UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

FORM 10-Q

 

[ x ]	QUARTERLY REPORT PURSANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended June 30, 2013

 

Or

 

[ ]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from __________ to __________

    

Commission File Number:  000-54142

CREDEX CORP

(Exact name of registrant as specified in its charter)

 

	Florida		16-1731286
	(State of Incorporation)		(IRS Employer ID Number)

 

848 Rainbow Blvd, # 2096 Las Vegas, NV 89107

(Address of principal executive offices and Zip Code)

 

Registrant’s telephone number, including area code

(801) 243-5661

 

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 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 [ X ]
(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 [ ]

 

APPLICABLE TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

 

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes [ ] No [ ]

APPLICABLE ONLY TO CORPORATE ISSUERS:

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of 14^th August 2013 is 5,899,250 shares.

 

 

 

CREDEX CORPORATION

(A Development Stage Company)

 

	PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements	F-1
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	2
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	3
Item 4.	Controls and Procedures	4
Item 4T.	Controls and Procedures	4
	PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	5
Item A.	Risk Factors	5
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	9
Item 3.	Defaults Upon Senior Securities	9
Item 4.	Mine Safety Disclosures	9
Item 5.	Other Information	9
Item 6.	Exhibits	9
		9
Signature		10

 

 

  

 

 

 

 

PART I — FINANCIAL INFORMATION

 

Item 1.  Financial Statements
INDEX TO UNAUDITED FINANCIAL STATEMENTS	PAGE
Unaudited Balance Sheets at June 30, 2013 and December 31, 2012	F-2
Unaudited Statements of Operations for the three and six month periods ended June 30, 2013 and 2012 and for the period from inception, September 2, 2005, through June 30, 2013	F-3
Unaudited Statements of Stockholders’ Deficit for the period from inception, September 2, 2005, through June 30, 2013	F-4
Unaudited Statements of Cash Flows for the six month periods ended June 30, 2013 and 2012 and for the period from inception, September 2, 2005, through June 30, 2013	F-5
Notes to Financial Statements	F-6

 

 

  

 

 

 

Credex Corp
(A Development Stage Company)
BALANCE SHEETS (Unaudited)
June 30, 2013 and December 31, 2012
		June 30,				December 31,
		2013				2012
		(Unaudited)				(Unaudited)
ASSETS
CURRENT ASSETS:
Cash		$	—			$	—
Prepaid Expenses			—				2,000
Total Assets		$	—			$	2,000
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
Accounts payable		$	4,989			$	2,139
Stockholder loans payable			7,700				7,700
Total  Liabilities			12,689				9,839
STOCKHOLDERS' DEFICIT:
Common stock, $0.001 par value;
100,000,000 authorized shares, 5,899,250
shares issued and outstanding at
June 30, 2013, and December 31, 2012, respectively			5,899				5,899
Additional paid-in capital			295,543				295,543
Accumulated deficit during the development stage			(314,131	)			(309,281	)
Total Stockholders' Deficit			(12,689	)			(7,839	)
Total Liabilities and Stockholders' Deficit		$	—			$	2,000
The accompanying notes are an integral part of these financial statements.

 

Credex Corp
(A Development Stage Company)
STATEMENTS OF OPERATIONS (Unaudited)
For the Three and Six Months ended June 30, 2013 and 2012
For Periods from Inception (September 2, 2005) to June 30, 2013
		Three Months Ended June 30, 2013				Three Months Ended June 30, 2012				Six Months Ended June 30, 2013				Six Months Ended June 30, 2012				Cumulative from Inception (September 2, 2005) to June 30, 2013
		(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)
REVENUE:
Finance income		$	—			$	—			$	—			$	—			$	15,417
Consulting income			—				—				—				—				8,000
TOTAL REVENUE			—				—				—				—				23,417
OPERATING EXPENSES:
Travel			—				—				—				—				6,882
Office expenses			—				—				—				—				10,027
Telephone			—				—				—				—				2,963
Professional fees			950				2,339				4,250				5,678				279,510
Advertising			—				—				—				—				350
Portfolio purchase			—				—				—				—				21,000
Seminar			—				—				—				—				1,585
Stock transfer agent fees			300				500				600				600				7,200
Rent			—				—				—				—				6,511
TOTAL OPERATING EXPENSES			1,250				2,839				4,850				6,278				336,028
LOSS FROM OPERATIONS			(1,250	)			(2,839	)			(4,850	)			(6,278	)			(312,611	)
OTHER INCOME (EXPENSE):
Interest income			—				—				—				—				33
Interest expense			—				—				—				—				(1,553	)
TOTAL OTHER INCOME (EXPENSE)			—				—				—				—				(1,520	)
LOSS BEFORE PROVISION FOR INCOME TAXES			(1,250	)			(2,839	)			(4,850	)			(6,278	)			(314,131	)
PROVISION FOR INCOME TAXES			—				—				—				—				—
NET LOSS		$	(1,250	)		$	(2,839	)		$	(4,850	)		$	(6,278	)		$	(314,131	)
Net Loss Per Share: Basic and Diluted		$	(0.000	)		$	(0.000	)		$	(0.000	)		$	(0.000	)
Weighted average number of shares outstanding			5,899,250				5,899,250				5,899,250				5,899,250
The accompanying notes are an integral part of these financial statements.

