U.S. SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





Form 10-K /A





(Amendment No. 2 )








(Mark One)





x  ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934





For the fiscal year ended June 30, 2011


or





o  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934





Commission File No. 000-52177








KALEX CORP.


(Exact name of registrant as specified in its charter)


______________________________________________





Delaware

13-3305161(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)





330 E 33 rd Street Suite 15M New York, NY 10016


_____________________________________________


(Address of principal executive offices)





212-686-7171


(Registrant’s telephone number, including area code)





_____________________________________________





Securities registered under Section 12(b) of the Exchange Act:





None.





Securities registered under Section 12(g) of the Exchange Act:





Common Stock, $0.01 par value per share


_____________________________________________


(Title of Class)








Check whether the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes   ̈   No  x





Check whether the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. Yes   ̈   No  x







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Check whether the registrant (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 registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes   ̈   No  x





Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-K (§229.405 of this chapter) contained herein, and no disclosure will be contained, to the best of 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. Yes   ̈   No  x





Check whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See 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 Filer
 ̈
Smaller Reporting Company
x(Do not check if a smaller reporting company.)





Check whether the issuer is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes  x   No   ̈





The aggregate market value of the registrant’s Common Stock held by non-affiliates was $103,100, based on the closing price of $0.50 of the Company’s Common stock on June 30, 2011, the last business day of the registrant’s most recently completed fiscal year.





At August 16, 2011, there were 725,200 shares of the registrant’s Common Stock issued and outstanding.














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KALEX CORP.





FORM 10-K





For The Fiscal Year Ended June 30, 2011





TABLE OF CONTENTS








PagePART IItem 1.

Description of Business

5Item 1A.

Risk Factors

8Item 1B.

Unresolved Staff Comments

12Item 2.

Properties

12Item 3.

Legal Proceedings

12Item 4.

Submission of Matters to a Vote of Security Holders

12PART IIItem 5.

Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities

13Item 6.

Selected Financial Data

14Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

14Item 7A.

Quantitative and Qualitative Disclosures about Market Risk

17Item 8.

Financial Statements and Supplementary Data

17Item 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

17Item 9A.

Controls and Procedures

18Item 9B.

Other Information

19PART IIIItem 10.

Directors, Executive Officers and Corporate Governance

19Item 11.

Executive Compensation

22Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

22Item 13.

Certain Relationships and Related Transactions, and Director Independence

23Item 14.

Principal Accounting Fees and Services

23PART IVItem 15.

Exhibits and Financial Statement Schedules

23Signatures

24








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Explanatory Note





This Annual Report on Form 10-K/A amends and restates the Annual Report on Form 10-K filed February 7, 2012 and the Annual Report on Form 10-K/A filed by Kalex Corp. on May 1, 2012.  This Annual Report on Form 10-K/A does not reflect events occurring subsequent to the fiscal year end June 30, 2011, unless otherwise indicated.


Overview
 
 Kalex Corp. (the Company), is filing this Amendment No. 2 to its Annual Report on Form 10-K/A (the “Amendment”) to amend and restate the Company’s previously issued audited financial statements and related financial information as of June 30, 2011, which was originally filed with the Securities and Exchange Commission on February 7, 2012 and amended on May 1, 2012.  As described below and in Note 6 to the financial statements, the restatement adjusts the Company’s accounting for certain assets that the Company no longer owns.
 
 Background
 
 On July 12, 2012, the Company and American Marketing Complex Int’l Inc. (“AMCI”) entered into a rescission agreement (the “Rescission”) whereby the Company and AMCI agreed to declare null and void and of no force and effect, that certain stock agreement dated July 12, 2010 (the “Agreement”).  The Rescission was intended to void, ab initio, the Agreement, treating the Agreement as invalid from the outset.  Accordingly, both the Company and AMCI mutually agreed to release each other of all respective obligations under the Agreement.  As a result of the Recession, the Company was released of its obligation to issue up to 60,000,000 shares of the Company’s common stock to AMCI and AMCI was released of its obligation to provide the Company with $15,000,000 worth of cash equivalent media credits.
 
 As a result of the Rescission the Company’s President concluded that the previously issued financial statements contained in the Company’s Quarterly Reports on Form 10-Q (“Quarterly Reports”) for the periods ended September 30, 2010, December 31, 2010 and March 31, 2011 and the Company’s Annual Report on Form 10-K (“Annual Report”) for the periods ended June 30, 2011 could no longer be relied upon because of the treatment of the Agreement as invalid from the outset.  The Company hereby restates the financial statements contained in the Annual Report in order to make the necessary accounting adjustments.
 
 The Company has discussed with Labrozzi & Co., PA, the Company’s independent registered public accounting firm, the effects of the Agreement and the adjustments made herein.
 
 Effects of Restatement
 
 The tables below present the effect of the financial statement adjustments related to the restatement of our previously reported financial statements as of and for the fiscal year ended June 30, 2011.  The effect of the restatement on the consolidated balance sheet as of June 30, 2011 is as follows:


June 30, 2011

As Reported


Adjustments


As RestatedASSETSCash and cash equivalents

$
555


$
-


$
555Prepaid advertising – media credits


15,000,000



(15,000,000
)


-TOTAL ASSETS

$
15,000,555






$
555LIABILITIES AND DEFICIENCY IN ASSETSDue to affiliates

$
34,700


$
-


$
34,700Derivative liability


15,000,000



(15,000,000
)


-TOTAL LIABILITIES

$
34,700


$
-


$
34,700


Consistent with the information above, the Company has revised the following items in this Form 10-K/A:
 
 Part II
 Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations
  Part III
 Item 12 - Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
 
 Part I  V
 Item 15 – Financial Statements, including Notes 4 and 6 to the Financial Statements
 
 Additionally, in this Amendment, the Company is including currently dated certifications from the Company’s Principal Executive Officer and Principal Financial Officer as required by Section 302 of the Sarbanes-Oxley Act of 2002 in Exhibits 31.1 and a currently dated certification from the Company’s Principal Executive Officer and Principal Financial Officer as require by Section 906 of the Sarbanes-Oxley Act of 2002 in Exhibit 32.1.
 
 
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FORWARD-LOOKING STATEMENTS





Certain statements made in this Annual Report on Form 10-K are “forward-looking statements” regarding the plans and objectives of management for future operations. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of Kalex Corporation (the “Company”, “we”, “us” or “our”) to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The forward-looking statements included herein are based on current expectations that involve numerous risks and uncertainties. The Company's plans and objectives are based, in part, on assumptions involving the continued expansion of business. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the control of the Company. Although the Company believes its assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, there can be no assurance the forward-looking statements included in this report will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein particularly in view of the current state of our operations, the inclusion of such information should not be regarded as a statement by us or any other person that our objectives and plans will be achieved. Factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements include, but are not limited to, the factors set forth herein under the headings “Description of Business,” “Plan of Operation” and “Risk Factors”. We undertake no obligation to revise or update publicly any forward-looking statements for any reason.





PART I





Item 1.
Description of Business.





KALEX CORP. (“we”, “us”, “our”, the “Company” or the “Registrant”) was incorporated in the State of Delaware on May 1, 1984. The Company was initially organized under the name "PENNATE CORP."  On January 2, 1996, a Certificate of Amendment of Certificate of Incorporation was filed with the State of Delaware changing the Company's name to "KALEX CORP."  During the past five years the Company was not actively engaged in any business.The Company’s present business purpose seeks the acquisition of, or merger with, an existing operating business. The Company has conducted negotiations but has not entered into an agreement or letter of intent concerning any target business.





The Company, based on proposed business activities, is a "blank check" company. The SEC defines those companies as "any development stage company that is issuing a penny stock, within the meaning of Section 3 (a)(51) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and that has no specific business plan or purpose, or has indicated that its business plan is to merge with an unidentified company or companies." Under SEC Rule 12b-2 under the Securities Act of 1933, as amended (the “Securities Act”), the Company also qualifies as a “shell company,” because it has no or nominal assets (other than cash) and no or nominal operations. Many states have enacted statutes, rules and regulations limiting the sale of securities of "blank check" companies in their respective jurisdictions. Management does not intend to undertake any efforts to cause a market to develop in our securities, either debt or equity, until we have successfully concluded a business combination. The Company intends to comply with the periodic reporting requirements of the Exchange Act for so long as we are subject to those requirements.





