Attached files
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| EX-31.1 - EXHIBIT 31.1 - KALEX CORP | ex311.htm |
| EX-31.2 - EXHIBIT 31.2 - KALEX CORP | ex312.htm |
| EX-32.2 - EXHIBIT 32.1 - KALEX CORP | ex322.htm |
| EX-32.1 - EXHIBIT 32.1 - KALEX CORP | ex321.htm |
Washington, D.C. 20549
FORM 10-Q
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x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended September 30, 2011
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from
Commission File No. 000-52177
KALEX CORP.
(Exact name of small business issuer as specified in its charter)
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Delaware
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13-3305161
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(State or other jurisdiction of incorporation Or organization)
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(I.R.S. Employer Identification No.)
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330 East 33rd Street Suite 15M, New York, NY 10016
(Address of Principal Executive Offices)
(212) 686-7171
(Issuer’s telephone number)
Check whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No x
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes No x
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,” “non-accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ¨ Accelerated filer ¨
Non-accelerated filer ¨ Smaller reporting company þ
(Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes x No ¨
As of September 30, 2011, the Issuer had 725,200 shares of common stock issued and outstanding.
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Page
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PART I – FINANCIAL INFORMATION
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11
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14
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PART II – OTHER INFORMATION
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2
This quarterly report on Form 10-Q is being filed with the Securities and Exchange Commission to bring KALEX CORP. (the “Company”, “we”, “us”, and “our”) current in its filings and reports under the Securities Exchange Act of 1934. Accordingly, this quarterly report is intended to be a historical document disclosing the status of the Company as of September 30, 2011 and does not include any subsequent events. Information for periods subsequent to the three months ended September 30, 2011 is available in our quarterly report on Form 10-Q for the three and six months ended December 31, 2011, in our quarterly report on Form 10-Q for the three and nine months ended March 31, 2012 and our annual report on Form 10-K for the year ended June 30, 2012, which reports we intend to file on or around the filing of this quarterly report.
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PART 1 - FINANCIAL INFORMATION
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KALEX CORPORATION
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BALANCE SHEETS
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September 30,
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June 30,
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ASSETS
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2011
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2011
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Cash and cash equivalents
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$
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555
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$
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555
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TOTAL ASSETS
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$
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555
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$
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555
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LIABILITIES AND DECIENCY IN ASSETS
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Accrued expenses
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$
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20,833
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$
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0
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Due to affiliates
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34,700
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34,700
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TOTAL LIABILITIES
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55,533
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34,700
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Preferred stock - $.00001 par value, 2,000 shares authorized;
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Convertible Series A Preferred Stock, 1,000 shares issued and outstanding
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-
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-
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Common stock - $.01 par value as of June 30, 2011, 800,000,000 authorized; $.00001par value, 800,000,000 shares authorized
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800,000 shares issued and 725,200 outstanding
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8
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8,000
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Treasury stock - 74,800 shares
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(23,025
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)
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(23,025
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)
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Additional paid in capital
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10,992
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3,000
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Accumulated deficit
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(42,953
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)
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(22,120
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)
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Deficiency in assets
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(54,978
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)
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(34,145
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)
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TOTAL LIABILITIES AND DEFICIENCY IN ASSETS
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$
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555
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$
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555
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KALEX CORP.
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Statements of Operations
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(Unaudited)
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For the three months ended
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September 30
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September 30
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2011
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2010
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General and administrative expenses
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$ | 20,833 | $ | 0 | ||||
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Net loss
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$ | (20,833 | ) | $ | 0 | |||
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Basic and diluted loss per share based on
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725,200 weighted average shares
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$ | (0.03 | ) | $ | 0.00 | |||
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of outstanding stock
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800,000,000 shares authorized
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Additional
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Treasury Stock
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Shares
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Par Value
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Paid-in
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No. of
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Accumulated
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Issued
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$.00001 per share
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Capital
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Shares
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Amount
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Deficit
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Total
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DEFICIENCY IN ASSETS - JUNE 30, 2011
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800,000
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$
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8
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$
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10,992
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74,800
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$
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(23,025
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)
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$
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(22,120
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)
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$
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(34,145
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)
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Net income/loss
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-
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-
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-
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-
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-
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(20,833
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)
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(20,833
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)
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DEFICIENCY IN ASSETS – SEPTEMBER 30, 2011
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800,000
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$
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8
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10,992
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74,800
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(23,025
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)
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$
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(42,953
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)
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$
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(54,978
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)
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KALEX CORP.