 

		Credex Corp
		(A Development Stage Company)
		STATEMENTS OF STOCKHOLDERS’ DEFICIT (Unaudited)
		For Periods from Inception (September 2, 2005) to June 30, 2013
		Common Stock								Additional								Development				Total
										Paid-in				Unearned				Stage				Stockholders’
		Shares				Amount				Capital				Capital				Deficit				Deficit
September 2, 2005, Date of Incorporation			—			$	—			$	—			$	—			$	—			$	—
Shares purchased for cash at $0.001 per share			10,000				10				990				—				—				1,000
Net loss for year ended December 31, 2005			—				—				—				—				(8,397	)			(8,397	)
Balances - December 31, 2005			10,000				10				990				—				(8,397	)			(7,397	)
Net loss for year ended December 31, 2006			—				—				—				—				(8,056	)			(8,056	)
Balances - December 31, 2006			10,000				10				990				—				(16,453	)			(15,453	)
Stock holders loan used to purchase shares at $0.0072 per share			2,490,000				2,490				15,441				—				—				17,931
Net loss for year ended December 31, 2007			—				—				—				—				(2,087	)			(2,087	)
Balances - December 31, 2007			2,500,000				2,500				16,431				—				(18,540	)			391
Shares issued for cash at $0.02 per share			350,000				350				6,650				—				—				7,000
Net loss for year ended December 31, 2008			—				—				—				—				(7,001	)			(7,001	)
Balances - December 31, 2008			2,850,000				2,850				23,081				—				(25,541	)			390
Shares issued for cash at $0.02 per share			715,500				715				13,595				—				—				14,310
Net loss for year ended December 31, 2009			—				—				—				—				(15,015	)			(15,015	)
Balances - December 31, 2009			3,565,500				3,565				36,676				—				(40,556	)			(315	)
Shares issued for cash at $0.02 per share			267,500				268				5,082				—				—				5,350
Shares issued for cash at $0.04 per share			566,250				566				22,084				—				—				22,650
Shares issued for future services at $0.133 per share (Note D)			1,500,000				1,500				198,500				(200,000	)			—				—
Unearned capital amortized			—				—				—				100,000				—				100,000
Net loss for year ended December 31, 2010			—				—				—				—				(129,577	)			(129,577	)
Balances - December 31, 2010			5,899,250				5,899				262,342				(100,000	)			(170,133	)			(1,892	)
Unearned capital amortized			—				—				—				100,000				—				100,000
Additional capital brought in			—				—				33,201				—				—				33,201
Net loss for period ended December 31, 2011			—				—				—				—				(131,720	)			(131,720	)
Balances - December 31, 2011			5,899,250				5,899				295,543				—				(301,853	)			(411	)
Net loss for period ended December 31, 2012			—				—				—				—				(7,428	)			(7,428	)
Balances - December 31, 2012			5,899,250				5,899				295,543				—				(309,281	)			(7,839	)
Net loss for period ended June 30, 2013			—				—				—				—				(4,850	)			(4,850	)
Balances - June 30, 2013			5,899,250			$	5,899				295,543			$	—			$	(314,131	)		$	(12,689	)
The accompanying notes are an integral part of these financial statements.

 

 

Credex Corp
(A Development Stage Company)
STATEMENTS OF CASH FLOWS (Unaudited)
For the Six Months ended June 30, 2013 and 2012
For Periods from Inception (September 2, 2005) to June 30, 2013
										Cumulative from
		Six Months Ended June 30								Inception (September 2, 2005) to June 30
		2013				2012				2013
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss for the period		$	(4850	)		$	(6278	)		$	(314131	)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of stock issued for services			0				0				200000
CHANGES TO ASSETS AND LIABILITIES
(Increase) decrease in prepaid expenses			2000				0				0
Increase (decrease) in accounts payable			2850				6239				4989
NET CASH USED BY OPERATING ACTIVITIES			0				(39	)			(109142	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from stockholder loan			0				0				46201
Repayments of stockholder loan			0				0				(5300	)
Proceeds fron notes payable			0				0				5000
Repayments of notes payable			0				0				(5000	)
Proceeds from sale of common stock			0				0				68241
			0				0
NET CASH PROVIDED BY FINANCING ACTIVITIES			0				0				109142
NET INCREASE (DECREASE) IN CASH			0				(39	)			0
Cash and Cash Equivalents - Beginning			0				39				0
Cash and Cash Equivalents - Ending		$	0			$	0			$	0
The accompanying notes are an integral part of these financial statements.

 

 

 

CREDEX CORPORATION

(A Development Stage Company)

NOTES TO THE FINANCIAL STATEMENTS

JUNE 30, 2013

 

NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Organization and Purpose

Credex Corp, (the "Company") was incorporated in the State of Florida on September 2, 2005. The Company is presently engaged in market research regarding the cost and availability of non-performing credit card portfolios including current market prices for the sales of portfolios deemed non-collectable at the time of sale. The Company is exploring avenues for raising capital in order to put its business plan into effect. The Company has a December 31 year-end. The Company’s principal office is in Orange City, Florida.

