Item 1A. Risk Factors.
As a “smaller reporting company” as
defined by Item 10 of Regulation S-K, the Company is not required to provide this information.
Item 1B. Unresolved Staff Comments.
None.
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. Given the limited need of the Company, management believes
that the office space is more than suitable and adequate. 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.
There are presently no pending legal proceedings
to which the Company or any of its property is subject, or any material proceedings to which any director, officer or affiliate of the
Company, any owner of record or beneficially of more than five percent of any class of voting securities is a party or has a material
interest adverse to the Company, and no such proceedings are known to the Company to be threatened or contemplated against it.
Item 4. Mine Safety Disclosures.
Not applicable.
5
PART II
Item 5. Market for Registrant’s Common
Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
The Company is authorized by its Certificate of
Incorporation to issue an aggregate of 60,000,000 shares of capital stock, of which 50,000,000 are shares of Common Stock and 10,000,000
are shares of Preferred Stock. As of the date of filing this Form 10-K, 5,000,000 shares of Common Stock and zero shares of Preferred
Stock were issued and outstanding and the Company had two stockholders of record.
Common Stock
All outstanding shares of Common Stock are of
the same class and have equal rights and attributes. The holders of Common Stock are entitled to one vote per share on all matters submitted
to a vote of stockholders of the Company. All stockholders are entitled to share equally in dividends, if any, as may be declared from
time to time by the Company’s board of directors out of funds legally available. In the event of liquidation, the holders of Common
Stock are entitled to share ratably in all assets remaining after payment of all liabilities. The stockholders do not have cumulative
or preemptive rights.
There is currently no public market for our Common
Stock. Furthermore, no public trading market is expected to develop in the foreseeable future unless and until the Company completes a
business combination with an operating business. However, we cannot guarantee our Common Stock will ever be listed on any exchange or
approved for quotation on any over-the-counter market.
Preferred Stock
Our Certificate of Incorporation authorizes the
issuance of up to 10,000,000 shares of Preferred Stock with designations, rights and preferences 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 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. Although we have no present intention to issue any shares of our authorized
Preferred Stock, there can be no assurance that the Company will not do so in the future.
Dividends
We have not paid any dividends on our common stock
to date and do not intend to pay dividends prior to the completion of a business combination. The payment of dividends in the future will
be contingent upon our revenues and earnings, if any, capital requirements and general financial condition subsequent to completion of
a business combination. The payment of any dividends subsequent to a business combination will be within the discretion of our then board
of directors. It is the present intention of our board of directors to retain all earnings, if any, for use in our business operations
and, accordingly, our board does not anticipate declaring any dividends in the foreseeable future.
Securities Authorized for Issuance under Equity
Compensation Plans
The Company has not authorized any securities
for issuance under an equity incentive plan.
Recent Sales of Unregistered Securities
On November 13, 2020, the Company issued (i) an
aggregate of 4,750,000 shares of Common Stock to Mark Tompkins, a director of the Company, for an aggregate purchase price equal to $475
representing amounts advanced by Mr. Tompkins to counsel for the Company in connection with the formation and organization of the Company
and (ii) an aggregate of 250,000 shares of Common Stock to Ian Jacobs, an officer and director of the Company, for an aggregate cash purchase
price equal to $25, pursuant to the terms and conditions set forth in the Common Stock Purchase Agreement with each person. The Company
issued these shares of Common Stock under the exemption from registration provided by Section 4(a)(2) of the Securities Act.
6
On November 13, 2020, in connection with advances
made in connection with costs incurred by the Company, the Company issued a promissory note to Mark Tompkins, a stockholder and director
of the Company, pursuant to which the Company agreed to repay Mr. Tompkins the sum of any and all amounts that Mr. Tompkins may advance
to the Company on or before the date that the Company consummates a business combination with a private company or reverse takeover transaction
or other transaction after which the Company would cease to be a shell company (as defined in Rule 12b-2 under the Exchange Act). The
Company has used the proceeds from the note to cover its expenses. Although Mr. Tompkins has no obligation to advance funds to the Company
under the terms of the note, it is anticipated that he may advance funds to the Company as fees and expenses are incurred in the future.
As a result, the Company issued the note in anticipation of such advances. Interest shall not accrue on the outstanding principal amount
of the note except if an Event of Default (as defined in the note) has occurred. In the event of an Event of Default, the entire note
shall automatically become due and payable (the “Default Date”), and starting from five (5) days after the Default Date, the
interest rate on the note shall accrue at the rate of eighteen percent (18%) per annum. As of December 31, 2020, the total amount due
under the note was $22,500.
The proceeds from the sale of the securities described
above will be, and have been, used for working capital and general and administrative expenses. No securities have been issued for services.
Neither the Registrant nor any person acting on its behalf offered or sold the securities by means of any form of general solicitation
or general advertising. No services were performed by any purchaser as consideration for the shares issued. The sale of the securities
identified above were made pursuant to a privately negotiated transaction that did not involve a public offering of securities and, accordingly,
was exempt from the registration requirements of the Securities Act pursuant to Section 4(a)(2) thereof and the rules promulgated thereunder.
Issuer Purchases of Equity Securities
None.
Item 6. Selected Financial Data.
As a “smaller reporting company” 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. Overview of our Business
Laffin Acquisition Corp. was incorporated in the
State of Delaware on November 9, 2020. Since inception, the Company has been engaged in organizational efforts and obtaining initial financing.
