hereof. There are no negotiations or transactions pending.
The Company is also reviewing opportunities to develop and fund the execution of a new business plan from startup rather than the acquisition of an entity actively engaged in business which generates revenues in exchange for its securities. If the Company were to pursue this route out of shell status, it most likely would have to raise funds through a private placement, an exempt offering, or other type of offering.
Business Objectives of the Company
From January 6, 2016 until June 30, 2021, the Company had no or limited business operations. Since July 2021, the Company has determined to direct its efforts and limited resources to pursue potential new business opportunities. The Company's purpose is to seek, investigate and, if such investigation warrants, acquire an interest in business opportunities presented to it by persons or firms who or which desire to seek the perceived advantages of an issuer who has complied with the Exchange Act.
The Company will not restrict its search to any specific business, industry, or geographical location and the Company may participate in a business venture of virtually any kind or nature and we have not established any particular criteria upon which we consider a business opportunity. This discussion of the proposed business herein is purposefully general and is not meant to be restrictive of the Company's virtually unlimited discretion to search for and enter into potential business opportunities. Management anticipates that it may be able to participate in only one potential business venture because the Company has nominal assets and limited financial resources.
General Overview
Covid-19.
The corona virus (“Covid-19”) pandemic had a worldwide adverse effect. Future events, such as a significant outbreak of Covid-19 variations or other infectious diseases of pandemic proportions, could again adversely affect, the economies and financial markets worldwide. Accordingly, the business of any potential target business with which we consummate a business combination or the development, funding, and execution of a new business plan from startup, could be materially and adversely affected in the event of another pandemic.
Furthermore, we may be unable to complete an initial business combination if concerns relating to another pandemic again restricts travel, limits the ability to have meetings with potential investors or the target company’s personnel, vendors and services providers.
The extent to which another Covid-19 or other pandemic event impacts our search for an initial business combination will depend on future developments, which are highly uncertain and cannot be predicted.
In addition, our ability to consummate a transaction may be dependent on our ability to raise additional equity and debt financing which may be impacted by another pandemic event, which could again increase market volatility, decrease market liquidity making third-party financing unavailable on terms acceptable to us or at all.
Further, the disruptions have negatively affected the stock market and investor sentiment. The perceived value of the Company and the price of our common stock may be affected as investors favor and seek less volatile or traditional companies (or assume more risk) during the times of market uncertainty and instability.
Russia Ukraine Conflict.
The extent to which the Russia Ukraine conflict impacts our search for an initial business combination, or developing and funding the execution of a new business plan will depend on future developments, which are highly uncertain, cannot be predicted and may include but are not limited to the potential effect of bans, sanction programs, additional licensing requirements, and/or boycotts as they may have an effect on the merger or acquisition or business combination with a private entity or funding a new business plan. The degree of uncertainty surrounding an existing or escalating conflict is uncertain and cannot be predicted, including added information which may emerge concerning the conflict and its impact. We have no basis to evaluate the possible risks of the Russia Ukraine conflict.
Israel Palestinian Conflict.
The extent to which the Israel Palestinian conflict impacts our search for an initial business combination, or developing and funding the execution of a new business plan will depend on future developments, which are highly uncertain, cannot be predicted and may include but are not limited to the conflict could disruption of trade and global crude oil supply in the Middle East, affecting countries in the region and their trading partners. Over 20% of the world's crude supply comes from West Asia, conflict in the region may drastically push up the Crude oil prices worldwide.
The degree of uncertainty surrounding an existing or escalating conflict is uncertain and cannot be predicted, including added information which may emerge concerning the conflict and its impact. We have no basis to evaluate the possible risks of the Israel Palestinian conflict.
Climate-Related Issues.
The extent to which the Company may be required to make certain climate-related disclosures in connection with the business of any potential target business is unknown; however, the Company may be required to provide information about climate-related risks that are reasonably likely to have a material impact on the target business, its results of operations, or financial condition, and may be required to provide certain climate-related financial statement metrics in a note to the audited financial statements. We have no basis to evaluate the climate and climate related risks. The degree of uncertainty and impact cannot be predicted.
The Company is a Shell Company.
At present, the Company is a development stage company with no revenues, nominal 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 or to develop and fund the execution of a new business plan.
As a result, the Company is a shell company. Rule 405 and 12b-2 of the Exchange Act defines a shell company as an issuer that that has no or nominal operations and either (i) no or nominal assets, (ii) assets consisting solely of cash and cash equivalents; or (iii) assets consisting of any amount of cash and cash equivalents and nominal other assets.
A shell issuer may also be a blank check company or a blind pool company, a company in the developmental stage, any company that has no specific business plan or purpose, or a company that has as its business plan to merge with or acquire an unidentified third property. Accordingly, the Company may be required, under current and proposed new rules and amendments of the SEC, to provide enhanced disclosures for investor protection in the event that we engage in a merger or acquisition with an unidentified company substantially similar to those required in registration statements for an initial public offering.
Effect of Amended Rule 15c2-11 on the Company’s securities.
On September 16, 2020, the U.S. Securities and Exchange Commission (SEC or Commission) adopted amendments to Rule 15c2-11 under the Securities Exchange Act of 1934 (Final Rule).
Rule 15c2-11 (Rule) governs the publication or submission of quotations by broker-dealers in a quotation medium other than a national securities exchange, that is, the over-the-counter (OTC) market. Before a broker-dealer may initiate or resume quotations for a security in a quotation medium, the broker-dealer must review key, basic information about the issuer of the security.
To be eligible for public quotations on an ongoing basis, Amended Rule 15c2-11's modified the "piggyback exemption" that required that (i) the specified current information about the company is publicly available, and (ii) the security is subject to a one-sided (i.e., a bid or offer) priced quotation, with no more than four business days in succession without a quotation. Under Amended Rule 15c2-11, shell companies like the Company (and formerly suspended securities) may only rely on the piggyback exemption in certain limited circumstances. The Amended Rule 15c2-11 requires, among other requirements, that a broker-dealer has a reasonable basis for believing that information about the issuer of securities is accurate. Our security holders may find it more difficult to deposit common stock with a broker-dealer, and if deposited, more difficult to trade the securities on the OTC Markets Group, Inc. Pink Open Market Platform (“Pink Sheets”). The Company intends to provide the specified current information under the Exchange Act but there is no assurance that a broker-dealer will accept our common stock or if accepted, that the broker-dealer will rely on our disclosure of the specified current information.
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 of 1933, as amended (“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 or other types of exempt offerings because purchasers of securities in such unregistered offerings or otherwise exempt 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.
Available Information
South East Asia Development Corp. files quarterly and annual reports, as well as other information with the Securities and Exchange Commission (“Commission”) under File No. 333-220706. Such reports and other information filed with the Commission can be inspected and copied at the public reference facilities maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates, and at various regional and district offices maintained by the Commission throughout the United States. Information about the operation of the Commission’s public reference facilities may be obtained by calling the Commission at 1-800-SEC-0330.
The Commission also maintains a website at http://www.sec.gov that contains reports and other information regarding the Company and other registrants that file electronic reports and information with the Commission.
ITEM 1A. RISK FACTORS
FORWARD-LOOKING STATEMENTS
This report contains statements that constitute “forward-looking statements.” These forward-looking statements can be identified by the use of predictive, future-tense or forward-looking terminology like “believes,” “anticipates,” “expects,” “estimates,” “envision” or similar terms. These statements appear in a number of places in this report and include statements regarding our intent, belief or current expectations and those of our directors or officers with respect to, among other things: (i) trends affecting our financial condition or results of operations, (ii) our business and growth strategies, and (iii) our financing plans. You are cautioned that any forward-looking statements are not guarantees of future performance and involve significant risks and uncertainties, and that actual results may differ materially from those projected in the forward-looking statements as a result of various factors. Factors that could adversely affect actual results and performance include, among others, the effect of inflation and other negative economic trends and developments on the business of our customers and other barriers, government regulation and competition. All forward-looking statements attributable to us are expressly qualified in their entirety by the foregoing cautionary statement. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as the result of new information, future events or otherwise.
Risks Related to the Company
The Company has not identified a target business.
The Company’s effort in identifying a prospective target business will not be limited to a particular industry and the Company may 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, we are 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 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 an elevated 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.
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.
As of December 31, 2022 until the Change of Control consummated on January 18, 2023, John R. Munoz was the beneficial owner of 70.87% of the issued and outstanding shares of common stock of the Company and had broad flexibility in identifying and selecting a prospective target business. See “Change of Control” under Item 12. After the Change of Control, our CEO, JJ C. Javier, is the beneficial owner of 70.87% of the issued and outstanding shares of common stock of the Company and has 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; |
| ● | 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 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 manage 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 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 December 31, 2023 and 2022, 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.
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.
