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EX-32.1 - First Surgical Partners Inc.arkson10kexh312.txt
EX-31.1 - First Surgical Partners Inc.arkson10kexh311.txt

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

                            -------------------------

                                  FORM 10-K/A
                                Amendment No. 2

                            ------------------------

 (Mark One)
[ X ]   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
        ACT OF 1934
                                         For the fiscal year ended JUNE 30, 2009

[   ]   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
                                 For the transition period from _____ to _______

                       Commission file number: 333-103780
                       ----------------------------------

                          ARKSON NEUTRACEUTICALS CORP.
--------------------------------------------------------------------------------
              (Exact name of small business issuer in its charter)

              Delaware                                        51-0383940
   -------------------------------                        --------------------
   (State or other jurisdiction of                          (I.R.S. Employer
    incorporation or organization)                         Identification No.)

               27 Chicora Ave                                    M5R 1T7
            Toronto Ontario, Canada
    ----------------------------------------                    ----------
    (Address of principal executive offices)                    (Zip Code)

                    Issuer's telephone number: (416) 928-3095

       Securities Registered Under Section 12(b) of the Exchange Act: None

         Securities Registered Under Section 12(g) of the Exchange Act:
                         Common Stock, $0.001 par value
                         ------------------------------
                                (Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer as
defined in Rule 405 of the Securities Act. Yes       No |X|

Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act. Yes       No |X|

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes |X|    No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.

Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

    Large accelerated filer                       Accelerated filer

    Non-accelerated  (Do not check if a smaller   Smaller reporting company |X|
    reporting company)filer

Indicate by check mark whether the registrant is a shell company (as defined by
Rule 12b-2 of the Act). Yes |X|    No

The Company's stock is traded on the OTC-BB. As of June 30, 2009, there were
152,889 shares of stock held by non-affiliates. As of June 30, 2009, 645,889
shares of the common stock of the registrant were outstanding.

            CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K includes forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. The Registrant has based
these forward-looking statements on its current expectations and projections
about future events. These forward-looking statements are subject to known and
unknown risks, uncertainties and assumptions about the Registrant that may cause
its actual results, levels of activity, performance or achievements to be
materially different from any future results, levels of activity, performance or
achievements expressed or implied by such forward-looking statements. In some
cases, you can identify forward-looking statements by terminology such as "may,"
"will," "should," "could," "would," "expect," "plan," "anticipate," "believe,"
"estimate," "continue," or the negative of such terms or other similar
expressions. Factors that might cause or contribute to such a discrepancy
include, but are not limited to, those described in this Annual Report on Form
10-K and in the Registrant's other Securities and Exchange Commission filings.