 

Basis of Presentation

The accompanying financial statements have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X, and, therefore, do include all information and footnotes necessary for a complete presentation of financial position, results of operations, cash flows, and stockholders’ equity in conformity with accounting principles generally accepted in the United States of America. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature.

 

Accounting Basis

The Company uses the accrual basis of accounting and accounting principles generally accepted in the United States of America (“GAAP” accounting).  The Company has adopted a December 31 fiscal year end.

 

Development Stage

The Company is currently a development stage entity as defined under accounting standards, as it continues development activities related to non-performing credit card portfolios. As required for development stage enterprises, the statements of operations, cash flows and changes in stockholder’s equity (deficit) are presented on a cumulative basis from inception.

 

Revenue Recognition

The Company recognizes revenue from purchased non-performing receivables in accordance with accounting standards on the accounting for certain loans or debt securities acquired in a transfer. The Company will use the cost recovery method and recognize income only after it has recovered its carrying value of purchased non-performing receivables. There can be no assurance as to when or if the carrying value will be recovered. Recognition of income using the interest method would be dependent on the Company having the ability to develop reasonable expectations of both the timing and amount of cash flows to be collected. Due to uncertainties related to the expected timing of the collections of older non-performing receivables purchased as a result of the economic environment and the lack of validation of certain account components, the Company determined that it will not have the ability to develop reasonable expectations of timing of cash flows to be collected.

 

Cash and Equivalents

For purposes of the statement of cash flows, the Company considers all highly liquid investments with original maturities of less than three months to be cash equivalents.

 

Financial Instruments

Financial instruments consist of prepaid expenses, accounts payable and shareholder loans. The carrying amount of financial instruments approximates fair value due to short-term maturities and market interest rates.

 

CREDEX CORPORATION

(A Development Stage Company)

NOTES TO THE FINANCIAL STATEMENTS

JUNE 30, 2013

 

NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 

Reclassifications

Certain accounts and financial statement captions in the prior periods have been reclassified to conform to the current period financial statements.

 

Advertising

The Company expenses advertising and promotions costs as they are incurred. Advertising expenses were $0 for the six months ended June 30, 2013 and 2012.

 

Concentrations of Credit Risk

The Company maintains its cash in bank deposit accounts, the balances of which at times may exceed federally insured limits. The Company continually monitors its banking relationships and consequently has not experienced any losses in such accounts. The Company believes it is not exposed to any significant credit risk on cash and cash equivalents.

 

Earnings per Share

Basic earnings per share is computed by dividing net income available to common stockholders by the weighted average number of common stock shares outstanding during the year. Diluted EPS is computed by dividing net income available to common stockholders by the weighted average number of common stock shares outstanding during the year plus potential dilutive instruments such as stock options and warrants. The Company has no dilutive instruments outstanding.

 

Income Taxes

The Company follows Section 740-10-30 of the FASB Accounting Standards Codification, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns.

 

Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the Statements of Operations in the period that includes the enactment date.

 

The Company adopted section 740-10-25 of the Codification ("Section 740-10-25") which addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Section 740-10-25 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. The Company had no material adjustments to its liabilities for unrecognized income tax benefits according to the provisions of Section 740-10-25.

  

CREDEX CORPORATION

(A Development Stage Company)

NOTES TO THE FINANCIAL STATEMENTS

JUNE 30, 2013

 

NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 

Stock-Based Compensation

Stock-based compensation is accounted for at fair value in accordance with ASC Topic 718. To date, the Company has not adopted a stock option plan and has not granted any stock options.

 

Dividends

The Company has not adopted any policy regarding payment of dividends. No dividends have been paid during any of the periods shown.

 

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

Comprehensive Income

The Company has which established standards for reporting and display of comprehensive income, its components and accumulated balances. When applicable, the Company would disclose this information on its Statement of Stockholders’ Equity. Comprehensive income comprises equity except those resulting from investments by owners and distributions to owners. The Company has not had any significant transactions that are required to be reported in other comprehensive income.

 

Recent Accounting Pronouncements

Credex 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.

 

NOTE B – 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 its ability to continue as a going concern. The Company is in the development stage and has sustained losses of $314,131 since inception. The ability of the Company to continue as a going concern is dependent upon expanding operations and obtaining additional capital and financing. Management’s plan in this regard is to implement the Company’s business plan and to secure additional funds through equity or debt financing. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

 

CREDEX CORPORATION

(A Development Stage Company)

NOTES TO THE FINANCIAL STATEMENTS

JUNE 30, 2013

 

 

NOTE C – STOCKHOLDER LOANS PAYABLE

 

During the year ended December 31, 2012, the Company received loans from a shareholder totaling $7,700. The loans are unsecured, non-interest bearing and due on demand. The balance due to the shareholder was $7,700 as of June 30, 2013.