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Statements of Cash Flows
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(Unaudited)
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For the three months ended
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September 30,
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September 30,
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2011
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2010
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CASH FLOWS FROM OPERATING ACTIVITIES:
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Net loss
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$ | (20,833 | ) | $ | 0 | |||
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Adjustments to reconcile net loss to net cash used in
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operating activities:
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Changes in operating assets and operating liabilities:
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Accrued expenses
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20,833 | 0 | ||||||
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Net Cash Used In Operating Activities
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0.00 | 0.00 | ||||||
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INCREASE IN CASH
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0 | 0.00 | ||||||
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CASH AT BEGINNING OF PERIOD
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555 | 1,833 | ||||||
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CASH AT END OF PERIOD
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$ | 555 | $ | 1,833 | ||||
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SUPPLEMENTAL OF CASH FLOW INFORMATION"
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Interest paid
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$ | 0.00 | $ | 0.00 | ||||
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Taxes paid
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$ | 0.00 | $ | 0.00 | ||||
7
NOTE 1 – SUMMARY OF ACCOUNTING POLICIES
Kalex Corp. ("the Company") was incorporated on March 27, 1984 under the laws of the State of Delaware. The company is a publicly-owned company, not currently operating in any business. The company, through a wholly-owned subsidiary, was previously in the real estate business.
The Company’s business is to pursue a business combination through acquisition, or merger with, an existing company. As of the date of the financial statements, the Company is not conducting negotiations with any target business. No assurances can be given that the Company will be successful in locating or negotiating with any target company.
Since inception, the Company has been engaged in organizational efforts.
Method of Accounting
The Company maintains its books and prepares its financial statements on the accrual basis of accounting.
Cash and Cash Equivalents
Cash and cash equivalents include time deposits, certificates of deposit, and all highly liquid debt instruments with original maturities of three months or less. The Company maintains cash and cash equivalents at financial institutions, which periodically may exceed federally insured amounts.
Loss Per Common Share
Loss per common share is computed in accordance with FASB ASC 260-10 (Prior authoritative literature Statement of Financial Accounting Standards No. 128, “Earnings Per Share”), by dividing income (loss) available to common stockholders by weighted average number of common shares outstanding for each period.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results can differ from those estimates.
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Income Taxes
The Company accounts for income taxes in accordance with FASB ASC 740-10 (Prior authoritative literature Statement of Financial Accounting Standards No. 109, “Accounting for Income Taxes”), using the asset and liability approach, which requires recognition of deferred tax liabilities and assets for the expected future tax consequences of temporary differences between the carrying amounts and the tax basis of such assets and liabilities. This method utilizes enacted statutory tax rates in effect for the year in which the temporary differences are expected to reverse and gives immediate effect to changes in income tax rates upon enactment. Deferred tax assets are recognized, net of any valuation allowance, for temporary differences and net operating loss and tax credit carry forwards. Deferred income tax expense represents the change in net deferred assets and liability balances.
Recent Pronouncements
The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company’s results of operations, financial position, or cash flow.
Equity Securities
Holders of shares of common stock shall be entitled to cast one vote for each common share held at all stockholders’ meetings for all purposes, including the election of directors. The common stock does not have cumulative voting rights.
The preferred stock of the Company shall be issued by the Board of Directors of the Company in one or more classes or one or more series within any class and such classes or series shall have such voting powers, full or limited, or no voting powers, and such designations, preferences, limitations or restrictions as the Board of Directors of the Company may determine, from time to time.
No holder of shares of stock of any class shall be entitled as a matter of right to subscribe for or purchase or receive any part of any new or additional issue of shares of stock of any class, or of securities convertible into shares of stock or any class, whether now hereafter authorized or whether issued for money, for consideration other than money, or by way of dividend.
NOTE 2 – LIQUIDITY AND GOING CONCERN
The Company’s financial statements have been presented on the basis that it is a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has reported recurring losses from operations. As a result, there is an accumulated deficit of $42,953 at September 30, 2011.
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NOTE 3 – DUE TO AFFILIATES
Due to affiliates represents cash advances from various persons who have loaned the company funds. There are no repayment terms.
A. The company has been operating out of the premises either owned by or leased to the president and CEO of the company. As the company is not generating any operational income, no rent has been charged to the company.
B. Some of the company's bills have been paid by its former president and CEO, and its late CEO, as well as other companies and individuals affiliated with them. As of September 30, 2011 a total of $34,700 is owed to the related parties as follows:
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Kumala,Inc.