                                        1

PART I ITEM 1. DESCRIPTION OF BUSINESS INTRODUCTION Arkson Nutraceuticals, Inc. (herein referred to as "we," "our," "us," the "Company," or the "Registrant") was incorporated on October 2, 1998 under the laws of the State of Delaware. The Company intended to engage in the manufacture and sale of a broad range of proprietary natural health food supplement products. The Company began to negotiate licenses with developers of natural health food supplements approximately one month after incorporation. The Company also entered negotiations with various wholesale buyers of such products and with finance organizations. These explorations and negotiations continued at a high level for a period of approximately two years after incorporation, and at a slower pace for one additional year. However, no such licenses or contracts materialized. As a result of the Company's failure to generate licenses, contracts, or sales it operated at a loss. By June 2001 virtually all funds raised by the sale of shares had been expended, and the Company thereafter became dormant. From July 1, 2001 until the present, it was inactive and could be deemed to be a so-called "shell" company, an entity which is generally described as having no or nominal operations and with no or nominal assets or assets consisting solely of cash and cash equivalents. The Company has been seeking, and will continue to seek, potential operating businesses and business opportunities with the intent to acquire or merge with such businesses. Its principal purpose is to locate and consummate a merger or acquisition with a private entity. Because of the Company's current status of having only nominal assets and no recent operating history, in the event the Company does successfully acquire or merge with an operating business opportunity, it is likely that the Company's current shareholders will experience substantial dilution and a resultant change in control of the Company. Any target acquisition or merger candidate of the Company will become subject to the same reporting requirements as the Company upon consummation of any merger or acquisition. Thus, in the event the Company successfully completes the acquisition of, or merger with, an operating business opportunity, that business opportunity must provide Form 10 level disclosure in a Form 8-K including audited financial statements for at least the two most recent fiscal years or, in the event the business opportunity has been in business for less than two years, audited financial statements will be required from the period of inception. This could limit the Company's potential target business opportunities due to the fact that many private business opportunities either do not have audited financial statements or are unable to produce audited statements without substantial time and expense. The Company has no recent operating history and no representation is made, nor is any intended, that the Company will in fact be able to carry on future business activities successfully. If the Company needs cash over the ensuing 12 months in order to carry out its business activities, the Company believes that it will be able to borrow sufficient cash from its stockholders in order to satisfy any such immediate requirements. For this reason, the Company does not presently anticipate having to raise any additional funds within the next 12 months or longer. In spite of being able to meet cash needs that are currently anticipated, there can be no assurance that the Company will have the ability to acquire or merge with an operating business, business opportunity or property at all, let alone one that will be of material value or benefit to the Company. There can also be no assurance that the Company's cash needs can be indefinitely met by cash advances from a stockholder or anyone else associated with the Company. As stated elsewhere herein, management plans to investigate, research and, if justified, potentially acquire or merge with one or more businesses or business opportunities. Management will have broad discretion in its search for and negotiations with any potential business or business opportunity. Use of Form S-8 and Form 8-K by Shell Companies Effective August 22, 2005, the Commission adopted a series of rules and rule amendments designed to deter fraud and abuse through the use of reporting shell companies. The most significant rule changes were as follows: (i) shell companies are prohibited from using Form S-8 to register offerings of securities during the period a company is defined as a shell company and for 60 days thereafter; and (ii) upon completion of a transaction whereby a company ceases to be a shell company, the company must file Form 10 level disclosure in a Form 8-K within four business days after completing the transaction. The changes to the Form 8-K rules may limit the number of business opportunities that would be interested in completing a transaction with the Company. 2
Sources of Business Opportunities and Risks Associated Therewith Management of the Company intends to use various resources in the search for potential business opportunities including, but not limited to, the Company's officer and director, consultants, special advisors, securities broker-dealers, venture capitalists, members of the financial community and others who may present management with unsolicited proposals. Because of the Company's lack of capital, it may not be able to retain on a fee basis professional firms specializing in business acquisitions and reorganizations. Rather, the Company will most likely have to rely on outside sources, not otherwise associated with the Company, persons that will accept their compensation only after the Company has finalized a successful acquisition or merger. If the Company elects to engage an independent consultant, it intends to look only to consultants that have experience in working with small public companies in search of an appropriate business opportunity. Also, the consultant will more than likely have experience in locating viable merger and/or acquisition candidates and have a proven track record of finalizing such business combinations. Further, the Company would prefer to engage a consultant that will provide services for only nominal up-front consideration and who would be willing to be fully compensated at the close of a business combination or acquisition. The Company does not intend to limit its search to any specific kind of industry or business. The Company may investigate and ultimately acquire a venture that is in its preliminary or development stage, is already in operation, or in various stages of existence and development. A potential venture might need additional capital or merely desire to have its shares publicly traded. Management believes that the Company could provide a potential public vehicle for a private entity interested in becoming a publicly held corporation. Evaluation and Risks Associated Therewith Once the Company has identified a particular entity as a potential acquisition or merger candidate, management will seek to determine whether acquisition or merger is warranted or whether further investigation is necessary. Such determination will generally be based on management's knowledge and experience, or with the assistance of outside advisors and consultants evaluating the preliminary information available to them. As stated in the previous section, management may elect to engage outside independent consultants to perform preliminary analysis of potential business opportunities. However, because of the Company's lack of capital it may not have the necessary funds for a complete an exhaustive investigation of any particular opportunity. In evaluating such potential business opportunities, the Company will consider, to the extent relevant to the specific opportunity, several factors including potential benefits to the Company and its shareholders; working capital, financial requirements and availability of additional financing; history of operation, if any; nature of present and expected competition; quality and experience of management; need for further research, development or exploration; potential for growth and expansion; potential for profits; and other factors deemed relevant to the specific opportunity. No assurance can be made following consummation of any acquisition or merger that the business venture acquired or targeted will develop into a going concern or, if the business is already operating, that it will continue to operate successfully. Many of the potential business opportunities made available to the Company may involve, among other things, new and untested products, processes or market strategies which may not ultimately prove successful. Form of Potential Acquisition or Merger and Risks Associated Therewith The particular manner in which the Company participates in a specific business opportunity will depend upon the nature of that opportunity, the respective needs and desires of the Company, on the one hand, and the respective needs and desires of those in control of the opportunity, on the other, and, the relative negotiating strength of the parties involved. Actual participation in a business venture may take the form of an asset purchase, lease, joint venture, license, partnership, stock purchase, reorganization, merger or consolidation. The Company may act directly or indirectly through an interest in a partnership, corporation, or other form of organization. Whatever form any business transaction ultimately takes, the Company does not intend to participate in opportunities through the purchase of minority stock positions. 3
