CONECTISYS CORP 10-K

ITEM 1. BUSINESS Our Company Conectisys Corporation, a Colorado corporation (“Conectisys”, the “Company”, “we”, “us” or “our”) is a shell company seeking to create value for its shareholders by merging with another entity with experienced management and opportunities for growth in return for shares of our Common Stock. No potential merger candidate has been identified at this time. We do not propose to restrict our search for a business opportunity to any particular industry or geographical area and may, therefore, engage in essentially any business in any industry. We have unrestricted discretion in seeking and participating in a business opportunity, subject to the availability of such opportunities, economic conditions, and other factors. The selection of a business opportunity in which to participate is complex and risky. Additionally, we have only limited resources and may find it difficult to locate good opportunities. There can be no assurance that we will be able to identify and acquire any business opportunity which will ultimately prove to be beneficial to us and our shareholders. We will select any potential business opportunity based on our management's best business judgment. Our activities are subject to several significant risks, which arise primarily as a result of the fact that we have no specific business, and may acquire or participate in a business opportunity based on the decision of management, which potentially could act without the consent, vote, or approval of our shareholders. The risks faced by us are further increased as a result of a lack of resources and our inability to provide a prospective business opportunity with significant capital. Our History The Company was incorporated in Colorado on February 2, 1986, under the name Coastal Financial Corp. On December 5, 1994, Coastal Financial Corp. changed its name to BDR Industries, Inc., which changed its name on October 16, 1995, to Conectisys Corporation. The Company was engaged in the development of a low-cost automatic meter reading, or AMR Solution, until it ceased all business activity in 2008. We have had no revenues since 2008. The Company resumed its SEC filings with Form 10-K for its former fiscal year ended September 30, 2020. Previously, the Company had filed its last Form 10-Q for the quarterly period ended June 30, 2008, and Form 15 on December 29, 2014. We are now current with our voluntary SEC filings and have adopted the calendar year as our fiscal year. 1 Debt Extinguishment In 2008, when the Company ceased all operations, its balance sheet reported miscellaneous assets of $172,581, accounts payable of $383,404, accrued compensation of $2,458,322, convertible notes payable aggregating $6,633,312, and related accrued interest of $498,132. All assets were fully amortized or realized by the end of 2008. All accrued compensation was payable to members of the Company’s Board of Directors. Pursuant to a December 1, 2008, resolution, the Board approved the waiver and cancellation of all accrued compensation amounting to $2,458,322. All notes payable were issued in multiple rounds of financings to NIR Group, AJW, New Millenium Capital Partners and the Laurus Master Fund. All lenders were controlled directly or indirectly by Corey Ribotsky. The convertible notes included the issuance of common stock warrants, all of which expired unexercised. The Securities and Exchange Commission announced that, on November 14, 2013, a final judgement by consent was entered against Defendant Corey Ribotsky. In addition, all claims against Defendant NIR Group were dismissed at the SEC’s request because that entity is defunct and has no assets. The SEC’s enforcement action determined, inter alia, that the AJW Funds were managed through NIR. Ribotsky consented to the final judgments, agreed to permanent injunctions prohibiting him from violating various sections of the Securities Act of 1933 and 1934 as well as the Investment Advisers Act of 1940. Ribotsky also agreed to pay $12,500,000 in disgorgement, $1,000,000 in prejudgment interest, and a $1,000,000 civil penalty. The Financial Services Division of the Grand Court of the Cayman Islands appointed two voluntary liquidators for the Laurus Master Fund, Ltd in 2009. The Cayman Island’s Bankruptcy Court Report of January 2014 identified various AJW and New Millenium Capital Partners funds, together the “AJW Funds”, that were assigned to Hull/Gemini, liquidation auditors. The liquidators carried out an extensive review of the Funds’ portfolio and determined that the only realistic route to a potential recovery from the AJW Funds might be from a lawsuit against the former US auditors of the Funds. In summary: · the Company was a victim of predatory lending by Corey Ribotsky and his affiliated entities listed above; · all above lending entities ceased to exist over a decade ago; · all judicial collection efforts mandated by U.S. and Cayman Islands Courts were exhausted approximately a decade ago; · any and all other obligations were barred from any collection efforts since the time frame allowed by the applicable statutes of limitations for a legal action in all relevant jurisdictions expired at various times between 2011 and April 2017. Pursuant to the guidance in ASC 405-20-40-1, the Company obtained an Order for Default Judgment in its favor and against all creditors named above. The District Court of Denver, Colorado, decreed the Company to be legally released from all liabilities arising from its Notes payable because their collections were barred by the New York statute of limitations. In addition, the Court decreed the Company to be legally released from all liabilities associated with the accounts payable and accrued liabilities described above since the collection of these obligations is barred by the California statute of limitations. The Order was issued and signed by Jon J. Olafson, District Court Judge. 