As of December 31, 2023, JJ C.Javier, Chief Executive Officer, was our sole executive officer. Mr. Javier was not obligated to devote any specific number of hours per week and, in fact, intends to devote only as much time as he deems 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. See “Change of Control” under Item 12.
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.
Management has not identified and is not currently negotiating a new business opportunity for us. In the future, management may become associated or affiliated with entities engaged in business activities similar to those we intend to conduct. In such event, management may have conflicts of interest in determining to which entity a particular business opportunity should be presented. In the event that 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, availability of audited financial statements, current capitalization, 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 act in what we believe will be in the best interests of the stockholders of the Company. The Company shall not enter into a transaction with a target business that is affiliated with management.
The Company has a limited operating history and limited resources.
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 December 31, 2023, we had $-0- in cash and an accumulated deficit of $5,975,591. Our audited financial statements for the years ended December 31, 2023 and December 31, 2022 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 may not be 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 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 even the broader target 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 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 we will properly ascertain or assess all of the significant risk factors. There can be no assurance that any prospective business combination will benefit stockholders or prove to be more favorable to stockholders than any other investment that may be made by stockholders and investors.
Unspecified and unascertainable risks.
There is no basis for stockholders 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.
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 we 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. 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 officer and director 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. Management of the Company is engaged in other business endeavors and is not obligated to contribute any specific number of his hours per week to the Company’s affairs.
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 may 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. If this occurs, 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.
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 we 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 or development of a startup entity, 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 or develop a new startup entity, 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.
Our present management most likely will not remain after we complete a business combination.
A business combination involving the issuance of our common stock will, in all likelihood, result in the stockholders of a private company obtaining a controlling interest in us. Any such business combination may require our management to sell or transfer all or a portion of the Company's common stock held and/or have Thomas K. Emmitt resign as a member of the Board of Directors. The resulting change in our control would result in a corresponding reduction in or elimination of any participation in our future affairs.
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 we 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.
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 majority stockholder, notwithstanding the fact that there is no written agreement to pay such costs.
The Company’s majority stockholder has a 70.87% common stock equity interest in the Company and thus is in a position to totally influence certain actions requiring stockholder vote.
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, subject to the desires of the majority stockholder. 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 stockholders as a consequence of the majority stockholder’s significant equity interest. 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.
Sections 13 and 15(d) of the Exchange Act require companies subject thereto to provide certain information about significant acquisitions, including certified financial statements for the company acquired, covering one, two, or three years, depending on the relative size of the acquisition. The time and additional costs that may be incurred by some target entities to prepare such statements may significantly delay or essentially preclude consummation of an otherwise desirable acquisition by the Company. Acquisition prospects that do not have or are unable to obtain the required audited statements may not be appropriate for acquisition so long as the reporting requirements of the Exchange Act are applicable.
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 five (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.
The Investment Company Act of 1940 creates a situation wherein we would be required to register and could be required to incur substantial additional costs and expenses.
Although we will be subject to regulation under the Exchange Act, management believes the Company will not be subject to regulation under the Investment Company Act of 1940, insofar as we will not be engaged in the business of investing or trading in securities. In the event we engage in business combination that result in us holding passive investment interests in a number of entities, we could be subject to regulation under the Investment Company Act of 1940. In such event, we would be required to register as an investment company and could be expected to incur significant registration and compliance costs. We have obtained no formal determination from the SEC as to the status of our Company under the Investment Company Act of 1940 and, consequently, any violation of such Act would subject us to material adverse consequences.
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.”
As of December 31, 2023, JJ C. Javier was the Company’s sole director. See “Change of Control” under Item 12. 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 now consists of the one director who may seek reimbursement. Because our director will not be deemed “independent,” we will not have the benefit of an 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.
Our present management most likely will not remain after we complete a business combination.
A business combination involving the issuance of our common stock will, in all likelihood, result in the stockholders of a private company obtaining a controlling interest in us. Any such business combination may require our management to sell or transfer all or a portion of the Company's common stock held and/or have Thomas K. Emmitt resign as a member of the Board of Directors. The resulting change in our control would result in a corresponding reduction in or elimination of any participation in our future affairs.
At the time we do any business combination, each stockholder will most likely hold a substantially lesser percentage ownership in the Company.
Our current primary plan of operation is based upon a business combination with a private concern that, in all likelihood, would result in the Company issuing securities to stockholders of any such private company. The issuance of our previously authorized and unissued common stock would result in reduction in percentage of shares owned by our present and prospective stockholders and may result in a change in our control or in our management.
General Economic Risks.
The Company’s current and future business objectives and plan of operation are dependent, in large part, on the state of the general economy and the current Covid 19 pandemic. A continuation of a pandemic or 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.
Additional Risks Related to Our Common Stock
The Company’s shares of common stock are currently not traded.
There is current no market for, and the Company’s common stock is currently not traded. Thus, any investment in our common stock may result in the inability of an investor to liquidate any investment to cash in a timely or cost-effective manner.
Rule 144 Risks.
Stockholders who receive the Company’s restricted securities in a business combination (and certain of our existing stockholders) will not be able to sell our common stock in reliance on Rule 144 without registration until one year after we have completed our initial business combination and complied with the rules and regulations of the SEC. Rule 144 is a non-exclusive safe harbor from the definition of “underwriter” in Section 2(a)(11) of the Securities Act that applies to restricted securities. Restricted securities are securities acquired in unregistered, private sales from the Company or from an affiliate of the Company. Control securities are those held by an affiliate of the Company. An affiliate is a person, such as an executive officer, a director or large stockholder, in a relationship of control with the issuer.
Accordingly, subsection (i) to Rule 144 prohibits or limits the resale (public) of the Company’s common stock. Under Rule 144(i), one year needs to pass from the date the Company ceased to be a shell company, files reports under the Exchange Act, and has filed the Form 10 type information on a Form 8-K. Further, stockholders holding restricted securities may not be able to rely on Rule 144 to sell their stock until the Company is current on all reports and other materials required to be filed with its filings for one year.
Dividends unlikely.
The Company does not expect to pay dividends for the foreseeable future because we have 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.
ITEM 1B. Unresolved Staff Comments
Not required for smaller reporting companies.
ITEM 1C. CYBERSECURITY
Cybersecurity Risk Management and Strategy
We have not yet developed a cybersecurity risk management program, though we are in the process of assessing the potential risks. As of this time, we have determined that risks from cybersecurity threats have not materially affected and are not reasonably likely to materially affect our business strategy, results of operations, or financial condition.
Cybersecurity Governance
Our Board of Directors has oversight responsibility for risks to our company, including incidents related to cybersecurity threats.
There are more changes coming.
ITEM 2. PROPERTIES
Prior to the Change of Control, the Company’s corporate office was located at One World Trade Center, Suite 130, Long Beach, California 90831. After the Change of Control, the Company’s corporate office was located at Unit 2102, One Global Place, 5th Avenue Corner 25th Street, BCG, Taguig City 1630 Philippines
Prior to the Change of Control, the Company leased the offices, pursuant to a written sub-lease on a month-to-month basis occupying approximately 800 square feet in exchange for $500 per month. After the Change of Control, we occupied office space in accordance with an oral agreement with JJ Javier. No rent has been paid and there is no agreement for the payment of rent.
The Company intends to secure additional office and administrative facilities when necessary. As the company continues to grow, the facilities and employment-related expenses will likely increase significantly.
ITEM 3. LEGAL PROCEEDINGS
We are not a party to any pending legal proceeding. No federal, state or local governmental agency is presently contemplating any proceeding against the Company. No director, executive officer or affiliate of the Company or owner of record or beneficially of more than five percent of the Company's common stock is a party adverse to the Company or has a material interest adverse to the Company in any proceeding.
ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable.
PART II.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Market Information
Currently, our securities are not traded on any market.
Holders
We had 36 registered stockholders of record of our common stock as of December 31, 2023. Registered holders do not include those stockholders whose stock has been issued in street name.
Dividends
Common Stock - No dividends have ever been paid on the Common Stock and the Company does not currently anticipate paying any cash or other dividends on the Common Stock. Future dividend policy will be determined by the Board of Directors of the Company in light of prevailing financial need and earnings, if any, of the Company and other relevant factors.
Preferred Stock - Under our articles of incorporation, our Board of Directors is authorized, without stockholder action, to issue preferred stock in one or more series and to fix the number of shares and rights, preferences, and limitations of each series. Among the specific matters that may be determined by the Board of Directors are the dividend rate, the redemption price, if any, conversion rights, if any, the amount payable in the event of any voluntary liquidation or dissolution of our company, and voting rights, if any. As of the date of this report, no shares of preferred stock were issued and outstanding.
Securities Authorized for Issuance Under Equity Compensation Plans
As of December 31, 2023 the Company has not adopted any equity compensation or similar type of plans.