Because of the Company's current situation, having only nominal assets and no recent operating history, in the event the Company does successfully acquire or merge with an operating business opportunity, it is likely that the Company's present shareholders will experience substantial dilution and there will be a probable change in control of the Company. Most likely, the owners of the business opportunity will acquire control of the Company following such transaction. Management has not established any guidelines as to the amount of control it will offer to prospective business opportunities, rather management will attempt to negotiate the best possible agreement for the benefit of the Company's shareholders. Need for Additional Capital or Financing and Risks Associated Therewith Management does not presently intend to borrow funds to compensate any persons, consultants, promoters or affiliates in relation to the consummation of a potential merger or acquisition. However, if the Company engages outside advisors or consultants in its search for business opportunities, it may be necessary for the Company to attempt to raise additional funds. As of the date hereof, the Company has not made any arrangements or definitive agreements to use outside advisors or consultants or to raise any capital. In the event the Company does need to raise capital, most likely the only method available to the Company would be the private sale of its securities. These possible private sales would more than likely have to be to persons known by the director or other shareholders of the Company or to venture capitalists that would be willing to accept the substantial risks associated with investing in a company with limited history, no current operations and nominal capital. It is unlikely that the Company could make a public offering of securities or be able to borrow any significant sum from either a commercial or private lender. Management will attempt to acquire funds or financing, if necessary, on the best available terms. However, there can be no assurance that the Company will be able to obtain additional funding or financing when and if needed, or that such funding, if available, can be obtained on terms reasonable or acceptable to the Company. Although not presently anticipated, a possibility exists that the Company would offer and sell additional securities to its existing shareholders or their affiliates or possibly even "accredited investors." Possible Sales of Shares by Certain Shareholders or Insiders In the case of a future acquisition or merger, there exists a possibility that a condition of such transaction might include the sale of shares presently held by officers, directors, their affiliates, if any, or other insiders of the Company to parties affiliated with or designated by the potential business opportunity. If any such situation does arise, management is obligated to follow the Company's Certificate of Incorporation and all applicable corporate laws in negotiating such an arrangement. Under this scenario of a possible sale by officers, directors and other insiders, if any, of their shares, it is unlikely that similar terms and conditions would be offered to all other shareholders of the Company or that the shareholders would be given the opportunity to approve such a transaction. Finder's, Agent's or Broker's Fees In the event of a successful acquisition or merger, a finder's, agent's or broker's fee, in the form of cash or securities, may be paid to persons instrumental in facilitating the transaction. The Company has not established any criteria or limits for the determination of any such fee, although it is likely that an appropriate fee will be based upon negotiations by and among the Company, the appropriate business opportunity, and the finder or broker. Though possible, it is unlikely that a finder's or agent's fee will be paid to an affiliate of the Company because of the potential conflict of interest that might result. If such a fee were paid to an affiliate, it would have to be in such a manner so as not to compromise an affiliate's possible fiduciary duty to the Company or to violate the doctrine of usurpation of a corporate opportunity. Further, in the unlikely event that a finder's or agent's fee was paid to an affiliate, the Company would likely, though not necessarily, have such an arrangement ratified by the shareholders in an appropriate manner. It should also be noted that finder's, agent's or broker's fees in the types of situations involved here are frequently substantial and no assurance can be made that any such fee would not be substantial or not entail the issuance of several million common capital shares. 4
Potential Conflicts of Interest Presently, it is believed to be highly unlikely that the Company will acquire or merge with a business opportunity in which the Company's management, affiliates or promoters, if any, have an ownership interest. Any possible related party transaction of this type would likely have to be ratified by a disinterested Board of Directors and possibly, by the shareholders. Whatever would happen, the Company intends do whatever it believes is necessary to fully and completely comply with Delaware corporate law. Management does not anticipate that the Company will acquire or merge with any related entity or person. Rights and Participation of Shareholders It is presently anticipated by management that prior to consummating a possible acquisition or merger, the Company, if required by relevant state laws and regulations, will seek to have the transaction ratified by shareholders in the appropriate manner. The Board of Directors will have the discretion to consummate an acquisition or merger by written consent if it is determined to be in the best interests of the Company to do so. Regardless of whether an action to acquire or merge is ratified by calling and holding a formal shareholders' meeting or by written consent, the Company intends to provide its shareholders with complete disclosure documentation concerning a potential target business opportunity, including appropriate audited financial statements of the target to the extent the same can be made available at the time. It is anticipated that all of such information will be disseminated to the shareholders either by a proxy statement prepared in accordance with Schedule 14A promulgated under the Exchange Act in the event that a shareholders' meeting is called and held, or by subsequent information statement prepared in accordance with Schedule 14C promulgated under the Exchange Act in the event the corporate action is approved by the written consent of a majority. Within four business days after completing a merger or acquisition transaction where the Company ceases to be a shell company, the Company must file a Form 8-K that provides Form 10 level disclosure. Competition The Company is unable to evaluate the type and extent of its likely competition. The Company is aware that there are several other public companies with only nominal assets that are also searching for operating businesses and other business opportunities as potential acquisition or merger candidates. The Company will be in direct competition with these other public companies in its search for business opportunities and, due to the Company's current lack of funds and capital resources, it may be difficult to successfully compete with these other companies. Employees As of the date hereof, the Company does not have any full time employees and has no plans for retaining full time employees until such time as the Company's business warrants the expense, or until the Company successfully acquires or merges with an operating business. The Company may find it necessary to periodically hire part-time clerical help on an as-needed basis. 5