The Company seeks to investigate and, if such investigation warrants, acquire a target company or business seeking the perceived advantages of being a publicly held corporation. The Company’s principal business objective for the next 12 months and beyond such time will be to achieve long-term growth potential through a combination with a business rather than immediate, short-term earnings. The Company will not restrict its potential candidate target companies to any specific business, industry or geographical location and, thus, may acquire any type of business.





The analysis of new business opportunities will be undertaken by or under the supervision of Norman King, the Chairman of the Board of Directors and CEO of the Company.  As of this date, the Company has not entered into any definitive agreement with any party, nor have there been any specific discussions with any potential business combination candidate regarding business opportunities for the Company.  The Company has unrestricted flexibility in seeking, analyzing and participating in potential business opportunities. In its efforts to analyze potential acquisition targets, the Company will consider the following kinds of factors:







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(a)           Potential for growth, indicated by new technology, anticipated market expansion or new products;





(b)           Competitive position as compared to other firms of similar size and experience within the industry segment as well as within the industry as a whole;





(c)           Strength and diversity of management, either in place or scheduled for recruitment;





(d)           Capital requirements and anticipated availability of required funds, to be provided by the Company or from operations, through the sale of additional securities, through joint ventures or similar arrangements or from other sources;





(e)           The cost of participation by the Company as compared to the perceived tangible and intangible values and potentials;





(f)           The extent to which the business opportunity can be advanced;





(g)           The accessibility of required management expertise, personnel, raw materials, services, professional assistance and other required items; and





(h)           Other relevant factors.





In applying the foregoing criteria, no one of which will be controlling, management will attempt to analyze all factors and circumstances and make a determination based upon reasonable investigative measures and available data. Potentially available business opportunities 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. Due to the Company's limited capital available for investigation, the Company may not discover or adequately evaluate adverse facts about the opportunity to be acquired.





Form of Acquisition





The manner in which the Company participates in an opportunity will depend upon the nature of the opportunity, the respective needs and desires of the Company and the promoters of the opportunity, and the relative negotiating strength of the Company and such promoters.





It is likely that the Company will acquire its participation in a business opportunity through the issuance of common stock or other securities of the Company. Although the terms of any such transaction cannot be predicted, it should be noted that in certain circumstances the criteria for determining whether or not an acquisition is a so-called "tax free" reorganization under Section 368(a)(1) of the Internal Revenue Code of 1986, as amended (the "Code"), depends upon whether the owners of the acquired business own 80% or more of the voting stock of the surviving entity. If a transaction were structured to take advantage of these provisions rather than other "tax free" provisions provided under the Code, all prior stockholders would in such circumstances retain 20% or less of the total issued and outstanding shares of the surviving entity. Under other circumstances, depending upon the relative negotiating strength of the parties, prior stockholders may retain substantially less than 20% of the total issued and outstanding shares of the surviving entity. This could result in substantial additional dilution to the equity of those who were stockholders of the Company prior to such reorganization.





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The stockholders of the Company will likely not have control of a majority of the voting securities of the Company following a reorganization transaction. As part of such a transaction, the Company's directors may resign and one or more new directors may be appointed without any vote by stockholders.





In the case of an acquisition, the transaction may be accomplished upon the sole determination of management without any vote or approval by stockholders. In the case of a statutory merger or consolidation directly involving the Company, it will likely be necessary to call a stockholders' meeting and obtain the approval of the holders of a majority of the outstanding securities. The necessity to obtain such stockholder approval may result in delay and additional expense in the consummation of any proposed transaction and will also give rise to certain appraisal rights to dissenting stockholders. Most likely, management will seek to structure any such transaction so as not to require stockholder approval.





It is anticipated that the investigation of specific business opportunities and the negotiation, drafting and execution of relevant agreements, disclosure documents and other instruments will require substantial management time and attention and substantial cost for accountants, attorneys and others. If a decision is made not to participate in a specific business opportunity, the costs incurred in the related investigation might not be recoverable. Furthermore, even if an agreement is reached for the participation in a specific business opportunity, the failure to consummate that transaction may result in the loss to the Company of the related costs incurred.





Competition





Our primary goal is the acquisition of a target company or business seeking the perceived advantages of being a publicly held corporation. The Company faces vast competition from other shell companies with the same objectives. The Company is in a highly competitive market for a small number of business opportunities which could reduce the likelihood of consummating a successful business combination. A large number of established and well-financed entities, including small public companies and venture capital firms, are active in mergers and acquisitions of companies that may be desirable target candidates for us. Nearly all these entities have significantly greater financial resources, technical expertise and managerial capabilities than we do; consequently, we will be at a competitive disadvantage in identifying possible business opportunities and successfully completing a business combination. These competitive factors may reduce the likelihood of our identifying and consummating a successful business combination.





Patents and Trademarks





We currently do not own any patents, trademarks or licenses of any kind.





Government Regulations





There are no government approvals necessary to conduct our current business.





Recent Events





Amendments to Articles of Incorporation or Bylaws





On March 16, 2011, the Company filed a Certificate of Correction (the “Correction”) to rectify an inadvertent omission of language in the Certificate of Amendment to Certificate of Incorporation filed on December 1, 2010 (the “Amendment”).  The omitted language, which was in the Certificate of Incorporation prior to the Amendment provides the Board of Directors the power to designate and fix the powers, preferences and rights and the qualifications, limitations or restrictions of any number of series of preferred stock.  By filing the Correction the language giving the Board of Directors the power to designate was added back to the Certificate of Incorporation.





On March 17, 2011, the Company filed a Certificate of Designation (the “Designation”) with the State of Delaware designating 1,000 shares of Series A Convertible Preferred Stock (“Series A Preferred”).  The holders of the Company’s Series A Preferred are not entitled to dividends.  Each share of Series A Preferred may be converted into two hundred thousand shares of Common Stock.  Each share of Series A Preferred are entitled to distributions resulting from liquidation, dissolution or winding up of the Company on an as converted and pro rata basis.  In additions, the holder or holders of the entire class of Series A Preferred, together, have the number of votes equal to the number of shares which is not less than fifty one percent of the vote required to approve any action which Delaware law requires to be approved by vote or consent of the Company’s shareholders.





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On March 15, 2011, the Board of Directors of the Company, subject to filing the Correction and the Designation, authorized and directed the Company to issue 1,000 shares of Series A Preferred (the “Preferred Issuance”) to Norman King, the Company’s Chief Executive Officer and Chairman of the Board of Directors.  The Company’s Board of Director’s authorized the Preferred Issuance after due consideration of the financial and advisory assistance Mr. King provided to the Company over many years.  In making such determination, the Board of Directors noted that Mr. King (i) made various payments, on behalf of the Company, to extinguish fees and expenses incurred by the Company, (ii) provided office space for the Company’s headquarters, (iii) introduced various business opportunities to the Company through his connections, relationships and associations, and (iv) provided extensive efforts to assist the Company in acquiring an operating entity.  On June 20, 2011, the Company issued the 1,000 shares of Series A Preferred to Mr. King.





Employees





We presently have no employees apart from our management. Our officers and directors are engaged in outside business activities and anticipate that they will devote to our business very limited time until the acquisition of a successful business opportunity has been identified. We expect no significant changes in the number of our employees other than such changes, if any, incident to a business combination.





Item 1A.
Risk Factors.





An investment in the Company is highly speculative in nature and involves an extremely high degree of risk.There may be conflicts of interest between our management and our non-management stockholders.





Conflicts of interest create the risk that management may have an incentive to act adversely to the interests of other investors. A conflict of interest may arise between our management's personal pecuniary interest and its fiduciary duty to our stockholders. Further, our management's own pecuniary interest may at some point compromise its fiduciary duty to our stockholders. In addition, our management may be involved with other blank check companies and conflicts in the pursuit of business combinations with such other blank check companies with which they and other members of our management are, and may be the future be, affiliated with may arise. If we and the other blank check companies that our officers and directors are affiliated with desire to take advantage of the same opportunity, then those officers and directors that are affiliated with both companies would abstain from voting upon the opportunity.





Our business is difficult to evaluate because we have limited operating history.