2 Accordingly, the Company extinguished all its obligations effective as of the end of fiscal 2017. The extinguishment resulted in a decrease of its accumulated deficit of $9,591,024. As of the end of fiscal 2017, the only items comprising the Company’s balance sheet were Common Stock of $32,246,341 and an equal amount of Accumulated Deficit. In 2020, Danilo Cacciamatta became the controlling shareholder and resumed the Company’s voluntary SEC filings. One consequence of the resulting change in control for Federal tax purposes is that the possible future benefit of the Company’s tax loss carryforward of approximately $26 million became severely limited. General Business Plan Our business plan to seek a merger has many uncertainties which pose risks to investors. We intend to seek, investigate and, if such investigation warrants, acquire an interest in business opportunities presented to us by persons or firms which desire to seek the advantages of an issuer who has complied with the Securities Act of 1934 (the “1934 Act”). We will not restrict our search to any specific business, industry or geographical location, and we may participate in business ventures of virtually any nature. This discussion of our proposed business is purposefully general and is not meant to be restrictive of our unlimited discretion to search for and enter into potential business opportunities. We anticipate that we may be able to participate in only one potential business venture because of our lack of financial resources. We may seek a business opportunity with entities which have recently commenced operations, or that desire to utilize the public marketplace in order to raise additional capital in order to expand into new products or markets, to develop a new product or service, or for other corporate purposes. All of these activities have risk to investors including dilution and management. We expect that the selection of a business opportunity will be complex. Due to general economic conditions, rapid technological advances being made in some industries and shortages of available capital, we believe that there are numerous firms seeking the benefits of an issuer who has complied with the 1934 Act. Such benefits may include facilitating or improving the terms on which additional equity financing may be sought, providing liquidity for incentive stock options or similar benefits to key employees, providing liquidity (subject to restrictions of applicable statutes) for all stockholders and other factors. 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. We have, and will continue to have, essentially no assets to provide the owners of business opportunities. However, we will be able to offer owners of acquisition candidates the opportunity to acquire a controlling ownership interest in an issuer who has complied with the 1934 Act without incurring the cost and time required to conduct an initial public offering. The analysis of new business opportunities will be undertaken by, or under the supervision of, our Board of Directors. We intend to concentrate on identifying preliminary prospective business opportunities which may be brought to our attention through present associations of our director, professional advisors or by our stockholders. In analyzing prospective business opportunities, we will consider such matters as (i) available technical, financial and managerial resources; (ii) working capital and other financial requirements; (iii) history of operations, if any, and prospects for the future; (iv) nature of present and expected competition; (v) quality, experience and depth of management services; (vi) potential for further research, development or exploration; (vii) specific risk factors not now foreseeable but that may be anticipated to impact the proposed activities of the company; (viii) potential for growth or expansion; (ix) potential for profit; (x) public recognition and acceptance of products, services or trades; (xi) name identification; and (xii) other factors that we consider relevant. As part of our investigation of the business opportunity, we expect to meet personally with management and key personnel. To the extent possible, we intend to utilize written reports and personal investigation to evaluate the above factors. We will not acquire or merge with any company for which audited financial statements cannot be obtained within a reasonable period of time after closing of the proposed transaction. 