Facilities The Company is currently using as its principal place of business the business office of its principal shareholder, David Roff, located in Toronto, Ontario. Although the Company has no written agreement and pays no rent for the use of this facility, it is contemplated that at such future time as the Company acquires or merges with an operating business, the Company will secure commercial office space from which it will conduct its business. However, until such time as the Company completes an acquisition or merger, the type of business in which the Company will be engaged and the type of office and other facilities that will be required is unknown. The Company has no current plans to secure such commercial office space. Industry Segments No information is presented regarding industry segments. The Company is presently seeking a potential acquisition of or merger with a yet known and yet-to-be-identified business opportunity. ITEM 2. DESCRIPTION OF PROPERTIES Administrative operations are conducted from the offices of David Roff, President, at 27 Chicora Ave, Toronto, Ontario, M5R 1T7. We expect to operate for as long as possible from these offices to minimize operating expenses. We do not currently pay rent for these offices and do not anticipate paying rent to Mr. Roff for any such offices in the future. Our operations do not currently require office to meet our objectives, and therefore administration from these offices is sufficient. At some point in the future, as may be necessary to implement and carry out our plans, we may require additional office space requiring rental expense, but we do not anticipate any such need during the next six to twelve months. We will however, incur common office operating expenses such as telephone, office supplies, postage, etc. ITEM 3. LEGAL PROCEEDINGS We know of no material, active or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS None PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTER (a) Market Price Information The Registrant's common stock is quoted from time to time on the OTC-BB under the symbol AKSN. As of July 15, 2009, there were approximately 200 registered holders of record of the Company's Common Stock (this excludes shareholders whose stock is held by a nominee or in "street name," because a nominee or street name holder is counted as one registered shareholder even if a nominee is holding stock for many shareholders). The Company believes that it has approximately 200 shareholders when including those whose shares are held in street name. On June 30, 2009, there were 645,889 shares outstanding. We have not declared any dividends since incorporation and do not anticipate that we will do so in the foreseeable future. Although there are no restrictions that limit the ability to pay dividends on our common shares, our intention is to retain future earnings for use in our operations and the expansion of our business. 6
High Low ---- --- YEAR ENDED JUNE 30, 2009 Quarter ended June 30, $3.00 $3.00 Quarter ended March 31, 3.00 3.00 Quarter ended December 31, 3.00 0.30 Quarter ended September 30, 0.30 0.30 YEAR ENDED JUNE 30, 2008 Quarter ended June 30, $0.15 $0.001 Quarter ended March 31, 0.15 0.001 Quarter ended December 31, 2.00 0.001 Quarter ended September 30, 0.15 0.001 Recent Sales of Unregistered Securities The company issued 100,000 common shares in the fourth quarter to Robert Audon for services provided. Equity Compensation Plans We have no equity compensation plans at June 30, 2009. ITEM 6. SELECTED FINANCIAL DATA Not required for small business. ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND PLAN OF OPERATION THE FOLLOWING ANALYSIS OF THE RESULTS OF OPERATIONS AND FINANCIAL CONDITION OF THE COMPANY FOR THE YEAR ENDED JUNE 30, 2009 SHOULD BE READ IN CONJUNCTION WITH THE COMPANY'S FINANCIAL STATEMENTS, INCLUDING THE NOTES THERETO CONTAINED ELSEWHERE IN THIS FORM 10-K OVERVIEW Arkson Neutraceuticals was incorporated on October 2, 1998 under the laws of the State of Delaware. The Company intended to engage in the manufacture and sale of a broad range of proprietary natural health food supplement products. By June 2001 virtually all funds raised by the sale of shares had been expended, and the Company thereafter became dormant. The Company is now considered a "shell company" as it has no or nominal operations. The Company has been seeking, and will continue to seek, potential operating businesses and business opportunities with the intent to acquire or merge with such businesses. The Company principal purpose is to locate and consummate a merger or acquisition with a private entity. Because of the Company's current status of having only nominal assets in the event the Company does successfully acquire or merge with an operating business opportunity, it is likely that the Company's current shareholders will experience substantial dilution and a resultant change in control of the Company. Any target acquisition or merger candidate of the Company will become subject to the same reporting requirements as the Company upon consummation of any merger or acquisition. Thus, in the event the Company successfully completes the acquisition of, or merger with, an operating business opportunity, that business opportunity must provide Form 10 level disclosure in a Form 8-K including audited financial statements for at least the two most recent fiscal years or, in the event the business opportunity has been in business for less than two years, audited financial statements will be required from the period of inception. This could limit the Company's potential target business opportunities due to the fact that many private business opportunities either do not have audited financial statements or are unable to produce audited statements without substantial time and expense. 7
The Company has no recent operating history and no representation is made, nor is any intended, that the Company will in fact be able to carry on future business activities successfully. If the Company needs cash over the ensuing 12 months in order to carry out its business activities, the Company believes that it will be able to borrow sufficient cash from its stockholders in order to satisfy any such immediate requirements. For this reason, the Company does not presently anticipate having to raise any additional funds within the next 12 months or longer. In spite of being able to meet cash needs that are currently anticipated, there can be no assurance that the Company will have the ability to acquire or merge with an operating business, business opportunity or property at all, let alone one that will be of material value or benefit to the Company. There can also be no assurance that the Company's cash needs can be indefinitely met by cash advances from a stockholder or anyone else associated with the Company. As stated elsewhere herein, management plans to investigate, research and, if justified, potentially acquire or merge with one or more businesses or business opportunities. Management will have broad discretion in its search for and negotiations with any potential business or business opportunity. Results of Operations REVENUE: We have generated no revenues from our continuing operations for the years ended June 30, 2009 and 2008. COMMON SHARES: During the year end June 30, 2009 we issued 100,000 shares to related parties for the reduction of amounts owed to them or for their services No other shares, warrants or options were issued in the most recent fiscal year. EXPENSES SUMMARY GENERAL AND ADMINISTRATIVE: Arkson spent $2,600 general and administrative costs in the year ended June 30, 2009 while $2,500 in such costs were incurred in the year ended June 30, 2008. The Company incurred a net loss of $2,600 in 2009 and $2,500 in 2008. LIQUIDITY AND CAPITAL RESOURCES Since discontinuing its former business operations on July 1, 2001, the Registrant has neither engaged in any operations nor generated any revenues. While we are dependent upon interim funding provided by Management to pay professional fees and expenses, we have no written finance agreement with Management to provide any continued funding. However, we may need to raise additional funds through a private offering of debt or equity securities if additional administrative funds are required to consummate a business combination that is presented to us. We have no agreements to issue any debt or equity securities and cannot predict whether equity or debt financing will become available at terms acceptable to us, if at all. At June 30, 2009, we had no assets and had liabilities of $17,606. There are no limitations in the Company's articles of incorporation on the Company's ability to borrow funds or raise funds through the issuance of restricted stock to effect a business combination. The Company's limited resources and lack of having cash-generating business operations may make it difficult to borrow funds or raise capital. The Company's inability to borrow funds or raise funds through the issuance of restricted capital stock required to effect or facilitate a business combination may have a material adverse effect on the Company's financial condition and future prospects, including the ability to complete a business combination. To the extent that debt financing ultimately proves to be available, any borrowing will subject us to various risks traditionally associated with indebtedness, including the risks of interest rate fluctuations and insufficiency of any future cash flow to pay principal and interest, including debt of an acquired business. 8
OFF-BALANCE SHEET ARRANGEMENTS As of June 30, 2009, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K promulgated under the Securities Exchange Act of 1934. CONTRACTUAL OBLIGATIONS AND COMMITMENTS As of June 30, 2009 we did not have any contractual obligations. CRITICAL ACCOUNTING POLICIES Our significant accounting policies are described in the notes to our financial statements included elsewhere in this annual report. ITEM 8. FINANCIAL STATEMENTS 9