After the Company’s business was transferred to its parent Victor Kellering, Inc. the Company has no operating history or revenue and only minimal assets.  Accordingly, there is a risk that we will be unable to continue as a going concern and consummate a business combination. We have no significant assets or financial resources. We will, in all likelihood, sustain operating expenses without corresponding revenues, at least until the consummation of a business combination. This may result in our incurring a net operating loss that will increase continuously until we can consummate a business combination with a profitable business opportunity. We cannot assure you that we can identify a suitable business opportunity and consummate a business combination.





There is competition for those private companies suitable for a merger transaction of the type contemplated by management.





The Company is in a highly competitive market for a small number of business opportunities which could reduce the likelihood of consummating a successful business combination. We are and will continue to be an insignificant participant in the business of seeking mergers with, joint ventures with and acquisitions of small private and public entities. A large number of established and well-financed entities, including small public companies and venture capital firms, are active in mergers and acquisitions of companies that may be desirable target candidates for us. Nearly all these entities have significantly greater financial resources, technical expertise and managerial capabilities than we do; consequently, we will be at a competitive disadvantage in identifying possible business opportunities and successfully completing a business combination. These competitive factors may reduce the likelihood of our identifying and consummating a successful business combination.





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Future success is highly dependent on the ability of management to locate and attract a suitable acquisition.





The nature of our operations is highly speculative and there is a consequent risk of loss of your investment. The success of our plan of operation will depend to a great extent on the operations, financial condition and management of the identified business opportunity. While management intends to seek business combination(s) with entities having established operating histories, we cannot assure you that we will be successful in locating candidates meeting that criterion. In the event we complete a business combination, the success of our operations may be dependent upon management of the successor firm or venture partner firm and numerous other factors beyond our control.





The Company has no existing agreement for a business combination or other transaction.





No assurances can be given that we will successfully identify and evaluate suitable business opportunities or that we will conclude a business combination. We cannot guarantee that we will be able to negotiate a business combination on favorable terms, and there is consequently a risk that funds allocated to the purchase of our shares will not be invested in a company with active business operations.





Management intends to devote only a limited amount of time to seeking a target company which may adversely impact our ability to identify a suitable acquisition candidate.





While seeking a business combination, management anticipates devoting no more than a few hours per week to the Company's affairs in total. Our officers have not entered into a written employment agreement with us and are not expected to do so in the foreseeable future. This limited commitment may adversely impact our ability to identify and consummate a successful business combination.





The time and cost of preparing a private company to become a public reporting company may preclude us from entering into a merger or acquisition with the most attractive private companies.





Target companies that fail to comply with SEC reporting requirements may delay or preclude acquisition. Sections 13 and 15(d) of the Exchange Act require reporting companies to provide certain information about significant acquisitions, including certified financial statements for the company acquired, covering one, two, or three years, depending on the relative size of the acquisition. The time and additional costs that may be incurred by some target entities to prepare these statements may significantly delay or essentially preclude consummation of an acquisition. Otherwise suitable acquisition prospects that do not have or are unable to obtain the required audited statements may be inappropriate for acquisition so long as the reporting requirements of the Exchange Act are applicable.





The Company may be subject to further government regulation which would adversely affect our operations.





Although we will be subject to the reporting requirements under the Exchange Act, management believes we will not be subject to regulation under the Investment Company Act of 1940, as amended (the “Investment Company Act”), since we will not be engaged in the business of investing or trading in securities. If we engage in business combinations which result in our holding passive investment interests in a number of entities, we could be subject to regulation under the Investment Company Act. If so, we would be required to register as an investment company and could be expected to incur significant registration and compliance costs. We have obtained no formal determination from the SEC as to our status under the Investment Company Act and, consequently, violation of the Investment Company Act could subject us to material adverse consequences.





Any potential acquisition or merger with a foreign company may subject us to additional risks.





If we enter into a business combination with a foreign concern, we will be subject to risks inherent in business operations outside of the United States. These risks include, for example, currency fluctuations, regulatory problems, punitive tariffs, unstable local tax policies, trade embargoes, risks related to shipment of raw materials and finished goods across national borders and cultural and language differences. Foreign economies may differ favorably or unfavorably from the United States economy in growth of gross national product, rate of inflation, market development, rate of savings, and capital investment, resource self-sufficiency and balance of payments positions, and in other respects.








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As a result of the delay in completing our financial statements, we are currently unable to register securities with the SEC, which may adversely affect our ability to raise, and the cost of raising, future capital.





As a result of the delay in completing our financial statements, we have been and remain unable to register securities for sale by us or for resale by other security holders, which has adversely affected our ability to raise capital. Additionally, following the filing of our Quarterly Reports on Form 10-Q for the quarter ended December 31, 2011, we will remain ineligible to use Form S-3 to register securities until we have timely filed all periodic reports under the Exchange Act for at least 12 calendar months.  In the meantime, we would need to use Form S-1 to register securities with the SEC for capital raising transactions or issue such securities in private placements, in either case, increasing the costs of raising capital during that period.





We have never paid dividends on our common stock.





We have never paid dividends on our common stock and do not presently intend to pay any dividends in the foreseeable future. We anticipate that any funds available for payment of dividends will be re-invested into the Company to further its business strategy.





The Company may be subject to certain tax consequences in our business, which may increase our cost of doing business.





We may not be able to structure our acquisition to result in tax-free treatment for the companies or their stockholders, which could deter third parties from entering into certain business combinations with us or result in being taxed on consideration received in a transaction. Currently, a transaction may be structured so as to result in tax-free treatment to both companies, as prescribed by various federal and state tax provisions. We intend to structure any business combination so as to minimize the federal and state tax consequences to both us and the target entity; however, we cannot guarantee that the business combination will meet the statutory requirements of a tax-free reorganization or that the parties will obtain the intended tax-free treatment upon a transfer of stock or assets. A non-qualifying reorganization could result in the imposition of both federal and state taxes that may have an adverse effect on both parties to the transaction.





Our business will have no revenues unless and until we merge with or acquire an operating business.





We are a development stage company and have had no revenues from operations. We may not realize any revenues unless and until we successfully merge with or acquire an operating business.





The Company intends to issue more shares in a merger or acquisition, which will result in substantial dilution.





Any merger or acquisition effected by us may result in the issuance of additional securities without stockholder approval and may result in substantial dilution in the percentage of our common stock held by our then existing stockholders. Moreover, the common stock issued in any such merger or acquisition transaction may be valued on an arbitrary or non-arm’s-length basis by our management, resulting in an additional reduction in the percentage of common stock held by our then existing stockholders. Our Board of Directors has the power to issue any or all of such authorized but unissued shares without stockholder approval. To the extent that additional shares of common stock or preferred stock are issued in connection with a business combination or otherwise, dilution to the interests of our stockholders will occur and the rights of the holders of common stock might be materially and adversely affected.





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The Company has conducted no market research or identification of business opportunities, which may affect our ability to identify a business to merge with or acquire.





The Company has neither conducted nor have others made available to us results of market research concerning prospective business opportunities. Therefore, we have no assurances that market demand exists for a merger or acquisition as contemplated by us. There is no assurance that we will be able to acquire a business opportunity on terms favorable to us. Decisions as to which business opportunity to participate in will be unilaterally made by our management, which may act without the consent, vote or approval of our stockholders.





Because we may seek to complete a business combination through a “reverse merger”, following such a transaction we may not be able to attract the attention of major brokerage firms.





Additional risks may exist since we will assist a privately held business to become public through a “reverse merger.” Securities analysts of major brokerage firms may not provide coverage of our Company since there is no incentive to brokerage firms to recommend the purchase of our common stock. No assurance can be given that brokerage firms will want to conduct any secondary offerings on behalf of our post-merger company in the future.





We cannot assure you that following a business combination with an operating business, our common stock will be listed on NASDAQ or any other securities exchange.





Following a business combination, we may seek the listing of our common stock on NASDAQ or the NYSE, or Amex. However, we cannot assure you that following such a transaction, we will be able to meet the initial listing standards of either of those or any other stock exchange, or that we will be able to maintain a listing of our common stock on either of those or any other stock exchange. After completing a business combination, until our common stock is listed on the NASDAQ or another stock exchange, we expect that our common stock would remain eligible to trade on the “pink sheets” or another over-the-counter quotation system such as the OTC Bulletin Board, where our stockholders may find it difficult to dispose of shares or obtain accurate quotations as to the market value of our common stock. In addition, we would be subject to an SEC rule that, if it failed to meet the criteria set forth in such rule, imposes various practice requirements on broker-dealers who sell securities governed by the rule to persons other than established customers and accredited investors. Consequently, such rule may deter broker-dealers from recommending or selling our common stock, which may further affect its liquidity. This would also make it more difficult for us to raise additional capital following a business combination.