 

NOTE D – CAPITAL STOCK

 

At inception on September 2, 2005, the Company was authorized to have outstanding 10,000 shares of common stock at $0.10 par value per share. On October 24, 2007, the Company amended its Articles of Incorporation to increase the maximum number of authorized common shares to 100,000,000 and changed the par value to $0.001 per share, which has been retro-actively restated to $0.001 in the accompanying financial statements.

 

Share transactions during the year ended December 31, 2010, resulted in an increase in shares outstanding of 2,333,750 shares as follows:

 

Shares issued for cash at $0.02 per share			267,500
Shares issued for cash at $0.04 per share			566,250
Shares issued for future services at $0.113 per share			1,500,000
			2,333,750

 

During the year ended December 31, 2011, shareholders of the Company agreed to forgive $33,201 of debt. The amount was recorded as contributed capital.

 

There were no shares of common stock issued during the period ended June 30, 2013.

 

As of June 30, 2013, there were 5,899,250 shares of common stock issued and outstanding.

 

NOTE E – COMMITMENTS

 

The Company neither owns nor leases any real or personal property. An officer has provided office services without charge. There is no obligation for the officer to continue this arrangement. Such costs are immaterial to the financial statements and accordingly are not reflected herein. The officers and directors are involved in other business activities and most likely will become involved in other business activities in the future.

 

NOTE F – INCOME TAXES

 

For the periods ended June 30, 2013, the Company has incurred net losses and, therefore, has no tax liability. The net deferred tax asset generated by the loss carry-forward has been fully reserved. The cumulative net operating loss carry-forward is approximately $314,131 at June 30, 2013, and will expire beginning in the year 2025.

 

 

 

CREDEX CORPORATION

(A Development Stage Company)

NOTES TO THE FINANCIAL STATEMENTS

JUNE 30, 2013

 

NOTE F – INCOME TAXES (CONTINUED) 

 

The provision for Federal income tax consists of the following for the six months ended June 30, 2013 and 2012:

 

		2013				2012
Federal income tax benefit attributable to:
Current Operations		$	1,649			$	2,345
Less: valuation allowance			(1,649	)			(2,345	)
Net provision for Federal income taxes		$	0			$	0

 

 

The cumulative tax effect at the expected rate of 34% of significant items comprising our net deferred tax amount is as follows as of June 30, 2013 and December 31, 2012:

 

		June 30, 2013				December 31, 2012
Deferred tax asset attributable to:
Net operating loss carryover		$	106,805			$	105,156
Less: valuation allowance			(106,805	)			(105,156	)
Net deferred tax asset		$	0			$	0

 

Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards of approximately $314,131 for Federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur net operating loss carry forwards may be limited as to use in future years.

 

NOTE G - RELATED PARTY TRANSACTIONS

 

A shareholder of the Company, Globex Transfer, LLC, a stock transfer agent, was engaged in November 2010 to provide stock transfer services. As of June 30, 2013, expenses towards stock transfer agent fee of $400 were included in the outstanding balance payable of $4,989. As of June 30, 2013, $7,700 was due to Service Merchant Corp, a related party who has paid for audit fees and professional fees for the year 2012.

 

During the year ended December 31, 2012, the Company received loans from a shareholder totaling $7,700. The loans are unsecured, non-interest bearing and due on demand. The balance due to the shareholder was $7,700 as of June 30, 2013.

 

CREDEX CORPORATION

(A Development Stage Company)

NOTES TO THE FINANCIAL STATEMENTS

JUNE 30, 2013

 

NOTE H – SUBSEQUENT EVENTS

 

In accordance with ASC 855-10, the Company has analyzed its operations subsequent to June 30, 2013 to the date these financial statements were issued, and has determined that it does not have any material subsequent events to disclose in these financial statements.

 

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

 

The following discussion of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes, and other financial information contained in this filing.

 

Overview

 

We are a development stage company. Although Credex has not operated pursuant to its business plan, in 2005 Credex purchased a portfolio of defaulted credit card debt to test the feasibility of its business plan. On a trial basis accounts from the portfolio were collected. The remainder of the portfolio was then sold. Our auditors have raised substantial doubt as to our ability to continue as a going concern. We need a minimum of approximately $100,000 during the next 12 months to begin implementation of our business plan.

 

Since our inception, we have devoted our activities to the following:

 

(1) Purchasing a debt portfolio;

 

(2) Obtaining bids from professional collectors to collect the portfolio;

 

(3) Developing contacts from whom to purchase portfolios;

 

(4) Contracting for operational support; and

 

(5) Securing enough capital to carry out these activities.

 

Plan of Operations

 

As discussed above we have not yet operated pursuant to our business plan. We generated no revenue for the three and six months ended June 30, 2013 and 2012.

 

Development stage operating expenditures during the period from inception on September 2, 2005 to June 30, 2013 were $109,142 which consisted primarily of cumulative loss from inception to June 30, 2013 of $314,131 less $200,000 of stock issued for serrvices. Our net loss was $4,850 and $6,278 for the six months ended June30, 2013 and 2012, respectively and $314,131 from inception to June 30, 2013.