ARKSON NUTRACEUTICALS CORP. (A Developmental Stage Company) Index to Financial Statements Page ------ Report of Independent Registered Public Accounting Firm.............. F-2 Balance Sheets at June 30, 2009 and 2008............................. F-3 Statements of Operations for the years ended June 30, 2009 and 2008 and from Oct 2, 1998 (inception) through June 30, 2009...................................................... F-4 Statements of Comprehensive Income (Loss) for the years ended June 30, 2009 and 2008 and from Oct 2, 1998 (inception) through June 30, 2009.................................. F-5 Statement of Changes in Shareholders' Equity (Deficit) from Oct 2, 1998, (inception) through June 30, 2009................ F-6 Statements of Cash Flows for the years ended June 30, 2009 and 2008 and from Oct 2, 1998 (inception) through June 30, 2009...................................................... F-7 Notes to Financial Statements........................................ F-8 F-1
Stan J.H. Lee, CPA 2160 North Central Rd. Suite 203 Fort Lee NJ 07024 P.O. Box 436402 San Ysidro CA 92143 619-623-7799 Fax 619-564-3408 E-mail) stan2u@gmail.com Report of Independent Registered Public Accounting Firm ------------------------------------------------------- To the Board of Directors Arkson Nutraceuticals Corp. We have audited the accompanying balance sheets of Arkson Nutraceuticals Corp. as of June 30, 2009 (restated) and the related statements of operations, changes in shareholders' equity and cash flows (restated) for the fiscal year then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Arkson Nutraceuticals Corp. as of June 30, 2009, as restated , and the results of their operations and its cash flows, as restated for the fiscal year then ended in conformity with U.S. generally accepted accounting principles. The financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 7 to the financial statements, the Company's results of operations raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. FINAL DRAFT /s/ Stan J.H. Lee ------------------ Stan J.H. Lee, CPA March 1, 2010 Fort Lee, NJ 07024 F-2
ARKSON NUTRACEUTICALS CORP. (A Developmental Stage Company) Balance Sheets December 31, June 30, 2009 2009 (unaudited) (audited) restated restated ------------ ------------ Assets Cash $ -- $ -- ------------ ------------ Total current assets -- -- ------------ ------------ Total assets $ -- $ -- ============ ============ Liabilities and Stockholders' Equity (Deficit) Current liabilities: Accounts Payable $ -- $ -- Note payable - related party -- 11,606 Note payable 12,606 1,000 Shareholder loan 4,285 -- Accrued Expenses 1,000 2,500 ------------ ------------ Total current liabilities 17,891 17,606 ============ ============ Commitments and contingencies Stockholders' equity (deficit): Preferred stock, $.001 par value, 50,000,000 shares authorized, none issued or outstanding -- -- Common stock, $.001 par value; 200,000,000 shares authorized, authorized, 645,889 shares issued and outstanding respectively 155 155 Additional paid-in capital 126,225 123,725 Retained earnings -- -- Deficit accumulated during development stage (144,271) (141,486) ------------ ------------ Total stockholders' equity (deficit) (17,891) (17,606) ------------ ------------ Total liabilities and stockholders' equity (deficit) $ -- $ -- ============ ============ The accompanying notes are an integral part of these financial statements. F-3
ARKSON NUTRACEUTICALS CORP. (A Developmental Stage Company) Statements of Operations October 2, 1998 (Inception) Three-Months Period Ended Six-Months Period Ended Through December 31, December 31, December 31, 2009 2008 2009 2008 2009 restated restated restated ------------ ------------ ------------ ------------ ------------ Revenue -- -- -- -- -- ------------ ------------ ------------ ------------ ------------ Operating expenses: Advertising -- -- -- -- 2,198 Bank Charges and Expense -- -- -- -- 1,102 Dues, subscription and membership -- -- -- -- 1,005 Miscellaneous expenses -- -- 152 Office expense 225 -- 785 -- 2,201 Profesional expense (500) -- 2,000 -- 94,148 Rent -- -- -- -- 27,796 Travel and entertainment -- -- -- -- 15,893 ------------ ------------ ------------ ------------ ------------ Total operating expenses $ (275) $ -- $ 2,785 $ -- 144,495 ------------ ------------ ------------ ------------ ------------ Operating income (Loss) 275 -- (2,785) -- (144,495) ------------ ------------ ------------ ------------ ------------ Other income (Expense) -- -- -- -- 290 Interest Income -- -- -- -- 194 ------------ ------------ ------------ ------------ ------------ Other income -- -- -- -- 484 Income tax Current income tax -- -- -- -- (260) Income tax benefit -- -- -- -- -- ------------ ------------ ------------ ------------ ------------ Net income (Loss) 275 -- (2,785) -- (144,271) ============ ============ ============ ============ ============ Basic and diluted loss per share $ -- $ -- -- $ -- ============ ============ ============ ============ Basic and diluted weighted average common shares outstanding 645,889 2,687,910 645,889 2,687,910 ============ ============ ============ ============ Diluted weighted average common shares outstanding 645,889 2,687,910 645,889 2,687,910 ============ ============ ============ ============ The accompanying notes are an integral part of these financial statements. F-4
ARKSON NUTRACEUTICALS CORP. (A Developmental Stage Company) Statements of Comprehensive Income (Loss) October 2, 1998 (Inception) For the Year Ended Through June 30, June 30 2009 2008 2009 ------------ ----------- ------------ Loss for the Year $ -- $ -- $ (141,486) Other Comprehensive Income (Loss) Foreign currency translation adjustments -- -- -- ------------ ----------- ------------ Comprehensive Loss $ -- $ -- $ (141,486) ------------ ----------- ------------ The accompanying notes are an integral part of these financial statements. F-5
ARKSON NUTRACEUTICALS CORP. (A Developmental Stage Company) Statement of Changes in Stockholders' Equity Additional Total Common Stock Paid-In Accumulated Stockholders' Shares Par Value Capital Deficit Equity ------------ ----------- ------------ ------------ ------------ Common stock issued for services 462,500 $ 46 $ (45) $ 0 $ 0 Common stock issued for cash at $.01 30,000 1 5,999 6,000 Common stock issued for cash at $.05 50,000 4 49,996 50,000 Net loss for year Ended Dec. 31, 1998 (37,878) (37,878) ------------ ----------- ------------ ------------ ------------ Balance, Dec. 31, 1998 542,500 50 55,950 (37,878) 18,122 Common stock issued for cash at $1.00 800 0 16,000 16,000 Net loss for year ended Dec. 31, 1999 (25,424) (25,424) ------------ ----------- ------------ ------------ ------------ Balance, Dec. 31, 1999 543,300 50 71,950 (63,302) 8,689 Common stock issued for services 89 0 1,780 1,780 Common stock issued for cash at $1.00 2,500 5 49,995 50,000 Net loss for year ended Dec. 31, 2000 (48,070) (48,070) ------------ ----------- ------------ ------------ ------------ Balance, Dec. 31, 2000 545,889 55 123,725 (111,372) 12,408 Net loss for year ended Dec. 31, 2001 (11,395) (11,395) ------------ ----------- ------------ ------------ ------------ Balance, Dec. 31, 2001 545,889 55 123,725 (122,768) 1,012 Net loss for year ended Dec. 31, 2002 (8,453) (8,453) ------------ ----------- ------------ ------------ ------------ Balance, Dec. 31, 2002 545,889 55 123,725 (131,221) (7,441) Net loss for year ended Dec. 31, 2003 (165) (165) ------------ ----------- ------------ ------------ ------------ Balance, Dec. 31, 2003 545,889 55 123,725 (131,386) (7,606) Net loss for year ended Dec. 31, 2004 ------------ ----------- ------------ ------------ ------------ Balance, Dec. 31, 2004 545,889 55 123,725 (131,386) (7,606) Net loss for year ended Dec. 31, 2005 ------------ ----------- ------------ ------------ ------------ Balance, Dec. 31, 2005 545,889 55 123,725 (122,768) (7,606) Net loss for year ended Dec. 31, 2006 ------------ ----------- ------------ ------------ ------------ Balance, Dec. 31, 2006 545,889 55 123,725 (131,386) (7,606) Common stock issued for services 39,000,000 3,900 (3,900) Common stock cancelled (39,000,000) (3,900) 3,900 Net loss for year ended June 30, 2007 (5,000) (5,000) ------------ ----------- ------------ ------------ ------------ Balance at June 30, 2007 545,889 55 123,725 (136,386) (12,606) Common stock issued for services -- -- -- Net loss for the year ended June 30, 2008 Net loss for year ended June 30, 2008 (2,500) (2,500) ------------ ----------- ------------ ------------ ------------ Balance at June 30, 2008 545,889 55 123,725 (138,886) (15,106) Common stock issued 100,000 100 100 Net loss for the year ended June 30,2009 Net loss for year ended June 30, 2009 (2,600) (2,600) ------------ ----------- ------------ ------------ ------------ Balance at June 30, 2009 645,889 155 123,725 (141,486) (17,606) ------------ ----------- ------------ ------------ ------------ All of the above per share amounts have been restated from inception for the 1 for 20 reverse stock split. The accompanying notes are an integral part of these financial statements. F-6