Issuer Purchases of Equity Securities
There were no stock repurchases during the year ended December 31, 2023.
Recent Sales of Unregistered Securities
None.
ITEM 6. [Reserved]
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion of our financial condition and results of operations should be read in conjunction with the financial statements and related notes to the financial statements included elsewhere in this annual report. Some of the statements under “Management’s Discussion and Analysis,” “Business” and elsewhere herein may include forward-looking statements which reflect our current views with respect to future events and financial performance. Statements which include the words “expect,” “intend,” “plan,” “believe,” “project,” “anticipate,” “will,” and similar statements of a future or forward-looking nature identify forward-looking statements for purposes of the federal securities laws or otherwise.
All forward-looking statements address such matters that involve risks and uncertainties. Accordingly, there are or will be important factors that could cause our actual results to differ materially from those indicated in these statements. We undertake no obligation to publicly update or review any forward-looking statements, whether as a result of new information, future developments or otherwise.
If one or more of these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may vary materially from what we projected. Any forward-looking statements you read herein reflect our current views with respect to future events and are subject to these and other risks, uncertainties and assumptions relating to our written and oral forward-looking statements attributable to us or individuals acting on our behalf and such statements are expressly qualified in their entirety by this paragraph.
Overview
Prior to the Change in Control we were a waste-to-energy solutions company. Our operations to date, including after the Change of Control, have been devoted primarily to start-up and development activities, which include: (i) formation of the Company; and, (ii) development of our business plan. General and administrative expenses have been comprised of consulting and business development fees; occupancy and office expenses; outside legal, accounting and other professional fees; travel and other miscellaneous office and administrative expenses.
Because we have incurred losses, income tax expenses are immaterial. No tax benefits have been booked related to operating loss carryforwards, given our uncertainty of being able to utilize such loss carryforwards in future years. We anticipate incurring additional losses during the coming year.
Results of Operations
For the years ended December 31, 2023 and 2022
Revenues. For the years ended December 31, 2023 and 2022, net revenues were $-0-.
Consulting fees. Consulting fees for the years ended December 31, 2023 and 2022 were $106,419 and $-0-, respectively. Consulting fees consist of outside consultants who are not formally employees of the Company providing various services including administration, legal, marketing and finance. We expect consulting fees to increase in the future as we ramp up our operations.
Professional and accounting fees. Professional and accounting fees for the years ended December 31, 2023 and 2022 were $102,037 and $38,300, respectively. The increase in professional fees was due to legal fees associated with the change in control as described in Note 7 to the financial statements. Professional fees also consist of the fees for the audits and reviews of the Company’s financial statements as well as the filings with the Securities and Exchange Commission. The Company anticipates that professional fees will increase commensurate with an increase in our operations.
Other selling, general and administrative expenses. Other selling, general and administrative expenses for the years ended December 31, 2023 and 2022 were $5,507 and $6,583, respectively. We expect that selling, general and administrative expenses will increase as we add personnel to build our business.
Other Income (Expense). The Company had net other income of $324,299 for the year ended December 31, 2023. Included in this amount is the gain on forgiveness of debt of $340,233 that was recorded as part of the change in control as described in Note 7 in the notes to the financial statements. The stock purchase agreement stated that all liabilities due to the seller in the transaction would be forgiven. The Company also incurred interest expense of $15,934 for the year ended December 31, 2023. The Company had net other income of $-0- for the year ended December 31, 2022.
Liquidity and Capital Resources
As of December 31, 2023, our primary source of liquidity consisted of $-0- in cash and cash equivalents. Since inception, we have financed our operations through a combination of short and long-term loans, and through the private placement of our common stock. For the quarter ended April 30,2024, the Company used $204 in operating activities which consisted of a net loss of $110,336, gain on forgiveness of debt of $340,233, interest expense of $15,934, an increase in advances to vendors of $109,689 and an increase in accounts payable and accrued liabilities of $323,448.
We have sustained significant net losses which have resulted in an accumulated deficit at December 31, 2023 of $5,975,591 and are currently experiencing a substantial shortfall in operating capital which raises doubt about our ability to continue as a going concern. We generated net income for the year ended December 31, 2023 of $110,336. The net income was primarily the result of the forgiveness of debt rather than from operations. Without additional revenues, working capital loans, or equity investment, there is substantial doubt as to our ability to continue operations.
We believe these conditions have resulted from the inherent risks associated with small public companies. Such risks include, but are not limited to, the ability to (i) generate revenues and sales of our products and services at levels sufficient to cover our costs and provide a return for investors, (ii) attract additional capital in order to finance growth, and (iii) successfully compete with other comparable companies having financial, production and marketing resources significantly greater than those of the Company.
We believe that our capital resources are insufficient for ongoing operations, with minimal current cash reserves, particularly given the resources necessary to expand our business. We will likely require considerable amounts of financing to make any significant advancement in our business strategy. There is presently no agreement in place that will guarantee financing for our Company, and we cannot assure you that we will be able to raise any additional funds, or that such funds will be available on acceptable terms. Funds raised through future equity financing will likely be substantially dilutive to current stockholders. Lack of additional funds will materially affect our Company and our business and may cause us to substantially curtail or even cease operations. Consequently, you could incur a loss of your entire investment in the Company.
Related Party Transactions
Loans Payable, Related Party
The Company periodically received advances from a corporation controlled by John Munoz, previous beneficial owner of 25,000,000 shares of our common stock and Chief Executive Officer of the Company from inception on January 6, 2016 to July 25, 2017. These loans were non-interest bearing and due on demand. During the years ended December 31, 2023 and 2022, the Company received additional loans of $16,002 and $38,431, respectively. The amount of loans payable to this corporation as of December 31, 2023 and 2022 was $-0- and $291,231, respectively.
Sublease Agreements
Effective December 1, 2019, the Company entered into a Sublease Agreement with the related party described in the first paragraph of Note 6 for the Company’s use of office space in Long Beach, California at a Monthly Base Rent of $500 per month. The Sublease is month to month and terminable by either party upon 30 days written notice.
For the years ended December 31, 2023 and 2022, the Company recorded $-0- and $6,000, respectively, in rent expense related to this Sublease which is included in other selling, general and administrative expenses. The amount due on the Sublease Agreements as of December 31, 2023 and 2022 was $-0- and $33,000, respectively.
Advances from related party
During the year ended December 31, 2023, a company controlled by JJ Javier, Chief Executive Officer of the Company, advanced to the Company a total $291,359 by paying for operating expenses on behalf of the Company. Interest accrued of $15,934 consists of the actual interest incurred by JJ Javier and passed on to the Company.
We do not have any off-balance sheet arrangements.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements.
Critical Accounting Policies
We believe the following more critical accounting policies are used in the preparation of our financial statements:
Use of Estimates. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. On a periodic basis, management reviews those estimates, including those related to valuation allowances, loss contingencies, income taxes, and projection of future cash flows.
Research and Development. Research and development costs are charged to operations when incurred and are included in operating expenses.
Recent Accounting Pronouncements
There were various accounting standards and interpretations recently issued, none of which are expected to have a material impact on the Company's consolidated financial position, operations or cash flows.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
SOUTH EAST ASIA DEVELOPMENT CORP.
FINANCIAL STATEMENTS
December 31, 2023 and 2022
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders of
South East Asia Development Corp.
Opinion on the Financial Statements
We have audited the accompanying balance sheets of South East Asia Development Corp. (the Company) as of December 31, 2023, and the related statements of operations, stockholders’ equity, and cash flows for each of the year 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 December 31, 2023, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.
Going Concern Considerations
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company has suffered recurring losses since inception and has not achieved profitable operations, which raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are described in Note 5. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the 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 audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Green Growth CPAs
| May 31, 2024 |
| | |
| We have served as the Company’s auditor since 2023. |
| | |
Los Angeles, California PCAOB ID Number 6580 |
SOUTH EAST DEVELOPMENT CORP.
(formerly IA Energy Corp.)