 

Liquidity and Capital Resources

 

Our capital resources have been acquired through the sale of shares of our common stock and loans from shareholders and third parties.

 

At June 30, 2013 and December 31, 2012, we had total assets of $0 and $2,000 respectively, consisting of prepaid expenses.

 

At June 30, 2013 and December 31, 2012, our total liabilities were $12,689 and $9,839, respectively consisting primarily of accounts payable and shareholder loans.

 

We anticipate taking the following actions during the next 12 months, assuming we receive the required funding:

 

Continue to look for merger candidates.

 

Cash Requirements

 

We intend to provide funding for our activities, if any, through a combination of the private placement of the company’s equity securities and the public sales of equity securities.

 

We have no agreement, commitment or understanding to secure any funding from any source.

 

Off-Balance Sheet Arrangements

 

We do not have any off balance sheet arrangements.

 

Credex has never been in bankruptcy or receivership.  

 

Office

 

Credex’s executive office is located at 848 Rainbow Blvd, # 2096 Las Vegas, NV 89107. The telephone number is (801) 243-5661

. 

Credex is not operating its business plan until such time as capital is raised for operations. To date its operation has involved only selling stock to meet expenses.

 

PROPOSED BUSINESS

 

The Company intends to purchase portfolios with all rights, title and interest of non-performing accounts receivable (credit card debt) at deeply discounted rates, (approximately 3% or less of face values), outsource the collection process, develop a portfolio of restructured debt and sell the residual portfolio.

 

Non-performing portfolios accumulate in the normal course of operations, when a credit grantor from time to time charges-off from its books, accounts which are delinquent. Because the outstanding balance remains the obligation of the defaulting customer, a group of charged-off accounts (a portfolio) contains a value which can be obtained through various collection techniques. This value or yield is dependent upon several variables such as creditor standards, geographical stratification of the portfolio, age of the charge-offs, stages of internal and external collection efforts, elapsed time since collection was last worked, elapsed time since last activity, past recovery obtained from collection efforts and whether the debt is within the statute of limitations. These portfolios may be acquired at significant discounts of their face value, ranging from $0.01 to $0.07 on the dollar. According to Kaulkin Ginsberg Whitepaper: Operational Efficiency in the ARM Industry dated October 2006, an example shown of a debt buyer purchasing a $100 million portfolio face value of delinquent receivables for 5 cents on the dollar would spend $5 million for the acquisition of the portfolio.

 

Collection of $15 million on the portfolio over the next 5 years shows a 3X return. Because the economy has declined from 2006, the management of the Company believes 10% to 12% return of the face value of the portfolios is a conservative position to have until full operations are attained with experienced personnel. The Company intends to purchase portfolios of Primary, Secondary and Tertiary distressed credit card debt from distressed debt wholesalers and re-sellers because they offer smaller portfolios for sale and re-purchase. These portfolios usually sell for $0.01 to $0.03 per dollar of face value. The prices stated are for 2009. On average, approximately $800,000 of face value defaulted credit card debt can be purchased with $12,000.

 

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

 

Not Applicable to Smaller Reporting Companies.

 

[Intentionally left blank]

 

Item 4. Controls and Procedures.

 

Evaluation of Disclosure Controls and Procedures

 

The Chief Executive Officer and the Chief Financial Officer of the Company handles all aspects of the company. Based upon that evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that the Company’s disclosure controls and procedures were ineffective as of June 30, 2013 due to the Company’s small size and a lack of segregation of duties.

 

Changes in Internal Control Over Financial Reporting

 

There were no changes in the Company's internal control over financial reporting during the quarter ended June 30, 2013 that have materially impacted, or are reasonably likely to materially impact, the Company’s internal control over financial reporting.

 

Management's Annual Report on Internal Control Over Financial Reporting

 

Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934).  Internal control over financial reporting is a process designed by, or under the supervision of the Company’s Chief Executive Officer and the Chief Financial Officer and implemented by the Company’s Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles in the United States of America (“GAAP”).

 

The Company’s internal control over financial reporting includes those policies and procedures that:  i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of the Company are made only in accordance with authorizations of management and directors of the Company; and iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material impact on the financial statements.

 

The Company’s management, including the Chief Executive Officer and the Chief Financial Officer, does not expect that the Company’s disclosure controls and procedures, or the Company’s internal controls over financial reporting, will necessarily prevent all fraud and material errors. An internal control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations on all internal control systems, the Company’s internal control system can provide only reasonable assurance of achieving its objectives and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of internal control is also based in part upon certain assumptions about the likelihood of future events, and can provide only reasonable, not absolute, assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in circumstances, or because the degree of compliance with the policies and procedures may deteriorate.

 

Management of the Company, including the Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of the Company's internal control over financial reporting as of June 30, 2013 and determined that controls are ineffective due to the Company’s small size and lack of segregation of duties.

 

This report does not include an attestation report by our registered public accounting firm regarding internal control over financial reporting.  Management’s report was not subject to attestation by our registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit us to provide only our management report in this report.

 

PART II.  OTHER INFORMATION

 

Item 1.  Legal Proceedings.