ARKSON NUTRACEUTICALS CORP. (A Developmental Stage Company) Statements of Cash Flows October 2, 1998 (Inception) Six-Months Ended Through December 31, December 31, 2009 2008 2009 restated restated ------------ ------------ ------------ Cash flows from operating activities: Net loss $ (2,785) $ -- $ (144,271) Adjustments to reconcile net loss to net cash used in operating activities: Increase in Accounts Payable Increase in Accrued Expenses (1,500) -- 3,500 ------------ ------------ ------------ Net cash provided by (used in) operations (4,285) -- (140,771) Cash flows from (used in) investing activities: ------------ ------------ ------------ Net cash used in investing activities -- -- -- ------------ ------------ ------------ Cash flows from financing activities: Loan from officer/shareholder 4,285 -- (38,099) Loan from related party -- -- 54,990 Issuance of common stock -- -- 123,880 ------------ ------------ ------------ Net cash provided by financing activities 4,285 -- 140,771 ------------ ------------ ------------ Net change in cash -- -- -- Cash, beginning of period -- -- -- ------------ ------------ ------------ Cash, end of period $ -- $ -- $ -- ============ ============ ============ Supplemental disclosure of cash flow information: Interest paid $ -- -- $ 0 ============ ============ ============ Income taxes paid $ -- $ -- $ 260 ============ ============ ============ The accompanying notes are an integral part of these financial statements. F-7
NUTRACEUTICALS CORP. (A Developmental Stage Company) Notes to Financial Statements June 30, 2009 and 2008 NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES THE COMPANY Arkson Nutraceuticals Corp. (the "Company"), was incorporated in the state of Delaware on October 2, 1998. The Company was organized to manufacture and sell a broad range of natural health food supplements. The Company currently has no operations and, in accordance with Statement of Financial Accounting Standard (SFAS) No. 7, "ACCOUNTING AND REPORTING BY DEVELOPMENT STAGE ENTERPRISES," is considered a development stage enterprise. Its activities to date have been limited to capital formation, organization, development of its business plan, and discussions with representatives of private label manufacturers and wholesale buyers of natural supplements. The Company adopted June 30 as its accounting fiscal year. CASH AND CASH EQUIVALENTS For purposes of the statements of cash flows, the Company considers cash instruments with original maturities of less than three months to be cash equivalents. START-UP COSTS Costs of start-up activities, including organization costs, are expensed as incurred, in accordance with Statement of Position (SOP) 98-5. INCOME TAXES The Company accounts for income taxes under SFAS No. 109, "Accounting for Income Taxes." This statement requires an asset and liability approach to account for income taxes. The Company provides deferred income taxes for temporary differences that will result in taxable or deductible amounts in future years based on the reporting of certain costs in different periods for financial and income tax purposes. There is no income tax for the periods ended June 30, 2008 or 2007. The Company has net operating loss carry forward from prior years that may be used to reduce future taxable income for income tax purposes. USE OF ESTIMATES The presentation 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, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the periods presented. Actual results may differ significantly from those estimates. FAIR VALUES OF FINANCIAL INSTRUMENTS Statement of Financial Accounting Standards No. 107, DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS, requires disclosure of fair value information about financial instruments, whether or not recognized in the balance sheet. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. F-8
In that regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, could not be realized in immediate settlement of the instruments. Statement No. 107 excludes certain financial instruments and all non-financial instruments from its disclosure requirements. STOCK-BASED COMPENSATION In accordance with the provisions of SFAS 123, the Company follows the intrinsic value based method of accounting as prescribed by APB 25, ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES, for its stock-based compensation. NEW ACCOUNTING PRONOUNCEMENTS - IMPACT OF NEW ACCOUNTING STANDARDS The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company's results of operations, financial position, or cash flows. NOTE 2 - STOCKHOLDERS' EQUITY COMMON STOCK The Company has authorized fifty million (50,000,000) shares of common stock, having one hundredth of a cent ($0.0001) par value per share. On October 2, 1998 the Company issued a total of 9,250,000 shares to its three founders for services rendered in connection with the organization of the Company. Also in 1998 the Company issued 600,000 shares of common stock for cash, net of offering costs, in the amount of $6,000. Also in 1998 the Company issued 1,000,000 shares of common stock for cash, net of offering costs, in the amount of $50,000. In 1999 the Company issued 16,000 shares of common stock for cash, net of offering costs, in the amount of $16,000. In 2000 the Company issued 50,000 shares of common stock for cash, net of offering costs, in the amount of $50,000, and also issued 1,780 shares for services valued at $1,780. As a result of these and the above described issuances, there were a total of 10,917,780 shares of common stock issued and outstanding at the end of 2000. From 2000 through the fiscal year ended June 30, 2006, the Company did not issue or cancel any stock. There were 10,917,780 shares of common stock issued and outstanding at June 30, 2006. During the fiscal year ending June 30, 2007 the Company voted to issue 39,000,000 shares of common stock to an officer for services, and then voted to rescind that issuance. On August 6, 2008 the Company completed a 1 for 20 reverse stock split. After the reverse stock split the company had 545,889 common shares outstanding. The company issued 100,000 common shares to Robert Auduon in the fourth quarter of 2009. The Company currently has 645,889 common shares outstanding as of June 30, 2009 and 545,889, June 30, 2008. PREFERRED STOCK The company is authorized to issued fifty million (50,000,000) shares of preferred stock at $0.001 par value. There are no shares of preferred stock issued or outstanding as of June 30, 2009 or 2008. F-9
NOTE 3 - NOTES June 30, 2009 ------------ Notes payable to an officer and shareholder Notes payable, originally at 10 % interest per annum and all accrued interest to date forgiven, agreement date - May 26, 2007, maturity date - November 26, 2007 $ 5,000 Notes payable, originally at 10 % interest per annum and all accrued interest to date forgiven, agreement date - September 29, 2007, maturity date - March 29, 2008 6,606 Notes payable, originally at 10 % interest per annum and all accrued interest to date forgiven, agreement date - September 11, 2005, maturity date - March 11, 2006 $ 1,000 ------------ $ 12,606 ============ All notes provides default clause under which the note holder can demand immediate payment with interest on default and option to convert at a price of $ 0.001 per share equivalent of the amount owning at the time of conversion. As of the date of financial statement, note holder has not demanded payment or exercised on the conversion option. Note holder has also forgiven the interest accrued to date. NOTE 4 - EARNINGS PER SHARE The computations of earnings per share for the years ended June 30, 2009 and 2008 were as follows: Year Ended June 30, 2009 2008 ----------- ------------ Loss per common share, basic Numerator Net Loss $ (2,600) $ (2,500) Denominator Weighted-average shares 645,889 545,889 Loss per common share $ (0.00) $ (0.00) For the years ended June 30, 2009 and 2008, there were 12,606,000 shares issuable based on the terms of convertible notes for $12,606 due to an officer of the Company. Therefore, diluted earnings (loss) per share for the year ended June 30, 2009 were approximately $(0.00) per share. For the year ended June 30, 2008 diluted earnings (loss) were $0 per share. NOTE 5 - INCOME TAXES At June 30, 2009, the Company has a net operating loss carryforward for tax purposes of approximately $136,486 which expires through the year 2019. The Internal Revenue Code contains provisions which may limit the loss carryforward available if significant changes in stockholder ownership of the Company occur. F-10