Balance Sheets
| | | December 31, | | | December 31, | |
| | | 2023 | | | 2022 | |
| ASSETS | | | | | | | | |
| | | | | | | | | |
| CURRENT ASSETS | | | | | | | | |
| | | | | | | | | |
| Cash and cash equivalents | | $ | – | | | $ | 204 | |
| Advances to vendors (See Note 2) | | | 109,689 | | | | – | |
| | | | | | | | | |
| TOTAL CURRENT ASSETS AND TOTAL ASSETS | | $ | 109,689 | | | $ | 204 | |
| | | | | | | | | |
| LIABILITIES AND STOCKHOLDERS' EQUITY | | | | | | | | |
| | | | | | | | | |
| CURRENT LIABILITIES | | | | | | | | |
| | | | | | | | | |
| Accounts payable and accrued liabilities | | $ | 16,087 | | | $ | – | |
| Accounts payable, related party | | | – | | | | 33,000 | |
| Accrued interest, related party | | | 15,934 | | | | – | |
| Loans payable, related party (See Note 6) | | | 291,359 | | | | 291,231 | |
| | | | | | | | | |
| Total Current Liabilities | | | 323,380 | | | | 324,231 | |
| | | | | | | | | |
| TOTAL LIABILITIES | | | 323,380 | | | | 324,231 | |
| | | | | | | | | |
| STOCKHOLDERS' EQUITY (DEFICIT) | | | | | | | | |
| | | | | | | | | |
| Preferred stock, $0.0001 par value; 20,000,000 shares authorized, -0- shares issued | | | – | | | | – | |
| Common stock, $0.0001 par value; 500,000,000 shares authorized, 36,603,800 and 36,603,800 shares issued and outstanding, respectively | | | 3,660 | | | | 3,660 | |
| Additional paid-in capital | | | 5,758,240 | | | | 5,758,240 | |
| Accumulated deficit | | | (5,975,591 | ) | | | (6,085,927 | ) |
| | | | | | | | | |
| Total Stockholders' Equity (Deficit) | | | (213,691 | ) | | | (324,027 | ) |
| | | | | | | | | |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | | $ | 109,689 | | | $ | 204 | |
The accompanying notes are an integral part of these financial statements
SOUTH EAST DEVELOPMENT CORP.
(formerly IA Energy Corp.)
Statements of Operations
| | | | | | | |
| | | For the Years Ended
December 31, | |
| | | 2023 | | | 2022 | |
| | | | | | | |
| NET REVENUES | | $ | – | | | $ | – | |
| | | | | | | | | |
| OPERATING EXPENSES | | | | | | | | |
| | | | | | | | | |
| Consulting fees | | | 106,419 | | | | – | |
| Professional and accounting fees | | | 102,037 | | | | 38,300 | |
| Other selling, general and administrative | | | 5,507 | | | | 6,583 | |
| | | | | | | | | |
| Total Operating Expenses | | | 213,963 | | | | 44,883 | |
| | | | | | | | | |
| LOSS FROM OPERATIONS | | | (213,963 | ) | | | (44,883 | ) |
| | | | | | | | | |
| OTHER INCOME (EXPENSES) | | | | | | | | |
| | | | | | | | | |
| Interest expense | | | (15,934 | ) | | | – | |
| Gain on forgiveness of debt (See Note 7) | | | 340,233 | | | | – | |
| | | | | | | | | |
| Total Other Income (Expenses) | | | 324,299 | | | | – | |
| | | | | | | | | |
| NET INCOME (LOSS) | | $ | 110,336 | | | $ | (44,883 | ) |
| | | | | | | | | |
| Net loss per common share - basic and diluted | | $ | (0.00 | ) | | $ | (0.00 | ) |
| | | | | | | | | |
| Weighted average common shares outstanding - basic and diluted | | | 36,603,800 | | | | 36,603,800 | |
The accompanying notes are an integral part of these financial statements
SOUTH EAST DEVELOPMENT CORP.
(formerly IA Energy Corp.)
Statements of Stockholders' Equity (Deficit)
For the Period from December 31, 2021 through December 31, 2023
| | | | | | | | | | | | | | | | |
| | | | | | | | | Additional | | | | | | Total | |
| | | Common Stock | | | Paid-in | | | Accumulated | | | Stockholders' | |
| | | Shares | | | Amount | | | Capital | | | Deficit | | | Equity | |
| | | | | | | | | | | | | | | | |
| Balance, December 31, 2021 | | | 36,603,800 | | | $ | 3,660 | | | $ | 5,758,240 | | | $ | (6,041,044 | ) | | $ | (279,144 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| Net loss for the year ended December 31, 2022 | | | – | | | | – | | | | – | | | | (44,883 | ) | | | (44,883 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| Balance, December 31, 2022 | | | 36,603,800 | | | | 3,660 | | | | 5,758,240 | | | | (6,085,927 | ) | | | (324,027 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| Net income for the year ended December 31, 2023 | | | – | | | | – | | | | – | | | | 110,336 | | | | 110,336 | |
| | | | | | | | | | | | | | | | | | | | | |
| Balance, December 31, 2023 | | | 36,603,800 | | | $ | 3,660 | | | $ | 5,758,240 | | | $ | (5,975,591 | ) | | $ | (213,691 | ) |
The accompanying notes are an integral part of these financial statements
SOUTH EAST DEVELOPMENT CORP.
(formerly IA Energy Corp.)
Statements of Cash Flows
| | | | | | | |
| | | For the Years Ended
December 31, | |
| | | 2023 | | | 2022 | |
| | | | | | | |
| CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | | | | |
| | | | | | | | | |
| Net income (loss) | | $ | 110,336 | | | $ | (44,883 | ) |
| Adjustments to reconcile net loss to net cash used by operating activities: | | | | | | | | |
| Gain on forgiveness of debt | | | (340,233 | ) | | | – | |
| Interest expense | | | 15,934 | | | | – | |
| Changes in operating assets and liabilities: | | | | | | | | |
| Advances to vendor | | | (109,689 | ) | | | – | |
| Accounts payable and accrued liabilities | | | 323,448 | | | | – | |
| Accounts payable, related party | | | – | | | | 6,000 | |
| | | | | | | | | |
| Net Cash Used by Operating Activities | | | (204 | ) | | | (38,883 | ) |
| | | | | | | | | |
| CASH FLOWS FROM INVESTING ACTIVITIES | | | – | | | | – | |
| | | | | | | | | |
| CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | | | | |
| | | | | | | | | |
| Payments on related party loans | | | – | | | | (500 | ) |
| Proceeds from related party loans | | | – | | | | 38,431 | |
| | | | | | | | | |
| Net Cash Provided by Financing Activities | | | – | | | | 37,931 | |
| | | | | | | | | |
| NET DECREASE IN CASH AND CASH EQUIVALENTS | | | (204 | ) | | | (952 | ) |
| | | | | | | | | |
| CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | | | 204 | | | | 1,156 | |
| | | | | | | | | |
| CASH AND CASH EQUIVALENTS, END OF PERIOD | | $ | – | | | $ | 204 | |
| | | | | | | | | |
| SUPPLEMENTAL CASH FLOW INFORMATION | | | | | | | | |
| | | | | | | | | |
| Non-cash Activities: | | | | | | | | |
| Gain on forgiveness of debt | | $ | 340,233 | | | $ | – | |
| Payments of expenses by Related Parties on behalf of the Company | | $ | 291,359 | | | $ | – | |
The accompanying notes are an integral part of these financial statements
SOUTH EAST DEVELOPMENT CORP.
(formerly IA Energy Corp.)
Notes to Financial Statements
December 31, 2023
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
IA Energy Corp. (the Company) was incorporated in the State of Wyoming on January 6, 2016. Prior to the Change in Control we were an emerging growth waste-to-energy solutions company. Our operations to date, including after the Change of Control, have been devoted primarily to start-up and development activities, which include: (i) formation of the Company; and, (ii) development of our business plan.
On May 4, 2023, the Company filed Articles of Amendment with the Wyoming Secretary of State to change the name of the Company to South East Asia Development Corp.
NOTE 2 - GOING CONCERN
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company has sustained significant net losses which have resulted in an accumulated deficit at December 31, 2023 of $5,975,591 and has experienced periodic cash flow difficulties, all of which raise substantial doubt regarding the Company’s ability to continue as a going concern. Furthermore, the accumulated deficit has absorbed the equity reserves and common stock resulting in negative stockholders’ equity at December 31, 2023 and 2022 of $213,691 and $324,027, respectively.
The continuation of the Company as a going concern is dependent upon obtaining additional working capital. The management of the Company has developed a strategy which it believes will accomplish this objective through short term loans from related parties and additional equity investments which will enable the Company to continue operations for the coming year. However, there is no assurance that these objectives will be met. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might result from the outcome of this uncertainty.
NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES
This summary of significant accounting policies of the Company is presented to assist in understanding the Company’s financial statements. The financial statements and notes are representations of the Company’s management who are responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the financial statements. The following policies are considered to be significant:
The Company recognizes income and expenses based on the accrual method of accounting. The Company has elected a calendar year-end.
| | b. | Cash and Cash Equivalents |
Cash equivalents are generally comprised of certain highly liquid investments with original maturities of less than three months.
During the year ended December 31, 2023, the Company advanced a total of $109,689 to a vendor of the company. These advances will be offset against future payments paid to the vendor.
| | d. | Use of Estimates in the Preparation of Financial Statements |
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
The Company determines revenue recognition based upon the following five (5) criteria:
Step 1 Identification of the contract with the customer.