 

Credex is not involved in any litigation or any material legal proceeding.  No Officer or Director is involved in any litigation or any material legal proceeding.

 

Item 1A. RISK FACTORS

 

THE SHARES ARE HIGHLY SPECULATIVE, INVOLVE A HIGH DEGREE OF RISK AND SHOULD BE PURCHASED ONLY BY PERSONS WHO CAN AFFORD TO LOSE THEIR ENTIRE INVESTMENT. PROSPECTIVE INVESTORS IN THE SHARES SHOULD CAREFULLY CONSIDER THE FOLLOWING RISK FACTORS IN ADDITION TO THE OTHER INFORMATION CONTAINED IN THIS PROSPECTUS.

 

BECAUSE CREDEX LACKS OPERATING HISTORY, IT POSSIBILY MAY GO OUT OF BUSINESS.

 

New ventures are inherently more risky than seasoned operating ventures. Although Credex has not operated pursuant to its business plan, in 2005 Credex purchased a portfolio of defaulted credit card debt to test the feasibility of its business plan. On a trial basis accounts from the portfolio were collected. The remainder of the portfolio was then sold. These transactions are shown in the statement of operation in Item 1(Part I).

 

BECAUSE CREDEX IS A DEVELOPMENT STAGE COMPANY, IT POSSIBLY MAY GO OUT OF BUSINESS.

 

Credex is a development stage company. The Company will be reliant upon additional funding of $250,000 during the next twelve (12) months to initiate its business. This money may not be raised.

 

IF IT IS NOT SUCCESSFUL IN SELLING ITS SHARES, WHEN OFFERED, CREDEX MAY GO OUT OF BUSINESS.

 

When it offers its shares for sale to the public, Credex may be unsuccessful because it has no operations, it has no public market for its shares, and it has not implemented its business plan .

 

IF CREDEX DOES NOT ATTAIN ITS GOALS FOR GROWTH, THE COMPANY MAY GO OUT OF BUSINESS.

 

Credex has not implemented its business plan, has not hired needed key personnel, and has not obtained the required funding for implementation of planned operations. Because of these factors, Credex may not achieve its business goal for growth.

 

BECAUSE OF UNCERTAINTY OF SIGNIFICANT ASSUMPTIONS FOR FUNDING FROM STOCK SALES NOT HAPPENING, CREDEX MAY GO OUT OF BUSINESS.

 

Credex is a development stage company. The Company will be reliant upon additional funding of $250,000 during the next twelve (12) months to initiate its business. This money may not be raised.

 

The Company’s plans for financing and implementing its planned business operations and the projection of the Company’s potential for profitability from its intended operations are based on the experience, judgment and certain assumptions of management and upon certain available information concerning availability of non-performing credit card debt. Funds anticipated through stock sales may not be realized. The Company’s plans are based on the following assumptions: That all or any Shares in future offerings will be sold; that the Company will be successful in adhering to its planned formula for growth; and that sales will reach a minimum level to allow profitability. The Risk is that this money may not be raised.

 

THE COMPETITION FACED BY CREDEX MAY CAUSE CREDEX NOT TO ATTAIN ITS GROWTH PLANS RESULTING IT GOING OUT OF BUSINESS.

 

Competitors of the Company include traditional consumer debt buyers and sellers such as Portfolio Recovery Associates, Collins Financial Services, Inc., Oliphant Financial Corp., US Credit Corp., and many other financial institutions. Competitors have an advantage over the Company primarily due to the fact that they have more funds to invest in portfolio purchases. These competitors also have lengthy profitable operating histories.

 

BECAUSE OF UNCERTAINTY OF ADEQUACY OF FINANCIAL RESOURCES FROM PROFITABLE OPERATIONS, CREDEX MAY GO OUT OF BUSINESS.

 

Credex is a development stage company. The Company will be reliant upon additional funding of $250,000 during the next twelve (12) months to initiate its business as set forth in its continuing strategic plan for growth.

 

Credex may not reach profitability from operations because of the competition it faces, funding needed for key personnel and implementation of the planned operations, and meeting of its milestones in the next twelve months.

 

BECAUSE OF DEPENDENCE ON KEY PERSONNEL, CREDEX MAY GO OUT OF BUSINESS.

The Company has been significantly dependent on the services of Russell Heaton, President/CEO. In the future, the Company will be dependent upon services and outside consultants in distressed debt purchasing, managing and re-selling and any future employees of the Company for the continued development of the Company’s services.

 

POTENTIAL LIABILITY AND INSURANCE COSTS MAY CAUSE CREDEX TO GO OUT OF BUSINESS.

 

As with all businesses operating in today’s somewhat litigious atmosphere, the Company’s intended operations could expose it to a risk of liability for legal damages arising out of its operations. The Company intends to carry acceptable levels of liability insurance for its industry.

 

BECAUSE OF NO HISTORICAL BASIS FOR MANAGEMENT’S OPINION, EVALUATION OF CREDEX IS DIFFICULT.