There was no income and no provisions for income taxes for the years ended June 30, 2009 and 2008. NOTE 6 - RELATED PARTY TRANSACTIONS LOANS PAYABLE Between October 2, 1998 (Inception) and December 31, 2003 certain officers and shareholders made a number of non-interest bearing loans to the Company totaling $54,990 and received principal repayments of those loans totaling $44,800. As of December 31, 2003, 2004, and 2005 one officer and shareholder was owed the principal sum of $10,190. On February 6, 2006 that officer and shareholder was repaid $2,585 of the sum owing to him. As a result, there was a liability of $7,606 owed to an officer and shareholder as of June 30, 2006. On February 8, 2007 that officer and shareholder loaned the Company an additional $5,000. As a result, there was a liability of $11,606 (after assignment of note in the amount of $ 1,000 to an unrelated party) owed to an officer and shareholder as of June 30, 2007 and also as of June 30, 2008. NOTE 7 - GOING CONCERN The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company's financial position and operating results raise substantial doubt about the Company's ability to continue. The Company has had no operating revenue since inception and has currently no operating business. The ability of the Company to continue as a going concern is dependent upon developing sales and obtaining additional capital and financing. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. NOTE 8 - SUBSEQUENT EVENT None NOTE 9 - COMMITMENT AND CONTINGENCY There is no commitment or contingency to disclose during the years ended June 30, 2009 and 2008. NOTE 10 - RESTATEMENT In February, 2010, we determined that it was necessary to restate our audited financial statements as at June 30, 2009 and our unaudited financial statements for the three month period ending September 30, 2009. The purpose of the restatements is to correct an error in accruals: Accrual of Audit Fees. ---------------------- In the course of a review by the Securities and Exchange Commission ("SEC") of the Company's Form 10-K for the Fiscal Year Ended June 30, 2009and Form 10-Q for the Fiscal Quarter Ended September 30, 2009, the SEC questioned the accrual of audit fees. Following an exchange of correspondence and discussions between the Company and the SEC regarding this issue, the Company has determined that it was necessary to accrue audit fees for the year end June 30, 2009 and the fiscal quarter ending September 30, 2009. Effects of the restatement by line item follow: F-11
Audited Consolidated Balance Sheets June 30, 2009 As Impact June 30, Previously of 2009 Reported Change Restated ---------- -------- ----------- Cash $ -- -- $ -- ---------- -------- ----------- Total current assets -- -- -- ---------- -------- ----------- Total assets $ -- -- $ -- ========== ======== =========== Current liabilities: Notes payable - related party 11,606 11,606 Note payable 1,000 1,000 Accrued expenses -- 5,000 5,000 ---------- -------- ----------- Total current Liabilities 12,606 17,606 Total liabilities 12,606 5,000 17,606 ---------- -------- ----------- Preferred stock, $.001 par value, 50,000,000 shares authorized, none issued or outstanding -- -- -- Common stock, $.001 par value; 200,000,000 shares authorized, authorized, 645,889 and 545,889 shares issued and outstanding respectively 155 -- 155 Additional paid-in capital 123,725 -- 123,725 Retained earnings -- -- Deficit accumulated during development stage (136,486) (5,000) (141,486) ---------- -------- ----------- Total shareholders' equity (deficit) (12,606) (17,606) ---------- -------- ----------- $ -- $ -- ========== ======== =========== Audited Income Statement October 2, 1998 (Inception) Through June 30, June 30 June 30, 2009 2009 2009 ---------- ---------- ---------- ----------- Previously Impact of Restated Restated Reported Change Revenue - - - ---------- ---------- ----------- Operating expenses: Advertising 2,198 Bank Charges and Expense 1,102 Dues, subscription and membership 1,005 Miscellaneous expenses 100 100 152 Office expense 1,416 Professional expense 2,500 2,500 92,148 Rent 27,796 Travel and entertainment 15,893 ---------- ---------- ---------- ----------- Total operating expenses $ 100 $ 2,600 $ 141,170 ---------- ---------- ----------- Other income (expense) 290 Interest Income 194 ---------- ---------- ----------- Other income 484 Income tax Current income tax (260) Income tax benefit - ---------- ---------- ----------- Net income (Loss) (100) (2,600) (141,486) ========== ========== =========== Basic and diluted loss per share $ -- $ -- ========== ========== =========== Audited Statement of Cash Flows October 2, 1998 (Inception) Through June 30, June 30 June 30, 2009 2009 2009 ---------- ---------- ---------- ----------- Previously Impact of Restated Restated Reported Change Cash flows from operating activities: Net loss $ (100) (2,500) $ (2,600) $ (141,486) Adjustments to reconcile net loss to net cash used in operating activities: Increase in accrued expenses 2,500 2,500 2,500 ---------- ---------- ----------- Net cash provided by (used in) operations (100) (100) 138,896 Cash flows from (used in) investing activities: Net cash used in investing activities -- -- 0 ---------- ---------- ----------- Cash flows from financing activities: Loan from officer/ shareholder -- -- 42,384 Loan from related party -- -- 54,990 Expense paid by controlling shareholder as contribution to capital -- 2,500 Issuance of common stock 100 -- 123,880 ---------- ---------- ----------- Net cash provided by financing activities 100 -- 138,986 ---------- ---------- ----------- Net change in cash -- -- -- Cash, beginning of period -- -- -- ---------- ---------- ----------- Cash, end of period $ -- $ -- $ -- ========== ========== =========== F-12
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. ITEM 9-A. CONTROLS AND PROCEDURES a) Evaluation of Disclosure Controls and Procedures The Company's management, including its Chief Executive Officer, who is its principal executive officer, completed an evaluation of the effectiveness of the design and operation of the Company's disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act") as of the end of the period covered by this Form 10-K. Disclosure controls and procedures are designed to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the SEC rules and forms, and that such information is accumulated and communicated to management, including the President and Chief Executive Officer, as appropriate, to allow timely decisions regarding required disclosures. Based on that evaluation, the Company's Chief Executive Officer concluded that the Company's disclosure controls and procedures, as of the end of the fiscal year covered by this Form 10-K, were effective. Our management, including our principal executive officer and principal financial officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of June 30, 2009 and concluded that the disclosure controls and procedures were effective (b) Management's Annual Report on Internal Control over Financial Reporting The Company's management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act and for assessing the effectiveness of internal control over financial reporting. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. In addition, projections of any evaluation of effectiveness of internal control over financial reporting 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. 10
Our management, including our principal executive officer and principal accounting officer, conducted an evaluation of the effectiveness of our internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control--Integrated Framework. Based on its evaluation, our management concluded that there is no material weakness in our internal control over financial reporting and the internal control of financial reporting was effective. This report shall not be deemed to be filed for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liabilities of that section, and is not incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing. This Annual Report on Form 10-K 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 rules of the SEC that permit the Company to provide only management's report in this Annual Report on Form 10-K. (c) Changes in Internal Control over Financial Reporting The Company's accounting staff and therefore the sole person responsible for internal controls changed in the forth quarter of 2009. There were no changes in the Company's internal control over financial reporting that occurred during the fourth quarter of the year ended June 30, 2009 that have materially affected, or that are reasonably likely to materially affect, the Company's internal control over financial reporting. ITEM 9-B. OTHER INFORMATION None. PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT, COMPLIANCE WITH SECTION 16(A) All directors of our company hold office until the next annual general meeting of the shareholders or until their successors are elected and qualified. The officers of our company are appointed by our board of directors and hold office until their earlier death, retirement, resignation or removal. Our directors, executive officers and other significant employees, their ages, positions held and duration each person has held that position, are as follows: Name Position Held with Age Date First the Corporation Elected / Appointed ============== ======================== ========= ======================= David Roff President, Secretary, 38 2009 Treasurer and Director -------------- ------------------------- --------- ----------------------- Business Experience The following is a brief account of the education and business experience of each director, executive officer and key employee during at least the past five years, indicating each person's principal occupation during the period, and the name and principal business of the organization by which he was employed. 11