Step 2 Identification of promised goods and services and evaluation of whether the promised goods and services are distinct performance obligations.
Step 3 Determination of the transaction price.
Step 4 Allocation of the transaction price to distinct performance obligations
Step 5 Attribution of revenue for each distinct performance obligation
During the years ended December 31, 2023 and 2022, respectively, the Company recorded $-0- revenues.
The Company accounts for income taxes using the asset and liability method. Under this method, deferred income taxes are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which differences are expected to reverse. A valuation allowance is established to reduce deferred tax assets if it is more likely than not that all or some portion of such deferred tax assets will not be realized. A full allowance against deferred tax assets was provided as of December 31, 2023 and 2022.
At December 31, 2023, the Company had net operating loss carryforwards which may be offset against future taxable income. No tax benefit has been reported in the financial statements because the potential tax benefits of the net operating loss carryforwards are offset by a valuation allowance of the same amount.
Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carryforwards for Federal income tax reporting purposes are subject to annual limitations. Should a significant change in ownership occur, net operating loss carryforwards may be limited as to future use.
| | f. | Basic and Diluted Net Loss per Share of Common Stock |
Basic net loss per common share is based on the weighted average number of shares outstanding during the periods presented. Diluted earnings per share is computed using the weighted average number of common shares plus dilutive common share equivalents outstanding during the period.
| | g. | Recent Accounting Pronouncements |
Certain accounting pronouncements have been issued by the FASB and other standard-setting organizations which are not yet effective and have not yet been adopted by the Company. The impact on the Company’s financial position and results of operations from adoption of these standards is not expected to be material.
| | h. | Use of Estimates and Assumptions |
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.
NOTE 4 - EQUITY TRANSACTIONS
The Company has 500,000,000 shares of common stock authorized with a par value of $0.0001. 25,000,000 shares of common stock were issued to the founder of the Company on incorporation.
NOTE 5 - FINANCIAL INSTRUMENTS
Our financial instruments consist of cash and cash equivalents, accounts payable and loans payable. The carrying amount of these assets and liabilities approximate fair value due to their short-term nature.
NOTE 6 - RELATED PARTY TRANSACTIONS
Loans Payable, Related Party
The Company periodically received advances from a corporation controlled by John Munoz, previous beneficial owner of 25,000,000 shares of our common stock and Chief Executive Officer of the Company from inception on January 6, 2016 to July 25, 2017. These loans were non-interest bearing and due on demand. During the years ended December 31, 2023 and 2022, the Company received additional loans of $16,002 and $38,431, respectively. The amount of loans payable to this corporation as of December 31, 2023 and 2022 was $-0- and $291,231, respectively.
Sublease Agreements
Effective December 1, 2019, the Company entered into a Sublease Agreement with the related party described in the first paragraph of Note 6 for the Company’s use of office space in Long Beach, California at a Monthly Base Rent of $500 per month. The Sublease is month to month and terminable by either party upon 30 days written notice.
For the years ended December 31, 2023 and 2022, the Company recorded $-0- and $6,000, respectively, in rent expense related to this Sublease which is included in other selling, general and administrative expenses. The amount due on the Sublease Agreements as of December 31, 2023 and 2022 was $-0- and $33,000, respectively.
Advances from related party
During the year ended December 31, 2023, a company controlled by JJ Javier, Chief Executive Officer of the Company, advanced to the Company a total $291,359 by paying for operating expenses on behalf of the Company. Interest accrued of $15,934 consists of the actual interest incurred by JJ Javier and passed on to the Company.
NOTE 7 - CHANGE OF CONTROL
Southeast Asia Development (“Company” or “IA Energy”), John R. Munoz (“Seller” or “Munoz”), and JJ C. Javier (“Purchaser” or “Javier”) entered into a Stock Purchase Agreement (“Agreement”) on November 14, 2022 wherein and whereby, the Purchaser was to acquire 25,025,000 Shares of Common Stock of the Company from the Seller. The Company, Munoz, and Javier will be collectively referred to as, the “Parties.”
The Seller indicated that he was the beneficial and owners of record of 25,025,000 Shares of Common Stock (“Control Shares”) of the Company. The Control Shares to be sold under the Agreement represented 68.37 % of the total shares issued and outstanding (“Change of Control”). The purchase price (“Purchase Price”) for the Control Shares was Three Hundred Thousand Dollars ($300,000).
On January 18, 2023, the Parties described in Note 7 entered into the First Amendment to Stock Purchase Agreement (“Amendment”).
The Amendment provided that the Purchaser was to purchase all 25,943,800 shares of Common Stock (the “Control Shares”) owned by Munoz for the aggregate purchase price of $300,000, which was an additional 918,800 shares of common stock. The Control Shares sold pursuant to the Agreement and the Amendment represents 70.877% of the issued and outstanding shares of the Company.
Additionally, Munoz had periodically advanced funds to the Company, which is reflected as Loans Payable, Related Party (“Related Party Loan”) under Current Liabilities on the financial statements of the Company. The amounts due and owing by the Company to Munoz, as of December 31, 2022 was $291,231.
Additionally, as a result of a Sublease between the Company and Munoz, the financial statements reflect as Accounts Payable, Related Party (“Related Party Accounts Payable”) under Current Liabilities on the financial statements of the Company, such amounts due and owing by the Company which as of December 31, 2022 was $33,000.
The Amendment provided that the full amount of any Related Party Loan and Related Party Accounts Payable then owing as of the Closing of the transactions contemplated by the Purchase Agreement, were to be forgiven effective as of the Closing, in total amount of $340,233. This amount has been reflected as Gain on Forgiveness of Debt in the statement of operations for the year ended December 31, 2023.
Prior to the Closing, the sole officer and director of the Company, pursuant to Section 17-16-810(c) of the Wyoming Business Corporations Act, which provides that a vacancy that will occur at a later date, by reason of a resignation effective at a later date under W.S. 17-16-807(b) or otherwise, may be filled before the vacancy occurs, but the new director may not take office until the vacancy occurs, appointed Javier the Sole Director, and President, Secretary, and Chief Financial Officer.
The Closing under the Agreement, the Amendment, and the Escrow occurred on January 18, 2023. At Closing Munoz transferred the Control Shares to Javier, the sole officer and director of the Company resigned, simultaneously with Javier becoming the Sole Director, the President, the Secretary, and Chief Financial Officer. At Closing, the balance of $225,000 was paid by the Escrow Agent to Munoz.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
On October 3, 2023, by email communication, South East Asia Development, Corp. (the “Company”) was informed that Gries & Associates, LLC (“Gries”) was merging its firm with GreenGrowth CPAs (“GreenGrowth”). Gries continued to function as the Company’s auditor through the Company’s Q3-2023 Form 10-Q on November 21, 2023. Ultimately, there was no merger, and GreenGrowth simply acquired some of Gries’ clients, including the Company.
On February 6, 2024, the Company engaged and executed an agreement with GreenGrowth CPAs (“GreenGrowth”), as the Company’s new independent accountant to replace Gries.
The reports of Gries regarding the Company’s financial statements for the fiscal years ended December 31, 2022 and 2021, being the most recent fiscal years for which the Company has filed audited financial statements with the Securities and Exchange Commission (the “SEC”), did not contain any adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles, except to indicate that there was substantial doubt about the Company’s ability to continue as a going concern.
The board of directors of the Company, acting as the audit committee, approved the decision to change independent accountants.
During the fiscal years ended December 31, 2022 and 2021, and through February 6, 2024, the Company had no disagreements (as defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions to Item 304 of Regulation S-K) with Gries on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedures, which disagreements, if not resolved to the satisfaction of Gries would have caused Gries to make reference thereto in connection with its report.
During the fiscal years ended December 31, 2022 and 2021, and through February 6, 2024, the Company did not experience any reportable events (as defined in Item 304(a)(1)(v) of Regulation S-K), except that management of the Company discussed with Gries the continued existence of material weaknesses in the Company’s internal control over financial reporting.
The Company requested Gries to furnish it with a letter addressed to the SEC stating whether or not Gries agrees with the above statements and, if it does not agree, the respects in which it does not agree. A copy of the letter, dated April 5, 2024, is filed as Exhibit 16.1 to this current report on Form 10-K.
During the Company’s fiscal years ended December 31, 2022 and 2021, and through February 6, 2024, neither the Company nor anyone on the Company’s behalf consulted with Gries regarding any of the following:
(i) either the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Company’s financial statements, and neither a written report nor oral advice was provided to the Company that Gries concluded was an important factor considered by the Company in reaching a decision as to any accounting, auditing or financial reporting issue; or
(ii) any matter that was either the subject of a disagreement (as defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions to Item 304 of Regulation S-K) or a reportable event (as defined in Item 304(a)(1)(v) of Regulation S-K).