Our common stock is quoted on the Pink Sheets and may be traded infrequently and in low volumes,  which may negatively affect your ability to sell your shares at or near the quoted bid prices and may reduce the stock price of your shares.





The shares of our common stock may trade infrequently and in low volumes on the Pink Sheets, meaning that the number of persons interested in purchasing our common shares at or near bid prices at any given time may be relatively small or non-existent. This situation may be attributable to a number of factors, including the fact that we are a small company that is relatively unknown to stock analysts, stock brokers, institutional investors and others in the investment community who can generate or influence sales volume, and that even if we came to the attention of such institutionally oriented persons, they tend to be risk-averse in this environment and would be reluctant to follow an early stage company such as ours or purchase or recommend the purchase of our shares until such time as we became more seasoned and viable. As a consequence, there may be periods of several days or more when trading activity in our shares is minimal or non-existent, as compared to a seasoned issuer which has a large and steady volume of trading activity that will generally support continuous sales without an adverse effect on share price.  We cannot give you any assurance that a broader or more active public trading market for our common shares will develop or be sustained.  Due to these conditions, we can give you no assurance that you will be able to sell your shares at or near bid prices or at all if you need money or otherwise desire to liquidate your shares.  Further, institutional and other investors may have investment guidelines that restrict or prohibit investing in securities traded in the over-the-counter market.  These factors may have an adverse impact on the trading and price of our securities, and could even result in the loss by investors of all or part of their investment.





You may have difficulty selling our shares because they are deemed “penny stocks.”





Since our common stock is not listed on a national securities exchange, if the trading price of our common stock remains below $5.00 per share, trading in our common stock will be subject to the requirements of certain rules promulgated under the Exchange Act, which require additional disclosure by broker-dealers in connection with any trades involving a stock defined as a penny stock (generally, any non-national securities exchange equity security that has a market price of less than $5.00 per share, subject to certain exceptions).  Such rules require the delivery, prior to any penny stock transaction, of a disclosure schedule explaining the penny stock market and the risks associated therewith and impose various sales practice requirements on broker-dealers who sell penny stocks to persons other than established customers and accredited investors (generally defined as an investor with a net worth in excess of $1,000,000 or annual income exceeding $200,000 individually or $300,000 together with a spouse).  For these types of transactions, the broker-dealer must make a special suitability determination for the purchaser and have received the purchaser’s written consent to the transaction prior to the sale.  The broker-dealer also must disclose the commissions payable to the broker-dealer, current bid and offer quotations for the penny stock and, if the broker-dealer is the sole market-maker, the broker-dealer must disclose this fact and the broker-dealer’s presumed control over the market.  Such information must be provided to the customer orally or in writing before or with the written confirmation of trade sent to the customer.  Monthly statements must be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.  The additional burdens imposed upon broker-dealers by such requirements could discourage broker-dealers from effecting transactions in our common stock, which could severely limit the market liquidity of the common stock and the ability of holders of the common stock to sell their shares.







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Liquidity of shares of our common stock is limited.





Our shares of common stock are not registered under the securities laws of any state or other jurisdiction. Further, no active trading market is expected to develop in the foreseeable future unless and until the Company completes a business combination with an operating business and the Company thereafter files a registration statement under the Securities Act. Therefore, outstanding shares of our common stock cannot be offered, sold, pledged or otherwise transferred unless subsequently registered pursuant to, or exempt from registration under, the Securities Act and any other applicable federal or state securities laws or regulations. Shares of our common stock cannot be sold under the exemptions from registration provided by Rule 144 under or Section 4(1) of the Securities Act, in accordance with the letter from Richard K. Wulff, Chief of the Office of Small Business Policy of the Securities and Exchange Commission’s Division of Corporation Finance, to Ken Worm of NASD Regulation, dated January 21, 2000. This letter provides that certain private transfers of the shares of common stock also may be prohibited without registration under federal securities laws. Compliance with the criteria for securing exemptions under federal securities laws and the securities laws of the various states is extremely complex, especially in respect of those exemptions affording flexibility and the elimination of trading restrictions in respect of securities received in exempt transactions and subsequently disposed of without registration under the Securities Act or state securities laws.





We could issue “blank check” preferred stock without stockholder approval with the effect of diluting then current stockholder interests.





Our certificate of incorporation, as amended, authorizes the issuance of up to 2,000 shares of “blank check” preferred stock with designations, rights and preferences as my be determined from time to time by our board of directors.  Accordingly, our Board of Directors is empowered, without stockholder approval, to issue preferred stock with dividend, liquidation, conversion, voting, or other rights which could dilute the interest of and adversely affect the voting power or other rights of the holders of the common stock. In the event of issuance, the preferred stock could be utilized, under certain circumstances, as a method of discouraging, delaying or preventing a change in control of the Company.





Item 1B.
Unresolved Staff Comments.





As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide this information.





Item 2.
Properties.





The Company neither rents nor owns any properties. The Company utilizes the office space and equipment of its management at no cost. Management estimates such amounts to be immaterial.  The Company currently has no policy with respect to investments or interests in real estate, real estate mortgages or securities of, or interests in, persons primarily engaged in real estate activities.





Item 3.
Legal Proceedings.





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.





Item 4.
[Reserved.]










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PART II





Item 5.
Market for Common Equity, Related Stockholder Matters and Small Business Issuer Purchases of Equity Securities.





Market Information





We are presently trading on the “Pink Sheets.”





Penny Stock





The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a market price of less than $5.00, other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock, to deliver a standardized risk disclosure document prepared by the SEC, that: (a) contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading; (b) contains a description of the broker's or dealer's duties to the customer and of the rights and remedies available to the customer with respect to a violation of such duties or other requirements of the securities laws; (c) contains a brief, clear, narrative description of a dealer market, including bid and ask prices for penny stocks and the significance of the spread between the bid and ask price; (d) contains a toll-free telephone number for inquiries on disciplinary actions; (e) defines significant terms in the disclosure document or in the conduct of trading in penny stocks; and (f) contains such other information and is in such form, including language, type size and format, as the SEC shall require by rule or regulation.





The broker-dealer also must provide, prior to effecting any transaction in a penny stock, the customer with (a) bid and offer quotations for the penny stock; (b) the compensation of the broker-dealer and its salesperson in the transaction; (c) the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and (d) a monthly account statement showing the market value of each penny stock held in the customer's account.





In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules, 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 acknowledgment of the receipt of a risk disclosure statement, a written agreement as to transactions involving penny stocks, and a signed and dated copy of a written suitability statement.





These disclosure requirements may have the effect of reducing the trading activity for our common stock. Therefore, stockholders may have difficulty selling our securities.





Holders





As of August 16, 2011, we had 132 stockholders of record.





Dividends





The Company has not paid any cash dividends to date and does not anticipate or contemplate paying dividends in the foreseeable future. It is the present intention of management to utilize all available funds for the development of the Company's business.





Securities Authorized for Issuance under Equity Compensation Plans





The Company does not have any equity compensation plans or any individual compensation arrangements with respect to its Common Stock or Preferred Stock. The issuance of any of our common or preferred stock is within the discretion of our Board of Directors, which has the power to issue any or all of our authorized but unissued shares without stockholder approval.







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Recent Sales of Unregistered Securities





In June 2011, the Company issued 1,000 shares of the Company’s Series A Convertible Preferred Stock, par value of $0.0001 (the “Series A Preferred”), to our Chief Executive Officer and Chairman of the Board of Directors, Norman King (the “Preferred Issuance”).  Each share of the Series A Preferred is convertible into two hundred thousand shares of Common Stock.  The class of 1,000 shares of Series A Preferred has the number of votes equal to that number of common shares which is not less than 51% of the vote required to approve any action .  The Company’s Board of Director’s authorized the Preferred Issuance after due consideration of the financial and advisory assistance Mr. King provided to the Company over many years.  In making such determination, the Board of Directors noted that Mr. King (i) made various payments, on behalf of the Company, to extinguish fees and expenses incurred by the Company, (ii) provided office space for the Company’s headquarters, (iii) introduced various business opportunities to the Company through his connections, relationships and associations, and (iv) provided extensive efforts to assist the Company in acquiring an operating entity.  The Series A Preferred were issued in reliance on the exemption from registration afforded by Section 4(2) under the Securities Act of 1933.