3 Acquisition Interest In implementing a structure for a particular business acquisition, we may become a party to a merger, consolidation, reorganization, joint venture, or licensing agreement with another company or entity. We may also acquire stock or assets of an existing business. Upon consummation of a transaction, it is probable that our present management and stockholders will no longer be in control of us. In addition, our sole director may, as part of the terms of the acquisition transaction, resign and be replaced by new directors without a vote of our stockholders, or sell his stock in us. Any such sale will only be made in compliance with the securities laws of the United States and any applicable state. It is anticipated that any securities issued in any such reorganization would be issued in reliance upon exemption from registration under application federal and state securities laws. In some circumstances, as a negotiated element of the transaction, we may agree to register all or a part of such securities immediately after the transaction is consummated or at specified times thereafter. If such registration occurs, it will be undertaken by the surviving entity after it has successfully consummated a merger or acquisition and is no longer considered an inactive company. The issuance of substantial additional securities and their potential sale into any trading market which may develop in our securities may have a depressive effect on the value of our securities in the future. There is no assurance that such a trading market will develop. While the actual terms of a transaction cannot be predicted, it is expected that the parties to any business transaction on will find it desirable to avoid the creation of a taxable event and thereby structure the business transaction in a so-called “tax-free” reorganization under Sections 368(a)(1) or 351 of the Internal Revenue Code (the “Code”). In order to obtain tax-free treatment under the Code, it may be necessary for the owner of the acquired business to own 80% or more of the voting stock of the surviving entity. In such event, our stockholders would retain less than 20% of the issued and outstanding shares of the surviving entity. This would result in significant dilution in the equity of our stockholders. As part of our investigation, we expect to meet personally with management and key personnel, visit and inspect material facilities, obtain independent analysis of verification of certain information provided, check references of management and key personnel, and take other reasonable investigative measures, to the extent of our limited financial resources and management expertise. The manner in which we participate in an opportunity will depend on the nature of the opportunity, the respective needs and desires of both parties, and the management of the opportunity. With respect to any merger or acquisition, and depending upon, among other things, the target company’s assets and liabilities, our stockholders will in all likelihood hold a substantially lesser percentage ownership interest in us following any merger or acquisition. The percentage ownership may be subject to significant reduction in the event we acquire a target company with assets and expectations of growth. Any merger or acquisition can be expected to have a significant dilutive effect on the percentage of shares held by our stockholders. We will participate in a business opportunity only after the negotiation and execution of appropriate written business agreements. Although the terms of such agreements cannot be predicted, generally we anticipate that such agreements will (i) require specific representations and warranties by all of the parties; (ii) specify certain events of default; (iii) detail the terms of closing and the conditions which must be satisfied by each of the parties prior to and after such closing; (iv) outline the manner of bearing costs, including costs associated with the Company’s attorneys and accountants; (v) set forth remedies on defaults; and (vi) include miscellaneous other terms. As stated above, we will not acquire or merge with any entity which cannot provide independent audited financial statements within a reasonable period of time after closing of the proposed transaction. If such audited financial statements are not available at closing, or within time parameters necessary to insure our compliance within the requirements of the 1934 Act, or if the audited financial statements provided do not conform to the representations made by that business to be acquired, the definitive closing documents will provide that the proposed transaction will be voidable, at the discretion of our present management. If such transaction is voided, the definitive closing documents will also contain a provision providing for reimbursement for our costs associated with the proposed transaction. 4 Competition We believe we are an insignificant participant among the firms which engage in the acquisition of business opportunities. There are many established venture capital and financial concerns that have significantly greater financial and personnel resources and technical expertise than we have. In view of our limited financial resources and limited management availability, we will continue to be at a significant competitive disadvantage compared to our competitors. Intellectual Property We own no intellectual property. Employees We presently have no full time executive, operational, or clerical staff. Mr. Cacciamatta has been the sole director and sole officer of the Company since August 1, 2020. Factors Affecting Future Performance Rather than an operating business, our goal is to obtain debt and/or equity financing to meet our ongoing operating expenses and attempt to merge with another entity with experienced management and opportunities for growth in return for shares of our Common Stock to create value for our shareholders. Although there is no assurance that this series of events will be successfully completed, we believe we can successfully complete an acquisition or merger which will enable us to continue as a going concern. Any acquisition or merger will most likely be dilutive to our existing stockholders. The factors affecting our future performance are listed and explained below under the section “Risk Factors”.