By letter dated April 1, 2024, the Company was informed by the Securities and Exchange Commission, Division of Corporate Finance, that the Public Company Accounting Oversight Board (“PCAOB”) has revoked the registration of the Company’s prior auditor, Gries & Associates, LLC effective March 5, 2024.
ITEM 9A. CONTROLS AND PROCEDURES
Management’s Report on Disclosure Controls and Procedures
We attempt to maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, to allow for timely decisions regarding required disclosure.
As of December 31, 2023, the end of our fiscal year covered by this report, we carried out an evaluation, under the supervision of our Chief Executive Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, we concluded that our disclosure controls and procedures were ineffective as of the end of the period covered by this annual report because there was no segregation of the duties with only a sole member in our management team and our board of directors does not have a formal audit committee.
Management’s Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act, as amended). In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of control procedures. The objectives of internal control include providing management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with management’s authorization and recorded properly to permit the preparation of financial statements in conformity with accounting principles generally accepted in the United States.
Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2023. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework.
Our management has concluded that, as of December 31, 2023, our internal control over financial reporting is ineffective in providing reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with US generally accepted accounting principles.
This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to the rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this annual report.
Inherent limitations on effectiveness of controls
Internal control over financial reporting has inherent limitations which include but is not limited to the use of independent professionals for advice and guidance, interpretation of existing and/or changing rules and principles, segregation of management duties, scale of organization, and personnel factors. Internal control over financial reporting is a process which involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures. Internal control over financial reporting also can be circumvented by collusion or improper management override. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements on a timely basis, however these inherent limitations are known features of the financial reporting process and it is possible to design into the process safeguards to reduce, though not eliminate, this risk. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.
Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Changes in Internal Control over Financial Reporting
There have been no changes in internal control over financial reporting that occurred during our fourth fiscal quarter of 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
ITEM 9B. OTHER INFORMATION
During the quarter ended December 31, 2023, no director or officer adopted or terminated any Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement, as each term is defined in Item 408(a) of Regulation S-K.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTION THAT PREVENT INSPECTIONS.
Not Applicable.
PART III.
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Identification of directors and executive officers
Prior to the Change of Control, our current sole director and executive officer of the Company in 2022 was as follows:
Name | | Age | | Title | Director Since |
| Thomas K. Emmitt | | 59 | | Director, President, CEO, CFO and Secretary | April 2021 |
After the Change of Control, our current sole director and executive officer of the Company in 2023 was as follows:
Name | | Age | | Title | Director Since |
| JJ C. Javier | | 43 | | Director, President, CEO, CFO and Secretary | January 18, 2023 |
All of the Company’s directors hold office until the next annual general meeting of the stockholders or until their successors are elected and qualified. The officers are appointed by our Board of Directors and hold office until their earlier death, retirement, resignation, or removal.
Significant Employees
There are no significant employees other than Mr. Javier.
Family Relationships
There are no family relationships between any directors or executive officers of the Company, either by blood or by marriage.
Business Experience
The business experience during the past five years of each of the persons presently listed above as an Officer or Director of the Company or a Significant Employee is as follows:
Thomas K. Emmitt was appointed as our Chief Executive Officer and a director in April 12, 2021. In addition to these roles, Mr. Emmitt is a former director and former Chief Executive Officer of Bakhu Holdings Corp. Mr. Emmitt is also the principal of the Law Office of Tom Emmitt, a law firm specializing in civil litigation. Mr. Emmitt has successfully prosecuted over 400 civil cases in the areas of personal injury and employment law. From March 2009 through January 2016, Mr. Emmitt was in-house counsel to Green Medica Holdings Corporation, a nutraceutical company specializing in mushroom derivatives and DHA/GPC products. Beginning in January 2016, and continuing through the present, Mr. Emmitt has been in-house counsel to the OZ Corporation, a management consulting company providing services to small and mid-cap companies. Finally, Mr. Emmitt has been the President of Belltower Entertainment Corp. (BTOW), a publicly traded entity since December 2017. Mr. Emmitt is a graduate of Ventura College, and the West Los Angeles School of Law.
JJ C. Javier, as part of the Change of Control was appointed the Sole Director, and President, Secretary, and Chief Financial Officer of the Company. In 2005, Mr. Javier Co-Founded WebPlus 7 Solutions Corp., a Philippine Software Development Company that builds applications across a variety of platforms & industries. Since July, 2015, Mr. Javier has served as Chief Executive Officer BreakRoad35 International Marketing Corporation, a Philippine company that produces and markets products using cutting-edge technology. In 2020 Mr. Javier Co-Founded Ayahtek Corp., a Philippines & Seattle Software Development Company that builds applications across a variety of platforms & industries. From 2019-present, Mr. Javier has served as Chairman / President Agriworld Corporation, whose business is Health & Wellness Product Manufacturing and Distribution. From 2020-present, Mr. Javier has been Chairman/President of Vient Realty, and Vient Land whose business is real estate and land development. From 2022 to present, Mr. Javier has been Chairman / President of Potami Water Enterprises PH, a water bottling & distribution company.
In 2021 Mr. Javier received an AB Political Science with Latin Honors, Cum Laude from the Arellano University, Legarda , Manila, Philippines.
Directorships
No Director of the Company or person nominated or chosen to become a Director holds any other directorship in any company with a class of securities registered pursuant to section 12 of the Exchange Act or subject to the requirements of section 15(d) of such Act or any other company registered as an investment company under the Investment Company Act of 1940.
Involvement in Certain Legal Proceedings
During the past ten years, no present or former director, executive officer or person nominated to become a director, or an executive officer of the Company has been or filed:
1. A petition under the Federal bankruptcy laws or any state insolvency law was filed by or against, or a receiver, fiscal agent or similar officer was appointed by a court for the business or property of such person, or any partnership in which he was a general partner at or within two years before the time of such filing, or any corporation or business association of which he was an executive officer at or within two years before the time of such filing;
2. Such person was convicted in a criminal proceeding or is a named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses);
3. Such person was the subject of any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from, or otherwise limiting, the following activities:
i. Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity;
ii. Engaging in any type of business practice; or
iii. Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of Federal or State securities laws or Federal commodities laws;
4. Such person was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described in paragraph (f)(3)(i) of this section, or to be associated with persons engaged in any such activity;
5. Such person was found by a court of competent jurisdiction in a civil action or by the Commission to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated;
6. Such person was found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated;
7. Such person was the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of:
i. Any Federal or State securities or commodities law or regulation; or
ii. Any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or
iii. Any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or
8. Such person was the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.
Promoters and Control Persons
None.
Section 16(a) Beneficial Ownership Reporting Compliance
The Company does not have a class of equity securities registered pursuant to Section 12 of the Exchange Act (15 U.S.C. 78l) and is not required to identify each person who was an officer, director or beneficial owner of more than 10% of our registered equity securities during our most recent fiscal year and who failed to file on a timely basis reports required by Section 16(a) of the Securities Exchange Act of 1934.
Code of Ethics
The Company expects that its Officers and Directors will maintain appropriate standards of honesty and ethical conduct in connection with the performance of their duties on behalf of the Company. In recognition of this expectation, the Company has adopted a Code of Ethics. The purpose of this Code of Ethics is to codify standards the Company believes are reasonably necessary to deter wrongdoing and to promote honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships and full, fair, accurate, timely and understandable disclosure in reports and documents that the Company files with, or submits to, the Securities and Exchange Commission (the “SEC”), or other regulatory bodies and in other public communications made by the Company.
Audit Committee and Audit Committee Financial Expert
We also do not have an “audit committee financial expert” as such term is described in Item 401 of Regulation S-K promulgated by the SEC.
ITEM 11. EXECUTIVE COMPENSATION
Summary Compensation Table
Summary Compensation Table
The following table summarizes the total compensation for the two fiscal years ended December 31, 2023 of each person who served as our principal executive officer or principal financial and accounting officer collectively, (the “Named Executive Officers”) including any other executive officer who received more than $100,000 in annual compensation from the Company. We did not award cash bonuses, stock options or non-equity incentive plan compensation to any Named Executive Officer during the two fiscal years ended December 31, 2023 and 2022; thus, these items are omitted from the table below:
Summary Compensation Table
| Name and Principal Position | | | Year Ended Dec. 31 | | | | Salary ($) | | | | Stock Awards(s) ($) | | | | Option Awards ($) | | | | Non-Equity Incentive Plan Compensation | | | | All Other Compensation ($) | | | | Total ($) | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Thomas K. Emmitt | | | 2023 | | | $ | – | | | $ | – | | | $ | – | | | | – | | | $ | – | | | $ | – | |
| CEO, President, | | | 2022 | | | $ | – | | | $ | – | | | $ | – | | | | – | | | $ | – | | | $ | – | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| JJ C. Javier | | | 2023 | | | $ | – | | | $ | – | | | $ | – | | | | – | | | $ | – | | | $ | – | |
| CEO, President, | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Compensation of Directors
Each director may be reimbursed for certain expenses incurred in attending board of directors and committee meetings.