Neither the Registrant nor any person acting on its behalf offered or sold the securities of the Company by means of any form of general solicitation or general advertising.





Issuer Purchases of Equity Securities





None.





Item 6.
Selected Financial Data.





As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide this information.





Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operation.





Forward-Looking Statements





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. The discussion should be read along with our financial statements and notes thereto. The following discussion and analysis contains forward-looking statements, which involve risks and uncertainties. Our actual results may differ significantly from the results, expectations and plans discussed in these forward-looking 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.











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Overview





The Company is currently considered to be a “blank check” company in as much as we have no specific business plans, no operations, revenues or employees. We currently have no definitive agreements or understanding with any prospective business combination candidates and have not targeted any business for investigation and evaluation nor are there any assurances that we will find a suitable business with which to combine. The implementation of our business objectives is wholly contingent upon a business combination and/or the successful sale of securities in the company. We intend to utilize the proceeds of any offering, any sales of equity securities or debt securities, bank and other borrowings or a combination of those sources to effect a business combination with a target business which we believe has significant growth potential. While we may, under certain circumstances, seek to effect business combinations with more than one target business, unless and until additional financing is obtained, we will not have sufficient proceeds remaining after an initial business combination to undertake additional business combinations.





We do not engage in any business activities that provide cash flow.  However, 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.





As a result of our limited resources, we expect to effect only a single business combination. Accordingly, the prospects for our success will be entirely dependent upon the future performance of a single business. Unlike certain entities that have the resources to consummate several business combinations or entities operating in multiple industries or multiple segments of a single industry, we will not have the resources to diversify our operations or benefit from the possible spreading of risks or offsetting of losses. A target business may be dependent upon the development or market acceptance of a single or limited number of products, processes or services, in which case there will be an even higher risk that the target business will not prove to be commercially viable.







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Our officers are only required to devote a very limited portion of their time to our affairs on a part-time or as-needed basis. We expect to use outside consultants, advisors, attorneys and accountants as necessary, none of which will be hired on a retainer basis. We do not anticipate hiring any full-time employees so long as we are seeking and evaluating business opportunities.





Although we intend to scrutinize closely the management of a prospective target business in connection with our evaluation of a business combination with a target business, our assessment of management may be incorrect. We cannot assure you that we will find a suitable business with which to combine.





Results of Operations





The Company has not conducted any active operations since June 30, 2008, except for its efforts to locate a suitable acquisition or merger transaction. No revenue has been generated by the Company during such period, and it is unlikely the Company will have any revenues unless it is able to consummate or effect an acquisition of, or merger with, an operating company, of which there can be no assurance.





Net loss for the years ended June 30, 2010 and 2011 were $4,420 and $1,283 respectively.





Liquidity and Capital Resources





As of June 30, 2011, the Company had assets equal to $555 comprised of cash .  This compares with assets of $1,833 comprised exclusively of cash, as of June 30, 2010.  The Company’s current liabilities as of June 30, 2011 totaled $34,700, comprised of monies due to affiliates.  This compares with liabilities of $34,700, as of June 30, 2010.  The Company can provide no assurance that it can continue to satisfy its cash requirements for at least the next twelve months.











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The following is a summary of the Company's cash flows provided by (used in) operating, investing and financing activities for the years ended June 30, 2011 and 2010:





Fiscal Year Ended

June 30, 2011


Fiscal Year Ended

June 30, 2010Net Cash (Used in) Operating Activities

$
(1,278
)

$
(4,420
)Net Cash (Used in) Investing Activities


-



-Net Cash Provided by Financing Activities

$
-


$
-Net Increase (Decrease) in Cash and Cash Equivalents

$
(1,278)


$
(4,420
)





The Company has nominal assets and has generated no revenues. Our consolidated financial statements as of June 30, 2011 have been prepared under the assumption that we will continue as a going concern.  Our ability to continue as a going concern is dependent upon the Company’s ability to obtain 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.





Management’s plans over the next twelve months with regard to these matters encompass the following actions: (i) continue to search for a business combination that would allow the Company to generate revenues; (ii) continue to rely on certain officers of the Company to provide services, funding and capital resources; and (iii) obtaining funding from new investors to alleviate our working capital deficiency.  Our financial statements do not include any adjustments that might result from the risks and uncertainties in the outcome of management’s plan.





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 from September 24, 2007 to June 30, 2011.  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.





For the fiscal year ended June 30, 2011 the Company had a net loss of $1,278, consisting of legal, accounting, audit, other professional service fees.  For the fiscal year ended June 30, 2010, the Company had a net loss of $4,420, consisting of legal, accounting, audit, and other professional service fees.





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.





Item 7A.
Quantitative and Qualitative Disclosures about Market Risk.





As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide this information.





Item 8.
Financial Statements and Supplementary Data.





See the financial statements annexed to this annual report.





Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.





None





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Item 9A(T).
Controls and Procedures.





Evaluation of Disclosure Controls and Procedures





The Company’s management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) that is designed to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms.  Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.





In accordance with Exchange Act Rules 13a-15 and 15d-15, an evaluation was completed under the supervision and with the participation of the Company’s management, including the Company’s President, Principal Financial Officer and Secretary, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of June 30, 2011.  Based on that evaluation, the Company’ officers concluded that the Company’s disclosure controls and procedures were not effective in providing reasonable assurance that information required to be disclosed in the Company’s reports filed or submitted under the Exchange Act was recorded, processed, summarized, and reported within the time periods specified in the Commission’s rules and forms.





Evaluation of Internal Controls over Financial Reporting





Our management is responsible for establishing and maintaining adequate “internal control over financial reporting”, as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act. Our system of internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external reporting purposes in accordance with GAAP.





Because of its inherent limitations, internal control over financial reporting may not prevent or detect every misstatement. An evaluation of effectiveness is subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with policies or procedures may decrease over time.





Our internal control over financial reporting includes those policies and procedures that (a) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (b) provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (c) provide reasonable assurance regarding prevention or timely detection of unauthorized use, acquisition, or disposition of our assets that could have a material effect on the consolidated financial statements.





Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our internal control over financial reporting as of the year ended June 30, 2011. In making this assessment, we utilized the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control — Integrated Framework.





A material weakness is a deficiency or a combination of deficiencies in internal controls over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. Based upon that evaluation, we concluded that our internal controls over financial reporting were not effective as of June 30, 2011.  Specifically, during our assessment of the effectiveness of internal control over financial reporting as of June 30, 2011, management identified material weaknesses related to the lack of segregation of duties and the need for stronger financial reporting oversight.  Due to the Company’s limited resources, the Company does not have accounting personnel with extensive experience in maintaining books and records and preparing financial statements in accordance with US GAAP.  Additionally, the Company does not have a formal audit committee, and the Board of Directors does not have a financial expert, thus the Company lacks the board oversight role within the financial reporting process.





Our management is in the process of determining how best to change our current system and implement a more effective system of controls and procedures.  However, given limitations in financial and manpower resources, we may not have the resources to address fully the weaknesses in controls.  No assurance can be made at this point that the implementation of such controls and procedures will be completed in a timely manner or that they will be adequate once implemented.











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Changes in Internal Controls over Financial Reporting





There have been no significant changes to the Company’s internal controls over financial reporting since the Company’s last Quarterly Reports on Form 10-Q for the quarter ended March 31, 2011that materially affected, or were reasonably likely to materially affect, our internal controls over financial reporting.





Item 9B.
Other Information.