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13,000
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Kuno Laren
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8,000
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Grant lnc.
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10,000
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Norman King
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3,700
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NOTE 4 – EQUITY
The Articles of Incorporation reflect that the Company is authorized to issue 800,000,000 shares of common stock having a par value of $.00001 per share and 2,000 shares of preferred stock having a par value of $.00001 per share. The Company has 725,200 common shares outstanding and 74,800 common shares in treasury stock. There are 1,000 shares of Series A preferred shares outstanding.
NOTE 5 – CANCELLATION OF AGREEMENT
On July 12, 2012, the Company and American Marketing Complex Int’l Inc. (“AMCII”) mutually agreed to rescind that certain Stock Agreement by and between the Company and AMCII (the “Stock Agreement”), as of the date of the original Stock Agreement, July 12, 2010. The rescission of the Stock Agreement was mutually agreed upon on the basis of: the current inability of AMCII to provide the media credits in accordance with the Stock Agreement; the inability of the Company to pay certain fees related to using the credits because of the lack of financial support formally provided by the late Mr. King; and the effect of having to issue potentially very large amounts of the Company’s common stock to pay for the fees related to using the credits if not paid for in cash. As a result of the rescission of the Stock Agreement, the media credit asset and the derivative liability, the obligation to issue stock when AMCII requests such issuance, that were recorded pursuant to the Stock Agreement were removed from the Company’s books. The Company has filed amended statements with the Securities and Exchange Commission to reflect the change to its financials.
NOTE 6 – RESTATEMENT OF PRIOR YEAR FINANCIAL STATEMENT
The Company restated its financial statement for the year ended June 30, 2011 pursuant to the rescission of the media credits/stock agreement with American Marketing Complex International, Inc.
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The following discussion and analysis should be read in conjunction with our consolidated financial statements, including the notes thereto, appearing in this Form 10-Q and in our Annual Report on Form 10-K for the fiscal year ended June 30, 2012, which is hereby referenced.
Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements generally are identified by the words “believes,” “project,” “expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,” “may,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. We intend such forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and are including this statement for purposes of complying with those safe-harbor provisions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse affect on our operations and future prospects on a consolidated basis include, but are not limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Further information concerning our business, including additional factors that could materially affect our financial results, is included herein and in our other filings with the SEC.
The Company currently does not engage in any business activities that provide cash flow. During the next twelve months we anticipate incurring costs related to:
(i) filing Exchange Act reports, and
(ii) investigating, analyzing and consummating an acquisition.
We believe we will be able to meet these costs through use of funds in our treasury, through deferral of fees by certain service providers and additional amounts, as necessary, to be loaned to or invested in us by our stockholders, management or other investors.
The Company may consider acquiring a business which has recently commenced operations, is a developing company in need of additional funds for expansion into new products or markets, is seeking to develop a new product or service, or is an established business which may be experiencing financial or operating difficulties and is in need of additional capital. In the alternative, a business combination may involve the acquisition of, or merger with, a company which does not need substantial additional capital but which desires to establish a public trading market for its shares while avoiding, among other things, the time delays, significant expense, and loss of voting control which may occur in a public offering.
Any target business that is selected may be a financially unstable company or an entity in its early stages of development or growth, including entities without established records of sales or earnings. In that event, we will be subject to numerous risks inherent in the business and operations of financially unstable and early stage or potential emerging growth companies. In addition, we may effect a business combination with an entity in an industry characterized by a high level of risk, and, although our management will endeavor to evaluate the risks inherent in a particular target business, there can be no assurance that we will properly ascertain or assess all significant risks.
The Company anticipates that the selection of a business combination will be complex and extremely risky. Because of general economic conditions, rapid technological advances being made in some industries and shortages of available capital, our management believes that there are numerous firms seeking even the limited additional capital which we will have and/or the perceived benefits of becoming a publicly traded corporation. Such perceived benefits of becoming a publicly traded corporation include, among other things, facilitating or improving the terms on which additional equity financing may be obtained, providing liquidity for the principals of and investors in a business, creating a means for providing incentive stock options or similar benefits to key employees, and offering greater flexibility in structuring acquisitions, joint ventures and the like through the issuance of stock. Potentially available business combinations may occur in many different industries and at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities extremely difficult and complex.