 

Although all of the Company’s Officers, Directors, and its management team have experience in and have been involved in the daily operations of the Company, which to this point have involved almost exclusively the securing of capital so the Company can execute its business plan. There is no basis, other than the judgment of the Company’s management, on which to estimate, (i) the level of market acceptance or the amount of revenues which the Company’s planned operations may generate, or (ii) other aspects of the Company’s proposed operations.

 

NO TRADING HISTORY OF COMMON STOCK MAKES STOCK TRADING PRICE IF ANY NOT POSSIBLE TO ESTIMATE.

 

The Company’s Common Shares have not been traded publicly. Recent history has shown that the market price of Common Stock fluctuates substantially due to a variety of factors, including market perception of a company’s ability to achieve its planned growth, quarterly operating results of the Company or other similar companies, the trading volume in the Company’s Common Stock, changes in, general conditions in the economy or other developments affecting the Company or its competitors. In addition, the stock market is subject to extreme price and volume fluctuations. Volatility has had a significant effect on the market prices of securities issued by many companies for reasons unrelated to the operating performance of these companies.

 

BECAUSE CREDEX HAS NOT COMMENCED PLANNED OPERATIONS, WHICH MUST BE PROFITABLE FOR DIVIDEND PAYMENTS, DIVIDENDS CANNOT BE ESTIMATED OR PAID.

 

No dividends have been paid on the Shares and the Company does not anticipate the payment of cash dividends in the foreseeable future. If the operations of the Company become profitable, it is anticipated that, for the foreseeable future, any income received would be devoted to the Company’s future operations and that cash dividends would not be paid to the Company’s Shareholders.

(See "Business - Dividend Policy.")

 

BECAUSE OF LACK OF MANAGEMENT EXPERIENCE NEEDED FOR PLANNED OPERATIONS, CREDEX MAY GO OUT OF BUSINESS.

 

Mr. Russell Heaton, the Company’s CEO, has experience managing and operating a public company. Failure to comply or adequately comply with any laws, rules, or regulations applicable to our business may result in fines or regulatory actions which may materially adversely affect our business, results of operation, or financial condition and could result in delays in the development of an active and liquid trading market for our stock.

 

IF WE FAIL TO MAINTAIN AN EFFECTIVE SYSTEM OF INTERNAL CONTROL OVER FINANCIAL REPORTING, OUR ABILITY TO ACCURATELY AND TIMELY REPORT OUR FINANCIAL RESULTS OR PREVENT FRAUD MAY BE ADVERSELY AFFECTED AND INVESTOR CONFIDENCE AND THE MARKET PRICE OF OUR COMMON STOCK MAY BE ADVERSELY IMPACTED.

 

Recently, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, which became effective on July 21, 2010, has amended Section 404 of the Sarbanes-Oxley Act of 2002 (the "Act"). The rules adopted by the SEC pursuant to the Act require an annual assessment of our internal control over financial reporting. The SEC extended the compliance dates for non-accelerated filers, as defined by the SEC. Accordingly, we believe that the annual assessment of our internal controls requirement will first apply to our annual report for the 2010 fiscal year. The standards that must be met for management to assess the internal control over financial reporting as effective are new and complex, and require significant documentation, testing and possible remediation to meet the detailed standards. We may encounter problems or delays in completing activities necessary to make an assessment of our internal control over financial reporting. Pursuant to the amended Act, as neither a "large accelerated filer",nor an "accelerated filer", we are exempt from the requirements of Section 404(b) of the Act to obtain an auditor’s report on management’s assessment of the effectiveness of the Company’s internal control over financial reporting. The expense of compliance may prohibit the Company from becoming operational.

 

CREDEX NEEDS FOR ADDITIONAL EMPLOYEES IF SUITABLE EMPLOYEES ARE NOT FOUND CREDEX MAY GO OUT OF BUSINESS.

 

The Company’s future success also depends upon its continuing ability to attract and retain highly qualified personnel. Expansion of the Company’s business and operation will require additional managers and employees with industry experience, and the success of the Company will be highly dependent on the Company’s ability to attract and retain skilled management personnel and other employees. There can be no assurance that the Company will be able to attract or retain highly qualified personnel. Competition for skilled personnel in the construction industry is significant. This competition may make it more difficult and expensive to attract, hire and retain qualified managers and employees.

 

THERE IS LIMITED LIQUIDITY ON THE BULLETIN BOARDS WHICH LIMITS THE POTENTIAL MARKET FOR ITS STOCK.

 

Our stock is quoted on the OTC Bulletin Board or through the Pink Quotation System Bulletin Board. The OTC Bulletin Board is a significantly more limited market than the New York Stock Exchange or NASDAQ system. When fewer shares of a security are being traded on the OTCBB, volatility of prices may increase and price movement may outpace the ability to deliver accurate quote information. Due to lower trading volumes in shares of our Common Stock, there may be a lower likelihood of one’s orders for shares of our Common Stock being executed, and current prices may differ significantly from the price one was quoted at the time of one’s order entry.

 

IN ORDER TO RAISE SUFFICIENT FUNDS TO EXPAND OUR OPERATIONS, WE MAY HAVE TO ISSUE ADDITIONAL SECURITIES AT PRICES WHICH MAY RESULT IN SUBSTANTIAL DILUTION TO OUR SHAREHOLDERS THUS LIMITING THE MARKET FOR OUR STOCK.