In June 2011, the Company issued 1,000 shares of the Company’s Series A Convertible Preferred Stock, par value of $0.0001 (the “Series A Preferred”), to our Chief Executive Officer and Chairman of the Board of Directors, Norman King (the “Preferred Issuance”).  Each share of the Series A Preferred is convertible into two hundred thousand shares of Common Stock.  The class of 1,000 shares of Series A Preferred has the number of votes equal to that number of common shares which is not less than 51% of the vote required to approve any action .  The Company’s Board of Director’s authorized the Preferred Issuance after due consideration of the financial and advisory assistance Mr. King provided to the Company over many years.  In making such determination, the Board of Directors noted that Mr. King (i) made various payments, on behalf of the Company, to extinguish fees and expenses incurred by the Company, (ii) provided office space for the Company’s headquarters, (iii) introduced various business opportunities to the Company through his connections, relationships and associations, and (iv) provided extensive efforts to assist the Company in acquiring an operating entity.  The Series A Preferred were issued in reliance on the exemption from registration afforded by Section 4(2) under the Securities Act of 1933.





Neither the Registrant nor any person acting on its behalf offered or sold the securities of the Company by means of any form of general solicitation or general advertising.





PART III





Item 10.
Directors, Executive Officers, Promoters and Control Persons; Compliance With Section 16(a) of the Exchange Act.





(a)           Identification of Directors and Executive Officers.  The following table sets forth certain information regarding the Company’s directors and executive officers as of June 30, 2011:





Name

Age

Position

TermNorman King

86

Chairman and Chief Executive Officer

2010 to PresentArnold F. Sock, Esq.

58

President and Director

2010 to PresentLeonard Issacson

84

Secretary and Chief Financial Officer

2011 to PresentAdam Sietz

41

Assistant Secretary and Director

2010 to PresentInga Lamonica

51

Director, Secretary and Treasurer

1996 to PresentRussell Machover

55

Director

2003 to PresentMubada Gaby Dakwar

47

Director

2010 to PresentNoel Raskin

62

Director

2010 to PresentJohn Jackson

73

Director

2011 to PresentAlbert Solomon

75

Director

2011 to Present





The Company’s officers and directors are elected annually for a one year term or until their respective successors are duly elected and qualified or until their earlier resignation or removal.





Norman King was appointed Chief Executive Officer and Chairman of the board of directors on July 10, 2010. Mr. King was educated at Cornell, New York University and New York University Law School. He is an author of 20 books, all by major publishers. Mr. King invented and created the nation's first media buying service, U.S. Media. Mr. King is a Knight of Malta, a media consultant to the United States Senate, and was selected, for three consecutive years, along with Henry Ford and Ralph Nader, as one of America's 10 most important news makers by Advertising Age. Mr. King is Founder, Chairman, and Chief Executive Officer of Who's Who Worldwide, Ltd.








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Arnold F. Sock was appointed President and a Director in July 2010. He has served as President, Chief Executive Officer, Chief Financial Officer, Corporate Secretary, and/or a director of numerous private companies since 1981, and six public companies since 1998, including 1st Global Financial Corporation from 2004 to 2007, Single Source Financial Services Corporation from 2000 to 2004, and Internet Business’s International, Inc. from 1998 to 1999. He is an Adjunct Assistant Professor at Webster University. He received his Bachelor of Science in Accounting and his Associates in Science in Management from Roger Williams University, his Juris Doctor from The University of West Los Angeles School of Law, and his Master of Laws in Taxation from Golden Gate University Law School. He has been a member of the State Bar of California since 1995.





Leonard Issacson was appointed Secretary and Chief Financial Officer in January 2011. Mr. Isaacson is a partner in the law firm of Feder Kasovitz LLP which he joined in 1983. He specializes in real estate, consumer and commercial banking, and estates. He supervises the loan closing department for one of the lending institutions represented by the firm and has extensive experience in drafting consumer and commercial loan documents. He also has extensive experience in land subdivision law, having represented numerous subdivision developers before regulatory agencies and in the preparation of the required filings for the Department of State of the State of New York and the Office of Interstate Land Sales (HUD). He is a member of the Board of Directors of the New York City Chapter of the Association for the Help of Retarded Children. He is active in various other philanthropic and charitable organizations. Mr. Isaacson received his bachelor's degree in business from the City College of New York in 1949. He received his LLB degree from New York University in 1951.





Adam Sietz was elected to the Board of Directors on November 23, 2010 and Assistant Secretary on December 10, 2010.  Mr. Sietz is the CEO of Sports/Entertainment Media Corporation (“SEM”). He has served as president of Big Hug Productions, the consulting, creative, and content production division of SEM since 2005. He worked at WOR-TV in New York as broadcast operations supervisor and on New York Mets broadcasts, receiving a special achievement Emmy Award. He has been teaching, speaking to, and motivating groups and individuals for almost two decades. Adam is also an award winning writer, producer, comedian, and actor, having appeared on Broadway, in movies, and on television.





Inga Lamonaca has been member of our board of directors, treasurer and secretary since 1996.  In January 2011, Mrs. Lamonica resigned from her position as Secretary and Treasurer of the Company.  Mrs. Lamonaca’s principle vocation has been teaching. In addition from 1994 to 2005, she was treasurer of private real estate corp. She received a BA in Education from George Washington University and a MA in Education from Queens College. Ms. Lamonaca resigned as Secretary and Treasurer in January 2011. The resignation of Inga Lamonaca was not the result of any disagreement with the Company on  any  matter  relating  to  our  operations,  policies or practices.





Mr. Russell Machover was elected to the Board of Directors on November 23, 2010. Russell Machover is a partner in OTC Corporate Transfer Service, a stock transfer company. He has founded, developed, and operated several successful companies. He has held key positions at private and public companies and at New York investment banking firms throughout his career. Mr. Machover is an advisor to members of the Royal Family of the State of Qatar, the AI-Thani Family.





Mubada G. “Gaby” Dakwar was elected to the Board of Directors on November 23, 2010.  Mr. Dakwar has served as President, CEO, Secretary, and International V.P. of many private companies since 1990, including REL International and Carlton General Foods. He is President of Premier T.G. Inc., which specializes in importing olive oil, balsamic vinegar, and other items. He has extensive experience in imports and exports and also in structuring governmental financing deals for soft loans for humanitarian projects. He attended New York University majoring in Chemistry and Economics.





Noel Raskin was elected to the Board of Directors on November 23, 2010.  Mr. Raskin has been a faculty member of the Mt. Sinai School of Medicine and of the New York Medical College for over 15 years. He has been a contributing author for over 25 articles, book sections, and medical journals. He was board certified in General Surgery and Thoracic Surgery. He is a member of a number of medical societies and is a Fellow of the American College of Physician Executives, the American College of Chest Physicians, and the American College of Surgeons. He is licensed to practice medicine in New York (since 1978) and in New Jersey (since 1989). He holds a B.A. in Biology from New York University, an M.S. in Medical Science from the University of Brussels, and an M.D. from New York Medical College.





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John H. Jackson was elected to the Board of Directors on January 10, 2011.  Mr. Jackson is the founder of JHJ & Associates, an aviation industry consulting firm. He has held senior management positions including CEO, in sales and marketing, and in other positions with division and company-wide operations responsibilities, with Pan American World Airways, Capital Airlines, Florida Airlines, and Braniff Airlines. He was the officer in charge of the on-site accident control center for the 1982 Air Florida Washington, DC incident, and at the Pan Am Center in London for the 1988 Lockerbie incident.  John has an MBA in marketing from North Texas State University.





Albert E. Solomon was elected to the Board of Directors on January 10, 2011.  Mr. Solomon has held the position of dean at a number of universities on both the East and West Coasts. He was a District Director of Instruction for a NJ regional high school district, the General Manager of an educational publishing company, and an in-house consultant for the NY State Education Department. He holds a Bachelor of Arts in English and History, a Master of Arts in English, and a PhD in Educational Administration.





Board Qualifications





The Board believes that each of our directors is highly qualified to serve as a member of the Board. Each of the directors has contributed to the mix of skills, core competencies and qualifications of the Board. When evaluating candidates for election to the Board, the Board seeks candidates with certain qualities that it believes are important, including integrity, an objective perspective, good judgment, leadership skills. Our directors are highly educated and have diverse backgrounds and talents and extensive track records of success in what we believe are highly relevant positions.





Audit Committee





The Board of Directors acts as the audit committee and the Board has no separate committees. The Company does not have a qualified financial expert at this time because it has not been able to hire a qualified candidate. Further, the Company believes that it has inadequate financial resources at this time to hire such an expert. The Company intends to continue to search for a qualified individual for hire.