There are no employment contracts, compensatory plans or arrangements, including payments to be received from the Company with respect to any Director that would result in payments to such person because of his or her resignation with the Company, or its subsidiaries, any change in control of the Company. There are no agreements or understandings for any Director to resign at the request of another person. None of our Directors or executive officers’ acts or will act on behalf of or at the direction of any other person.
Outstanding Equity Awards at Fiscal Year-End
There are no outstanding equity awards to our Named Executive Officers or directors as of December 31, 2023.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
We have determined beneficial ownership as shown in the following two tables in accordance with the rules of the SEC. Except as indicated by the footnotes below, we believe, based on the information furnished to us, that the persons and entities named in the two tables below have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them, subject to applicable community property laws. Applicable percentage ownership as shown in the two tables below is based on 36,603,800 shares of common stock outstanding on December 31, 2023. In computing the number of shares of common stock beneficially owned by a person and the percentage ownership of that person, we deemed as outstanding shares of common stock subject to options held by that person that are currently exercisable or exercisable within 60 days of December 31, 2023. However, we did not deem these shares outstanding for the purpose of computing the percentage ownership of any other person.
Security Ownership of Certain Beneficial Owners
Prior to the Change of Control, the following table shows the amount of common stock beneficially owned by holders of more than 5% of the outstanding shares of any class of our voting securities.
| Title of Class | | | Name and Address of Beneficial Owner | | | Amount and Nature of Beneficial Owner | | Percent of Class |
| Common Stock | | | John R. Munoz(1) One World Trade Center Suite 130 Long Beach, CA 90831 | | | 25,943,800 | | 70.87% |
| | | | | | | | | |
| Common Stock | | | OZS Management Consultancy Services 310 San Miguel Magalang Pampanga, Philippines 2011 | | | 4,950,000 | | 13.52% |
| | | | | | | | | |
| Common Stock | | | Lady Jho Pineda Dimitui 310 San Miguel Magalang Pampanga, Philippines 2011 | | | 4,950,000 | | 13.52% |
(1) Includes 25,025,000 shares of common stock owned directly 918,800 shares of common stock owned directly through OZ Corporation of which Mr. Munoz is the sole owner, officer and director.
After the Change of Control, the following table shows the amount of common stock beneficially owned by holders of more than 5% of the outstanding shares of any class of our voting securities.
| Title of Class | | | Name and Address of Beneficial Owner | | | Amount and Nature of Beneficial Owner | | Percent of Class |
| Common Stock | | | JJ C. Javier Unit 2102, One Global Place 5th Avenue Corner 25th Street BCG, Taguig City 1630 Philippines | | | 25,943,800 | | 70.87% |
| | | | | | | | | |
| Common Stock | | | OZS Management Consultancy Services 310 San Miguel Magalang Pampanga, Philippines 2011 | | | 4,950,000 | | 13.52% |
| | | | | | | | | |
| Common Stock | | | Lady Jho Pineda Dimitui 310 San Miguel Magalang Pampanga, Philippines 2011 | | | 4,950,000 | | 13.52% |
Security Ownership of Management
The following table sets forth the amount and nature of beneficial ownership of any class of our voting securities held by all of the Company’s current directors and executive officers.
| Title of Class | | | Name and Address of Beneficial Owner | | | Amount and Nature of Beneficial Owner | | Percent of Class |
| Common Stock | | | JJ C. Javier Unit 2102, One Global Place 5th Avenue Corner 25th Street BCG, Taguig City 1630 Philippines | | | 25,943,800 | | 70.87% |
| | | | | | | | | |
| Common Stock | | | Directors and Executive Officers as a Group
(1 Person) | | | 25,943,800 | | 70.87% |
Change of Control
IA Energy Corp., (“Company” or “IA Energy”), John R. Munoz (“Seller” or “Munoz”), and JJ C. Javier (“Purchaser” or “Javier”) entered into a Stock Purchase Agreement (“Agreement”) on November 14, 2022 wherein and whereby, the Purchaser was to acquire 25,025,000 Shares of Common Stock of the Company from the Seller. The Company, Munoz, and Javier will be collectively referred to as, the “Parties.”
The Agreement was entered into effective as of the date of the last signature (“Effective Date”), which was November 14, 2022.
The Company is authorized to issue 500,000,000 shares of common stock, par value $0.0001 (USD) per share, of which 36,603,800 shares are issued and outstanding, and 20,000,000 shares of preferred stock, par value $0.0001(USD) per share, of which no preferred shares have been issued.
The Seller indicated that he was the beneficial and owners of record of 25,025,000 Shares of Common Stock (“Control Shares”) of the Company. The Control Shares to be sold under the Agreement represented 68.37 % of the total shares issued and outstanding (“Change of Control”). The purchase price (“Purchase Price”) for the Control Shares was Three Hundred Thousand Dollars ($300,000) (USD).
At the time of execution of the Agreement, the Company was a non-trading, reporting company and was delinquent in the filing of the following periodic reports (the “Delinquent SEC Reports”) with the Securities and Exchange Commission (the “SEC”):
| | (i) | Quarterly Report on Form 10-Q for the quarter ended 9/30/2021; |
| | (ii) | Annual Report on Form 10-K for the year ended 12/31/2021; |
| | (iii) | Quarterly Report on Form 10-Q for the quarter ended 3/31/2022; |
| | (iv) | Quarterly Report on Form 10-Q for the quarter ended 6/30/2022; and |
| | (v) | Quarterly Report on Form 10-Q for the quarter ended 9/30/2022. |
The Company was also, not in good standing in the state of Wyoming.
To facilitate (i) the required audit and or review of the requisite financial statements by a qualified PCAOB Auditor for Company to complete and file the Delinquent SEC Reports, (ii) bringing the Company into good standing in the State of Wyoming, and (iii) to close the purchase, sale, and delivery of the Control Shares, contemporaneous with entering into the Agreement, the Parties entered into an Escrow Agreement ("Escrow Agreement") with Chachas Law Group P.C., the Company’s Counsel, as escrow agent ("Escrow Agent").
The Agreement and the Escrow Agreement provided that (i) Purchaser would deliver to and deposit with Escrow Agent the Purchase Price of $300,000 (USD) to be held in the Chachas Law Group Attorney Trust Account; (ii) the Purchaser authorized a non-refundable disbursement (“Non-Refundable Payment ) of the $75,000 (USD) to the Company; (iii) the Company was to use the Non-Refundable Payment to pay its counsel, Chachas Law Group P.C., to complete the requisite audits and other task as required to facilitate the filing of the Delinquent SEC Reports and to bring the Company into good standing in the State of Wyoming; (iv) the Company and Seller, upon Closing would appoint the Purchaser as the Company’s sole Director and to all Officer positions; and (iv) Seller would deliver to the Escrow Agent the resignations of the current officers and directors of the Company (the “Resignations”), original certificates or an account statement if held in Book Entry, representing the Control Shares (the “Certificate”), duly executed irrevocable stock powers endorsed in blank with the signature medallion guaranteed (the “Stock Powers”) for the transfer of the Control Shares to be held and delivered in accordance with the terms of this Agreement and the Escrow Agreement.
Upon execution of this Agreement, and the Escrow Agreement on November 14, 2022, the Purchaser caused to have delivered to Chachas Law Group Attorney Trust Account, one or more bank wires in total amount of $300,000 (USD) and, in its capacity as the Escrow Agent, Chachas Law Group P.C, released $75,000 (USD)of the Escrowed Funds from the Chachas Law Group Attorney Trust Account for the purpose of completing the requisite audits and other tasks as required to facilitate the filing of the Delinquent SEC Reports and to bringing the Company into good standing in the State of Wyoming.
Thereafter, the Company was brought into good standing with the State of Wyoming on November 29, 2022. Delinquent SEC Reports were filed with the Securities and Exchange Commission (“SEC”) as follows:
| January 3, 2023: | Quarterly Report on Form 10-Q for the quarter ended 9/30/2021 |
| January 5, 2023: | Annual Report on Form 10-K for the year ended 12/31/2021 |
| January 10, 2023: | Quarterly Report on Form 10-Q for the quarter ended 3/31/2022 |
| January 11, 2023: | Quarterly Report on Form 10-Q for the quarter ended 6/30/2022 |
| January 13, 2023: | Quarterly Report on Form 10-Q for the quarter ended 9/30/2022. |
The sale and purchase of the Control Shares was to close (“Closing”) within seven (7) days of the date that the Company filed the Delinquent SEC Reports and had become in good standing in the State of Wyoming, but not later than forty-five (45) days following the Effective Date of the Agreement, through the offices of the Escrow Agent unless extended by mutual written agreement of the parties.