 

If we raise additional funds through the sale of equity or convertible debt, our current stockholders’ percentage ownership will be reduced. In addition, these transactions may dilute the value of our common shares outstanding. We may have to issue securities that may have rights, preferences and privileges senior to our common stock. We cannot provide assurance that we will be able to raise additional funds on terms acceptable to us, if at all. If future financing is not available or is not available on acceptable terms, we may not be able to fund our future needs, which would have a material adverse effect on our business plans, prospects, results of operations and financial condition.

 

WE NEED ADDITIONAL CAPITAL TO FUND OUR OPERATIONS. WE MAY NOT BE ABLE TO OBTAIN SUFFICIENT CAPITAL AND MAY BE FORCED TO LIMIT THE SCOPE OF OUR PROPOSED OPERATIONS.

If adequate additional financing is not available on reasonable terms, we may not be able to carry out our corporate strategy and we would be forced to modify our business plans accordingly.

 

In connection with our growth strategies, we may experience increased capital needs and accordingly, we may not have sufficient capital to fund our future operations without additional capital investments. Our capital needs will depend on numerous factors, including (i) our profitability; (ii) the release of competitive products by our competition; (iii) the level of our investment in research and development; and (iv) the amount of our capital expenditures, including acquisitions. We cannot assure you that we will be able to obtain capital in the future to meet our needs.

 

In recent years, the securities markets in the United States have experienced a high level of price and volume volatility, and the market price of securities of many companies have experienced wide fluctuations that have not necessarily been related to the operations, performances, underlying asset values or prospects of such companies. For these reasons, our securities can also be expected to be subject to volatility resulting from purely market forces over which we will have no control. If we need additional funding we will, most likely, seek such funding in the United States and the market fluctuations effect on our stock price could limit our ability to obtain equity financing.

 

IF WE CANNOT OBTAIN ADDITIONAL FUNDING, WE MAY BE REQUIRED TO: (I) LIMIT OUR EXPANSION; (II) LIMIT OUR MARKETING EFFORTS; AND (III) DECREASE OR ELIMINATE CAPITAL EXPENDITURES. SUCH REDUCTIONS COULD MATERIALLY ADVERSELY AFFECT OUR BUSINESS AND OUR ABILITY TO COMPETE.

 

Even if we do find a source of additional capital, we may not be able to negotiate terms and conditions for receiving the additional capital that are favorable to us. Any future capital investments could dilute or otherwise materially and adversely affect the holdings or rights of our existing shareholders. We cannot give you any assurance that any additional financing will be available to us, or if available, will be on terms favorable to us.

 

BECAUSE OF PENNY STOCK REGULATIONS, CREDEX MAY NOT BE ABLE TO INTEREST THE NEEDED BROKER-DEALERS TO MAKE A MARKET FOR ITS SHARES.

 

The stock registered hereby are subject to "Penny Stock" regulations. Broker-dealer practices in connection with transactions in "penny stock" are regulated by certain penny stock rules adopted by the Commission. Penny stocks generally are equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on Nasdaq provided that current price and volume information with respect to transactions in such securities is provided by the exchange or systems) or to other than establish customers or accredited investors. [In general, "accredited investors" are defined as institutions with assets in excess of $5,000,000 or individuals with net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 with their spouses.]

 

The penny stock rules require a broker-dealer, prior to transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized disclosure document that provided information about penny stocks and the risks in penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its sales person in connection with the transaction, and monthly account statements showing the market value of each penny stock held in the customer’s account. In addition, the penny stock rules generally require that prior to a transaction in a penny stock, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for a stock that becomes subject to the penny stock rules. If the Company’s securities become subject to the penny stock rules, investors in the Offering may find it more difficult to sell their securities.

 

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds.

 

The authorized equity of Credex Corp consists of 100 million Shares, $.001 par value per share, of which 5,899,250 Shares are issued and outstanding to officers and directors for cash and services rendered from inception (September 2, 2005) through June 30, 2013.

 

Item 3.  Defaults Upon Senior Securities.

 

None

 

Item 4. Mine Safety Disclosures

 

Not Applicable

 

Item 5.  Other Information.

 

None

 

Item 6. Exhibits

 

Exhibit 31.1	-	Certification of Chief Executive Officer of Credex Corp required by Rule 13a-14(1) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Exhibit 31.2	-	Certification of Chief Financial Officer of Credex Corp required by Rule 13a-14(1) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Exhibit 32.1	-	Certification of Chief Executive Officer of Credex Corp pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and Section 1350 of 18 U.S.C. 63.
Exhibit 32.2	-	Certification of Chief Executive Officer of Credex Corp pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and Section 1350 of 18 U.S.C. 63.

 

 

 

Signatures

 

Pursuant to the requirements of Section 13 or 15(d) 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.

 

Credex Corp

 

 

By:	/s/ Russell Heaton		Date:	August 16, 2013
	Russell Heaton,
	Chief Executive Officer Chief Financial Officer Director