Nominating Committee





We have not adopted any procedures by which security holders may recommend nominees to our Board of Directors.





COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934





Section 16(a) of the Exchange Act requires the Company’s directors and officers, and persons who beneficially own more than 10% of a registered class of the Company’s equity securities, to file reports of beneficial ownership and changes in beneficial ownership of the Company’s securities with the SEC on Forms 3, 4 and 5. Officers, directors and greater than 10% stockholders are required by SEC regulation to furnish the Company with copies of all Section 16(a) forms they file.





According to our records, our Officers and Directors have not filed the required forms.





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 in that our officers and sole director serves in all the above capacities.





Board Leadership Structure and Role in Risk Oversight





Due to the small size and non-operational stage of the Company, and its status as a shell company, we have not adopted a formal policy on whether the Chairman and Chief Executive Officer positions should be separate or combined.








21
 Table of Contents








Our board of directors is primarily responsible for overseeing our risk management processes on behalf of our board of directors.  The board of directors receives and reviews periodic reports from management, auditors, legal counsel, and others, as considered appropriate regarding our company’s assessment of risks. The board of directors focuses on the most significant risks facing our company and our company’s general risk management strategy, and also ensures that risks undertaken by our Company are consistent with the board’s appetite for risk. While the board oversees our company’s risk management, management is responsible for day-to-day risk management processes. We believe this division of responsibilities is the most effective approach for addressing the risks facing our company and that our board leadership structure supports this approach.





Item 11.
Executive Compensation.





None of the Company’s officers or directors has received any cash remuneration since inception. Except for the Preferred Issuance to Norman King, our Chief Executive Officer and Chairman, no other securities were issued to any officer or directors. Although no remuneration of any nature has been paid for or on account of services rendered by a director in such capacity, the Company intends to issue common stock to certain directors and officers, based upon the amount and nature of the respective director's or officer's investment in or service to the Company. None of the officers and directors intends to devote more than a few hours a week to our affairs.





It is possible that, after the Company successfully consummates a business combination with an unaffiliated entity, that entity may desire to employ or retain one or a number of members of our management for the purposes of providing services to the surviving entity. However, the Company has adopted a policy whereby the offer of any post-transaction employment to members of management will not be a consideration in our decision whether to undertake any proposed transaction.





No retirement, pension, profit sharing, stock option or insurance programs or other similar programs have been adopted by the Company for the benefit of its employees.





There are no understandings or agreements regarding compensation our management will receive after a business combination that is required to be included in this table, or otherwise.





Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.





The following tables set forth certain information as of June 30, 2011, regarding (i) each person known by the Company to be the beneficial owner of more than 5% of the outstanding shares of Common Stock, (ii) each director, nominee and executive officer of the Company and (iii) all officers and directors as a group.





Name and Address (A)

Amount and Nature

of Beneficial Ownership


Percentage

of Class(B)Leonard Issacson


0



0Albert Solomon


0



0John Jackson


0



0Noel Raskin


0



0Mubada Gaby Dakwar


0



0Russell Machover


0



0Inga Lamonica


0



0Adam Sietz


0



0Arnold F. Sock, Esq.


0



0Norman King


200,200,000
(C)


99.7
%All Directors as a group (9 individuals)


200,200,000



99.7
%Kuno Laren


318,000
(D)


44
%


* Less than 1% of class.







22
 Table of Contents








(A)
The address for each person referenced in the table is c/o the Company.(B)
Based on 725,200 shares outstanding as of August 16, 2011. Shares of common stock beneficially owned and the respective percentages of beneficial ownership of common stock assumes the exercise of all right to purchase common stock beneficially owned by such person or entity currently exercisable or exercisable within 60 days of August 15, 2011. In computing the number of shares beneficially owned and the percentage ownership, shares of common stock that may be acquired within 60 days of August 15, 2011 pursuant to the exercise of all right to purchase common stock are deemed to be outstanding for that person. Such shares, however, are not deemed outstanding for the purpose of computing the percentage ownership of any other.(C)
Norman King beneficially owns 200,000 shares held by The World of Magic, Inc., an entity wholly owned by Mr. King.  Mr. King’s beneficial ownership includes the 200,000,000 shares of Common Stock into which his 1,000 shares of Series A Preferred is convertible.(D)
Includes 183,200 shares held by certain family members and affiliates of Mr. Laren.








Item 13.
Certain Relationships and Related Transactions.





Except as otherwise indicated herein, there have been no related party transactions, or any other transactions or relationships required to be disclosed pursuant to Item 404 of Regulation S-K.





Item 14.
Principal Accounting Fees and Services.





Labrozzi & Co., PA (“Labrozzi”) is the Company's independent registered public accounting firm.





Audit Fees





The aggregate fees billed by Labrozzi for professional services rendered for the audit of our annual financial statements or services that are normally provided in connection with statutory and regulatory filings were $2,500  for the fiscal years ended June 30, 2010, and 2011.





Audit-Related Fees





There were no fees  billed by Labrozzi for assurance and related services that are reasonably related to the performance of the audit of the Company’s financial statements for the fiscal years ended June 30, 2010 and 2011.





Tax Fees





There were no fees billed by Labrozzi for professional services for tax compliance, tax advice, and tax planning for the fiscal years ended June 30, 2010 and 2011.





All Other Fees





There were no fees billed by Labrozzi for other products and services for the fiscal years ended June 30, 2010 and  2011.





Audit Committee’s Pre-Approval Process





The Board of Directors acts as the audit committee of the Company, and accordingly, all services are approved by all the members of the Board of Directors.





Item 15.
Exhibits.





(a)
Exhibits





The following exhibits are filed with this report on Form 10-K:


Exhibit No.

Description3.1

Certificate of Incorporation (1)3.2

By-Laws (1)3.3

Certificate of Amendment of Certificate of Incorporation, dated as of November 29, 1995 (1)3.4

Certificate of Amendment of Certificate of Incorporation, dated as of April 1, 1999 (1)3.5

Certificate of Amendment of Certificate of Incorporation, dated as of November 30, 2010 (1)3.6

Certificate of Amendment of Certificate of Incorporation, dated as of December 1, 2010 (2)3.7

Certificate of Correction of Certificate of Amendment, dated as of March 15, 2011 (3)4.1

Specimen form of common stock certificate (1)4.2

Certificate of Designation, dated as of March 15, 2011 (3)10.1

Stock Agreement by and between Kalex Corp, and Bruce Zigler, dated July 12, 2010 (4)10.2

Assignment Agreement, dated February 3, 2011 (3)31.1

Rule 13a-14(a) Certification of Principal Executive Officer31.2

Rule 13a-14(a) Certification of Principal Financial Officer32.1

Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 200232.2

Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002





(1)
Filed as an exhibit to the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2006 (File Number 000-52177) and incorporated herein by reference.(2)
Filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended December 31, 2010 and incorporated herein by reference.(3)
Filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2011 and incorporated herein by reference.(4)
Filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2010 and incorporated herein by reference.











23
 Table of Contents

















SIGNATURE





In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on the  21st day of December , 2012 .





KALEX CORP.By:
/s/  Arnold F. SockArnold F. SockPresident (Principal Executive Officer)(Principal Financial Officer)













24
 Table of Contents














Part IV





Item 15.
Exhibits, Financial Statement Schedules.





KALEX CORP.


(A DELAWARE CORPORATION)


New York, New York





FINANCIAL REPORTSATJUNE 30, 2011

















TABLE OF CONTENTS








Report of Independent Registered Public Accounting Firm
F-1Balance Sheets at June 30, 2010 and 2011
F-2Statements of Operations for the Years Ended June 30, 2010 and 2011
F-3Statements of Changes in Stockholders’ Deficit for the Years Ended June 30, 2010 and 2011
F-4Statements of Cash Flows for the Years Ended June 30, 2010 and 2011
F-5Notes to Financial Statements
F-6 - F-8











25
 Table of Contents








REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





To the Board of Directors and


Stockholders of Kalex Corporation.


New York, New York





We have audited the accompanying balance sheets of Kalex Corp. as of June 30, 2010and 2011 and the related statements of operations, deficiency in assets, and statements of cash flows for each of the three years 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 audits 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. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide 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 Kalex Corporation as of June 30, 2010 and 2011 and the results of its operations and its cash flows for the three years then ended  in conformity with accounting principles generally accepted in the United States of America.