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Critical Accounting Policies
Our financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis. The preparation of financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosures. On an on-going basis, management evaluates these estimates and assumptions, including but not limited to those related to revenue recognition and the impairment of long-lived assets, goodwill and other intangible assets. Management bases its estimates on historical experience and various other assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
Stock Based Compensation
The Company accounts for stock-based compensation using the fair value method following the guidance set forth in section 718-10 of the FASB Accounting Standards Codification for disclosure about Stock-Based Compensation. This section requires a public entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost will be recognized over the period during which an employee is required to provide service in exchange for the award- the requisite service period (usually the vesting period). No compensation cost is recognized for equity instruments for which employees do not render the requisite service.
Revenue Recognition
We recognize revenue on arrangements in accordance with Securities and Exchange Commission Staff Accounting Bulletin No. 101, “Revenue Recognition in Financial Statements’ and No. 104, “Revenue Recognition.” In all cases, revenue is recognized only when the price is fixed or determinable, persuasive evidence of an arrangement exists, the service is performed and collectability of the resulting receivable is reasonably assured.
General and Administrative Expenses
We expect that general and administrative expenses associated with executive compensation will increase in the future. Although our current chief executive, president, secretary and treasurer have currently foregone full salary payments, we anticipate retroactive and current compensation during 2012. In addition, we believe in the 2013 fiscal year that the compensation packages required to attract the senior executives we require to execute our business plan will increase our total general and administrative expenses.
Summary of Consolidated Condensed Results of Operations
Any measurement and comparison of revenues and expenses from continuing operations should not be considered necessarily indicative or interpolated as the trend to forecast our future revenues and results of operations.
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Liquidity and Capital Resources
As of September 30, 2011, the Company had assets equal to $555. This compares with assets of $555, comprised exclusively of cash, as of September 30, 2010. The Company’s current liabilities as of September 30, 2011 totaled $55,533, comprised of accrued legal expenses and loans from related parties. This compares with current liabilities of $34,700 as of September 30, 2010. The Company can provide no assurance that it can continue to satisfy its cash requirements for at least the next twelve months.
The Company has nominal assets and has generated no revenues. The Company is also dependent upon the receipt of capital investment or other financing to fund its ongoing operations and to execute its business plan of seeking a combination with a private operating company. In addition, the Company is dependent upon certain related parties to provide continued funding and capital resources. If continued funding and capital resources are unavailable at reasonable terms, the Company may not be able to implement its plan of operations.
Results of Operations
The Company has not conducted any active operations in several years, except for its efforts to locate suitable acquisition candidates. No revenue has been generated by the Company since 1995. It is unlikely the Company will have any revenues unless it is able to effect an acquisition or merger with an operating company, of which there can be no assurance. It is management's assertion that these circumstances may hinder the Company's ability to continue as a going concern. The Company’s plan of operation for the next twelve months shall be to continue its efforts to locate suitable acquisition candidates.
Off-Balance Sheet Arrangements
The Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.
Contractual Obligations
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide this information.
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Critical Accounting Policies
Our financial statements and related public financial information are based on the application of accounting principles generally accepted in the United States (“GAAP”). GAAP requires the use of estimates; assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenue and expense amounts reported. These estimates can also affect supplemental information contained in our external disclosures including information regarding contingencies, risk and financial condition. We believe our use if estimates and underlying accounting assumptions adhere to GAAP and are consistently and conservatively applied. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions. We continue to monitor significant estimates made during the preparation of our financial statements.
Item 3. 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 information under this item.
Evaluation of Disclosure Controls and Procedures
As of the end of the period covered by this report, we carried out, under the supervision and with the participation of our President, an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) in ensuring that information required to be disclosed by us in our reports is recorded, processed, summarized and reported within the required time periods.
Accordingly, based on their evaluation of our disclosure controls and procedures as of September 30, 2011, our President has concluded that, as of that date, our controls and procedures were not effective because this quarterly report on Form 10-Q is not being filed within the time period specified in the SEC’s rules and forms. We are committed to improving our financial organization and we are in the process of determining how filing delays may be avoided in the future.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
14
PART II - OTHER INFORMATION
We are not a party to any pending legal proceeding. We are not aware of any pending legal proceeding to which any of our officers, directors, or any beneficial holders of 5% or more of our voting securities are adverse to us or have a material interest adverse to us.
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 information under this item.
None.
None.
None.
None.
15
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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DATED: June 21, 2013
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KALEX CORP.
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/s/ Arnold F. Sock
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BY: Arnold F. Sock
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ITS: President
(Principal Executive Officer)
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(Principal Financial Officer )
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