Mr. David Roff is the co-president of, Brave Consulting, a private consulting and investment corporation and has held this position since 2001. Mr. Roff has extensive experience working with small cap public companies for ten years. Prior to that, Mr. Roff was a management consultant for Coopers & Lybrand Consulting where he advised large financial institutions, investment fund complexes and other organizations on technology and internal control strategies. He was the former President and Sole Director of Deep Well from September 10, 2003 until February 6, 2004. Mr. Roff is on the board of Directors of Deep Well Oil & Gas, (DWOG-PK) and Hudson's Grill International (HGII-PK). Mr. Roff is a Chartered Accountant with a B.A. degree from the University of Western Ontario. Our directors, executive officers and control persons have not been involved in any of the following events during the past five years: 1. any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; 2. any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offences); 3. being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; or 4. being found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated. Arkson does not have any committees of the board of directors at this time. The board of directors does not have a nominations committee because there is one director and shareholder suggestions would be known to the entire board. As such, the board of directors believes there will be sufficient communication by shareholders with the board about matters and nominees to be brought to its attention. Audit Committee Arkson's sole director functions as an audit committee and performs some of the same functions as an audit committee including: (1) selection and oversight of the Company's independent accountant; and (2) establishing procedures for the receipt, retention and treatment of complaints regarding accounting, internal controls and auditing matters. Accordingly, the board of directors believes that its director has the sufficient knowledge and experience necessary to fulfill the duties and obligations that an audit committee would have. David Roff has been designated as our qualified financial expert Corporate Governance There have been no material changes to the procedures by which security holders may recommend nominees to our board of directors. Code of Ethics We have not adopted a Code of Business Conduct and Ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions because we are not a member of any exchange that would require such a code. Compliance With Section 16(a) of the Exchange Act Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our executive officers and directors and persons who own more than 10% of a registered class of our equity securities to file with the Securities and Exchange Commission initial statements of beneficial ownership, reports of changes in ownership and annual reports concerning their ownership of our common stock and other equity securities, on Forms 3, 4 and 5 respectively. Executive officers, directors and greater than 10% shareholders are required by the Securities and Exchange Commission regulations to furnish our company with copies of all Section 16(a) reports they file. To the best of our knowledge, all executive officers, directors and greater than 10% shareholders filed the required reports in a timely manner, with the exception of the following: (n/a). 12
ITEM 11. EXECUTIVE COMPENSATION The following table sets forth information concerning all compensation paid or accrued by us to our President and Chief Executive Officer, during the fiscal year ended December 31, 2008. None of the officer receives compensation in excess of $100,000 per year. Long-Term Annual Compensation Compensation Awards Name and Fiscal Stock Options All Other Principal Position Year Salary Bonus Granted Compensation -------------------------------------------------------------------------------- David Roff 2009 $0 -- -- -- President Robert Auduon 2009 $0 -- -- $0 President 2008 $0 -- -- $0 Agatha Auduon 2009 $0 -- -- $0 CFO 2008 $0 -- -- $0 Stock Option Grants No stock options were granted during the fiscal year ended June 30, 2009 or June 30, 2008. Options Exercised and Year-End Option Values The following table sets forth certain information regarding the value of unexercised options held by the named executive officer as of June 30, 2009. Fiscal Year-End Option Values(1) Value of Shares Value Number of Shares Unexercised Acquired Realized Underlying Unexercised In-the-Money upon From Options at Options at Exercise Exercise December 31, 2008 December 31, 2008 Name of Options Of Options Exercisable Unexercisable Exercisable Unexercisable --------------------------------------------------------------------------------------------- David Roff -- -- -- -- $ -- $ -- Stock Option Plan The company has no stock option plan. Compensation of Directors The Company does not pay any compensation to directors. Director Compensation Nonqualified Fees earned Non-equity deferred or paid in Stock Option incentive plan compensation All other cash awards awards compensation earnings compensation Total Name ($) ($) ($) ($) ($) ($) ($) David Roff $0 -- -- --- --- --- $0 Employment Agreements We have no employment agreements. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table sets forth, as of July , 2009, certain information with respect to the beneficial ownership of our common shares by each shareholder known to us to be the beneficial owner of 5% of our common shares, and by each of our officers and directors. Each person has sole voting power with respect to the common shares, except as otherwise indicated. Beneficial ownership consists of a direct interest in the common shares, except as otherwise indicated. ================================================================================ Amount and Nature Name and Address of of Beneficial Percentage of Class(1) Beneficial Owner Ownership ================================================================================ David Roff 325,000 Direct 50.03% ================================================================================ Robert Auduon 39,730 6.15% ================================================================================ Agatha Auduon 68,000 10.53% ================================================================================ David Lo 100,000 15.48% ================================================================================ Directors and Officers 325,000 Direct 50.03% (as a group) ================================================================================ (1) Based on 645,889 shares outstanding as of February 15, 2009 and, as to a specific person, shares issuable pursuant to the conversion or exercise, as the case may be, of currently exercisable or convertible debentures, share purchase warrants and stock options within 60 days. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS During the last two fiscal years, to the knowledge of the Registrant, there was no person who had or has a direct or indirect material interest in any transaction or proposed transaction to which the Registrant was or is a party. Item 14. Principal Accounting Fees and Services The following table presents fees for professional services rendered by Stan J.H. Lee for the audit of the Company's financial statements as of the year end June 30, 2009 and June 30, 2008 and fees billed for other services rendered by Stan J. H. Lee during those periods. Years Ended 2009 2008 ----------- ------------ Audit Fees $ 2,500 $ 2,500 Audit Related Fees $ - $ - Tax Fees $ - $ - All other Fees $ - $ - 13
ITEM 15. EXHIBITS AND REPORTS ON FORM 8-K a) The following documents are filed as exhibits to this report on Form 10-K or incorporated by reference herein. Any document incorporated by reference is identified by a parenthetical reference to the SEC filing that included such document. Exhibit No. Description ----------- ----------- 3-1A Amendment to Articles of Incorporation 31.1 Certification of CEO pursuant to Rule 13a-14(a) or 15d-14(a) of the Exchange Act pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2 Certification of CFO pursuant to Rule 13a-14(a) or 15d-14(a) of the Exchange Act pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1 Certification of CEO and CFO pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 14C Incorporated by reference. Filed July 16, 2008. (File # 08955524) b) Reports on Form 8-K During the Last Quarter of the Fiscal Year Covered by this Report: On June 3rd 2009 the registrant filed a report on Form 8-K section 5.01 and 5.02 announcing the appointment of David Roff as the new officer and director of the company. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated. Dated: March 1, 2010 /s/ David Roff --------------------------- David Roff CEO, CFO and Director (Principal Executive Officer) 14 -------------------------------------------------------------------------------