The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company’s  losses 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.





/s/ Labrozzi & Co., PA





Miami, FL


September 15, 2011


Except as it relates to the matters discussed in the Restatement Note, as to which the date is


December 18, 2012








F-1
 Table of Contents








KALEX CORPORATION


BALANCE SHEET


(Restated)


Years Ended June 30,








ASSETS2011

(Restated)


2010Cash and cash equivalents

$
555


$
1,833TOTAL ASSETS

$
555


$
1,833LIABILITIES AND DECIENCY IN ASSETSDue to affiliates

$
34,700


$
34,700TOTAL LIABILITIES


15,034,700



34,700Preferred stock - $.00001 par value, 2,000 shares authorizednone outstanding


-



-Convertible Series A Preferred Stock ($0.00001 Par Value; 1,000 Shares Authorized;1,000 shares issued and outstandingCommon stock - $.01 par value, 800 ,000,000 shares authorized as of June 30, 2011 and 50,000,000 shares authorized as of June 30, 2010


8,000



8,000800,000 shares issued and 725,200 outstandingTreasury stock - 74,800 shares


(23,025
)


(23,025
)Additional paid in capital


3,000



3,000Accumulated deficit


(22,120
)


(20,842
)Deficiency in assets


(34,145
)


(32,867
)TOTAL LIABILITIES AND DEFICIENCY IN ASSETS

$
555


$
1,833










F-2
 Table of Contents














KALEX CORPORATION


STATEMENTS OF OPERATIONS


Years Ended June 30,








2011


2010General and administrative expenses

$
1,278


$
4,420Net loss

$
(1,278
)

$
(4,420
)Basic and diluted net loss per common share

$
(0.00
)

$
(0.00
)Weighted average number of common shares outstanding


725,200



725,200








F-3
 Table of Contents








KALEX CORP.


STATEMENTS OF DEFICIENCY IN ASSETS


Years Ended June 30,











800,000,000 shares authorized


Additional


Treasury StockShares


Par Value


Paid-in


No. of





AccumulatedIssued


$.01 per share


Capital


Shares


Amount


Deficit


TotalDEFICIENCY IN ASSETS - JUNE 30, 2008


800,000


$
8,000


$
3,000


$
74,800


$
(23,025
)

$
(14,225
)

$
(26,250
)Net loss


-



-



-



-



-



(2,197
)


(2,197
)DEFICIENCY IN ASSETS - JUNE 30, 2009


800,000



8,000



3,000



74,800



(23,025
)


(16,422
)


(28,447
)Net loss


-



-



-



-



-



(4,420
)


(4,420
)DEFICIENCY IN ASSETS - JUNE 30, 2010


800,000



8,000



3,000



74,800



(23,025
)


(20,842
)


(32,867
)Net loss


-



-



-



-



-



(1,278
)


(1,278
)DEFICIENCY IN ASSETS - JUNE 30, 2011


800,000


$
8,000


$
3,000



74,800


$
(23,025
)

$
(22,120
)

$
(34,145
)











F-4
 Table of Contents





KALEX CORP.


STATEMENTS OF CASH FLOWS


Years Ended June 30,








2011


2010Cash Flows from Operating ActivitiesNet loss from operations

$
(1,278
)

$
(4,420
)Net cash used in operating activities


(1,278
)


(4,420
)Net change in cash and cash equivalents


(1,278
)


(4,420
)Cash and cash equivalents - beginning of year


1,833



6,253Cash and cash equivalents - end of year

$
555


$
6,253Supplemental Disclosure of Cash Flow Information:Cash paid for interest

$
-


$
-Cash paid for taxes

$
-


$
-







F-5
 Table of Contents











KALEX CORP.


(A DELAWARE CORPORATION)





NOTES TO FINANCIAL STATEMENTS





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 AccountingThe Company maintains its books and prepares its financial statements on the accrual basis of accounting.Cash and Cash EquivalentsCash 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 ShareLoss 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 EstimatesThe 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.Income TaxesThe 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 PronouncementsThe 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.











F-6
 Table of Contents





Equity Securities





Holders of shares of common stock shall be entitled to cast one vote for each common share held at all stockholder’s 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 $34,142 at June 30, 2011.





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 current CEO, as well as other companies and individuals affiliated with them. As of June 30, 2011 a total of $34,700 is owed to the related parties as follows:





Kumala,Inc.

$
13,000Kuno Laren


8,000Grant lnc.


10,000Norman King


3,700





NOTE 4 – [REMOVED] (See Note 6)





NOTE 5 – EQUITY





The Articles of Incorporation were amended on November 30th, 2010 authorizing 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.





On March 15, 2011, in accordance with Section 141(f) of the Delaware Corporation Law and the Bylaws of the Company, the Board of Directors unanimously approved the designation of 1,000 authorized preferred shares, which were deemed Series A Convertible Preferred Stock and such preferred shares have the right to convert into 200,000 shares of common stock per share of Series A Convertible Preferred Stock.  The class of 1,000 shares of Series A Convertible Preferred Stock have the number of votes equal to that number of common shares which is not less than 51% of the vote required to approve any action.  Upon conversion of any portion of the 1,000 shares of Series A Convertible Preferred Stock, the 51% voting power is reduced proportionately by the aggregate number of shares converted.





On March 15, 2011, the Board of Directors unanimously approved the issuance of 1,000 shares of Series A Convertible Preferred Stock to Norman King, the Chairman of the Board and CEO in consideration of the financial and other assistance provided to the Company over many years, including, among other acts, the payment of various Company fees and expenses, and lately, leasing of the Company's headquarters at the Empire State Building in his name, and with regard to his extensive current efforts to assist the Company in acquiring an operating entity, and potentially more than one, and his orchestration of the future growth of the Company through his connections, relationships, and associations, and after review by his counsel, an expert in the transactions and activities of public companies.







F-7
 Table of Contents






NOTE 6 – RESTATEMENT





Background
 
 On July 12, 2012, the Company and American Marketing Complex Int’l Inc. (“AMCI”) entered into a rescission agreement (the “Rescission”) whereby the Company and AMCI agreed to declare null and void and of no force and effect, that certain stock agreement dated July 12, 2010 (the “Agreement”).  The Rescission was intended to void, ab initio, the Agreement, treating the Agreement as invalid from the outset.  Accordingly, both the Company and AMCI mutually agreed to release each other of all respective obligations under the Agreement.  As a result of the Recession, the Company was released of its obligation to issue up to 60,000,000 shares of the Company’s common stock to AMCI and AMCI was released of its obligation to provide the Company with $15,000,000 worth of cash equivalent media credits.
 
 As a result of the Rescission the Company’s President concluded that the previously issued financial statements contained in the Company’s Quarterly Reports on Form 10-Q for the periods ended September 30, 2010, December 31, 2010 and March 31, 2011 and the Company’s Annual Report on Form 10-K for the periods ended June 30, 2011 could no longer be relied upon because of the treatment of the Agreement as invalid from the outset.
 
 The Company has discussed with Labrozzi & Co., PA, the Company’s independent registered public accounting firm, the effects of the Agreement and the reduction of Assets - Prepaid advertising – media credit from $15,000,000 to $0 and the reduction of Liabilities and Deficiency in Assets – Derivative liability from $15,000,000 to $0.
 
 Effects of Restatement
 
 The tables below present the effect of the financial statement adjustments related to the restatement of our previously reported financial statements as of and for the fiscal year ended June 30, 2011.  The effect of the restatement on the consolidated balance sheet as of June 30, 2011 is as follows:


June 30, 2011

As Reported


Adjustments


As RestatedASSETSCash and cash equivalents

$
555


$
-


$
555Prepaid advertising – media credits


15,000,000



(15,000,000
)


-TOTAL ASSETS

$
15,000,555



-


$
555LIABILITIES AND DEFICIENCY IN ASSETSDue to affiliates

$
34,700


$
-


$
34,700Derivative liability


15,000,000



(15,000,000
)


-TOTAL LIABILITIES

$
34,700


$
-


$
34,700





Consistent with the information above, the Company has removed from the Notes to Financial Statements the discussion of derivative liability, previously Note 4.
































F-8