On January 18, 2023, the Parties entered into the First Amendment to Stock Purchase Agreement (“Amendment”).
The Amendment provided that the Purchaser was to purchase all 25,943,800 shares of Common Stock (the “Control Shares”) owned by Munoz for the aggregate purchase price of $300,000 (USD), which was an additional 918,800 shares of common stock. The Control Shares sold pursuant to the Agreement and the Amendment represents 70.877% of the issued and outstanding shares of the Company.
Additionally, Munoz had periodically advanced funds to the Company, which is reflected as Loans Payable, Related Party (“Related Party Loan”) under Current Liabilities on the financial statements of the Company. The amounts due and owing by the Company to Munoz, as of December 31, 2021 was $253,300 (USD).
Additionally, as a result of a Sublease between the Company and Munoz, the financial statements reflect as Accounts Payable, Related Party (“Related Party Accounts Payable”) under Current Liabilities on the financial statements of the Company, such amounts due and owing by the Company which as of December 31, 2021 was $27,000 (USD).
The Amendment provided that the full amount of any Related Party Loan and Related Party Accounts Receivable then owing as of the Closing of the transactions contemplated by the Purchase Agreement, were to be forgiven effective as of the Closing, in total amount of $280,300 (USD).
Prior to the Closing, the sole officer and director of the Company, pursuant to Section 17-16-810(c) of the Wyoming Business Corporations Act, which provides that a vacancy that will occur at a later date, by reason of a resignation effective at a later date under W.S. 17-16-807(b) or otherwise, may be filled before the vacancy occurs, but the new director may not take office until the vacancy occurs, appointed Javier the Sole Director, and President, Secretary, and Chief Financial Officer.
The Closing under the Agreement, the Amendment, and the Escrow occurred on January 18, 2023. At Closing Munoz transferred the Control Shares to Javier, the sole officer and director of the Company resigned, simultaneously with Javier becoming the Sole Director, the President, the Secretary, and Chief Financial Officer. At Closing, the balance of $225.000 (USD)was paid by the Escrow Agent to Munoz.
The transaction transferring control from Munoz to JJ C. Javier closed on January 18, 2023 and as described in detail above in Item 5.01, JJ C. Javier purchased all 25,943,800 shares of Common Stock (the “Control Shares”) owned by Munoz for the aggregate purchase price of $300,000 (USD). The Control Shares sold pursuant to the Agreement and the Amendment represents 70.877% of the issued and outstanding shares of the Company, with JJ C. Javier acquiring the controlling interest in the 36,603,800, issued and outstanding shares, of the Company (“Change of Control”).
In Summary:
Control was acquired by JJ C. Javier, whose address is, Unit 2102, One Global Place, 5th Avenue Corner 25th Street, BGC, Taguig City 1630 Philippines and whose telephone number is +63 (2) 79433419.
The transaction transferring control from Munoz to JJ C. Javier closed on January 18, 2023.
JJ C. Javier purchased all 25,943,800 shares of Common Stock (the “Control Shares”) owned by Munoz for the aggregate purchase price of $300,000. The Control Shares sold pursuant to the Agreement and the Amendment represents 70.877% of the issued and outstanding shares of the Company, with JJ C. Javier acquiring the controlling interest in the 36,603,800 issued and outstanding shares of the Company (“Change of Control”).
JJ C. Javier paid $300,000 (USD) for the Control Shares.
The source of the $300,000 (USD) paid by JJ C. Javier for the Control Shares was his personal funds. The transaction did not involve bank loans or investors funding.
Other than the Agreement, the Amendment, and the Escrow Agreement, there were no written or oral arrangements or understandings among member of both the former and new control groups and their associates with respect to election of directors or other matters. There are no arrangements known to the registrant, including any pledge by any person of securities of the registrant or any of its parents, the operation of which may at a subsequent date result in a change in control of the registrant.
Securities Authorized for Issuance Under Equity Compensation Plans
We have no equity compensation plans, previously approved or not by stockholders.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Certain Relationships and Related Transactions
Prior to the Change of Control, we occupied office space in accordance with a sublease from The OZ Corporation. The beneficial stockholder of The OZ Corporation is John R. Munoz, who, prior to the Change of Control, was the controlling stockholder of the Company. No rent had been paid and rent but was accruing at the rate of $500 per month beginning November 1, 2019.
After the Change of Control, we occupied office space in accordance with an oral agreement with JJ Javier. No rent has been paid and there is no agreement for the payment of rent.
Review, Approval or Ratification of Transactions with Related Persons
Not Applicable.
Promoters and Certain Control Persons
There have been no material transactions, series of similar transactions, currently proposed transactions, or series of similar transactions, to which the Company is to be a party, in which any promoter or founder, or any member of the immediate family of any of the foregoing persons, had a material interest.
Director Independence
Our Board of Directors has not established Audit, Compensation, and Nominating or Governance Committees as standing committees. The Board does not have an executive committee or any committees performing a similar function. We are not currently listed on a national securities exchange or in an inter-dealer quotation system that has requirements that a majority of the board of directors be independent. Our director and sole officer, Thomas Emmett is not “independent” under the definition set forth in the listing standards of the NASDAQ Stock Market, Inc., which is the definition that the Board has chosen to use for the purposes of determining independence, as the OTC Markets does not provide such a definition.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
The following table sets forth fees invoiced by our independent registered accounting firm Gries & Associates, LLC for the fiscal year ended December 31, 2023 and 2022.
| | | 2023 | | | 2022 | |
| Audit Fees | | $ | 19,000 | | | $ | 22,000 | |
| Audit Related Fees | | | -0- | | | | -0- | |
| Tax Fees | | | -0- | | | | -0- | |
| All Other Fees | | | -0- | | | | -0- | |
| Total Fees | | $ | 19,000 | | | $ | 22,000 | |
It is the policy of the Board of Directors, which presently completes the functions of the Audit Committee, to engage the independent accountants selected to conduct our financial audit and to confirm, prior to such engagement, that such independent accountants are independent of the company. All services of the independent registered accounting firms reflected above were pre-approved by the Board of Directors.
Audit Fees
During the fiscal year ended December 31, 2023, we incurred $19,000 in fees to our principal independent accountants for professional services rendered in connection with the audit and reviews of our financial statements for fiscal year ended December 31, 2023.
During the fiscal year ended December 31, 2022, we incurred $22,000 in fees to our principal independent accountants for professional services rendered in connection with the audit and reviews of our financial statements for fiscal year ended December 31, 2022.
Audit-Related Fees
The aggregate fees billed during the fiscal years ended December 31, 2023 and 2022 for assurance and related services by our principal independent accountants that are reasonably related to the performance of the audit or review of our financial statements was $-0- and $-0-, respectively.
Tax Fees
The aggregate fees billed during the fiscal years ended December 31, 2023 and 2022 for professional services rendered by our principal accountant for tax compliance, tax advice and tax planning was $-0- and $-0-, respectively.
All Other Fees
The aggregate fees billed during the fiscal years ended December 31, 2023 and 2023 for products and services provided by our principal independent accountants (other than the services reported above) was $-0- and $-0-, respectively.
PART IV.
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
1. Financial Statements. The following financial statements are filed as part of this report:
| | Page |
| Audited Financial Statements for the Years Ended December 31, 2023 and 2022: | |
| Report of Independent Registered Public Accounting Firm | 20 |
| Balance Sheets as of December 31, 2023 and 2022 | 21 |
| Statements of Operations for the Years Ended December 31, 2023 and 2022 | 22 |
| Statements of Stockholders’ Equity (Deficit) for the Years Ended December 31, 2023 and 2022 | 23 |
| Statements of Cash Flows for the Years Ended December 31, 2023 and 2022 | 24 |
| Notes to the Financial Statements | 25 |
3. Exhibits. The following exhibits are either filed as a part hereof or are incorporated by reference. Exhibit numbers correspond to the numbering system in Item 601 of Regulation S-K.
_________________
1 Previously filed on Form S-1 on September 29, 2017
2 Filed herewith
3 Filed on May 10, 2023
| * | All exhibits are numbered with the number preceding the decimal indicating the applicable SEC reference number in Item 601 and the number following the decimal indicating the sequence of the particular document. |
| ** | Users of this data are advised that, pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or Annual Report for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Exchange Act of 1934 and otherwise are not subject to liability. |
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Dated: May 31, 2024 | /s/ JJ C. Javier |
| | By: JJ C. Javier |
| | Its: Chief Executive Officer and Principal Accounting Officer |
| | |
| | |
| | |
| Dated: May 31, 2024 | /s/ JJ C. Javier |
| | By: J C. Javier, Director |