The Company was formed as a vehicle to pursue a business combination. The Company filed a registration statement on Form 10 with the SEC
on January 4, 2021 as amended and filed on April 9, 2021, and since its effectiveness, the Company has focused its efforts to identify
a possible business combination.
The Company is currently considered to be 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 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.” Many states have enacted statutes, rules and regulations limiting the
sale of securities of “blank check” companies in their respective jurisdictions. The Company is also a “shell company,”
defined in Rule 12b-2 under the Exchange Act as a company with no or nominal assets (other than cash) and no or nominal operations. 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.
In addition, the Company is an “emerging
growth company,” as defined in the JOBS Act, and may take advantage of certain exemptions from various reporting requirements that
are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being
required to comply with the auditor attestation requirements of section 404(b) of the Sarbanes-Oxley Act, and exemptions from the requirements
of Sections 14A(a) and (b) of the Exchange Act to hold a nonbinding advisory vote of shareholders on executive compensation and any golden
parachute payments not previously approved.
7
The Company has also elected to use the extended
transition period for complying with new or revised accounting standards under Section 102(b)(1) of the JOBS Act. This election allows
us to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until
those standards apply to private companies. As a result of this election, our financial statements may not be comparable to companies
that comply with public company effective dates.
We will remain an “emerging growth company”
until the earliest of (1) the last day of the fiscal year during which our revenues equal $1.07 billion or more, (2) the date on which
we issue more than $1 billion in non-convertible debt in a three year period, (3) the last day of the fiscal year following the fifth
anniversary of the date of the first sale of our common equity securities pursuant to an effective registration statement filed pursuant
to the Securities Act, or (4) when the market value of our common stock that is held by non-affiliates exceeds $700 million as of the
last business day of our most recently completed second fiscal quarter. To the extent that we continue to qualify as a “smaller
reporting company,” as such term is defined in Rule 12b-2 under the Exchange Act, after we cease to qualify as an emerging growth
company, certain of the exemptions available to us as an emerging growth company may continue to be available to us as a smaller reporting
company, including: (1) not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes Oxley
Act; (2) scaled executive compensation disclosures; and (3) the requirement to provide only two years of audited financial statements,
instead of three years.
The Company has not conducted any active operations
since inception, except for its efforts to locate suitable acquisition candidates. No revenue has been generated by the Company since
inception. 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. The Company’s plan of operation for the remainder of the fiscal year shall be to continue its
efforts to locate suitable acquisition candidates. Our 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 our potential candidate target companies to any specific business, industry or geographical location and, thus, may acquire
any type of business.
The Company does not currently engage in any business
activities that provide cash flow. The costs of investigating and analyzing business combinations for the next 12 months and beyond such
time will be paid with funds to be loaned to or invested in us by our stockholders, management or other investors.
The Company currently does not engage in any business
activities that provide cash flow. During the next twelve months, we anticipate incurring costs related to:
(i) filing Exchange Act reports, and
(ii) investigating, analyzing and consummating an acquisition.
We believe we will be able to meet these costs
through use of funds to be loaned by or invested in us by our stockholders, management or other investors. There are no assurances that
such funds will be advanced or that the Company will be able to secure any additional funding as needed. As of December 31, 2020, the
Company had $9,558 in cash. On November 13, 2020, in connection with advances made in connection with costs incurred by the Company, the
Company issued a promissory note to Mark Tompkins, a stockholder and director of the Company, pursuant to which the Company agreed to
repay Mr. Tompkins the sum of any and all amounts that Mr. Tompkins may advance to the Company on or before the date that the Company
consummates a business combination with a private company or reverse takeover transaction or other transaction after which the Company
would cease to be a shell company (as defined in Rule 12b-2 under the Exchange Act). The Company has used the proceeds from the note to
cover its expenses. Although Mr. Tompkins has no obligation to advance funds to the Company under the terms of the note, it is anticipated
that he may advance funds to the Company as fees and expenses are incurred in the future. As a result, the Company issued the note in
anticipation of such advances. Interest shall not accrue on the outstanding principal amount of the note except if an Event of Default
(as defined in the note) has occurred. In the event of an Event of Default, the entire note shall automatically become due and payable
(the “Default Date”), and starting from five (5) days after the Default Date, the interest rate on the note shall accrue at
the rate of eighteen percent (18%) per annum. As of December 31, 2020, the total amount due under the note was $22,500. We currently have
no other agreements or specific arrangements in place with our stockholders, management or other investors. We currently have no other
agreements or specific arrangements in place with our stockholders, management or other investors.
8
Our ability to continue as a going concern is
dependent upon our ability to generate future profitable operations and/or to obtain the necessary financing to meet our obligations and
repay our liabilities arising from normal business operations when they come due. Our ability to continue as a going concern is also dependent
on our ability to find a suitable target company and enter into a possible reverse merger with such company. Management’s plan includes
obtaining additional funds by equity financing through a reverse merger transaction and/or related party advances, however there is no
assurance of additional funding being available.
The Company, as of December 31, 2020 had $9,558
in cash and has not earned any revenues from operations to date. In the next 12 months, we expect to incur expenses equal to approximately
$40,000 related to legal, accounting, audit, and other professional service fees incurred in relation to the Company’s Exchange
Act filing requirements. The costs related to the acquisition of a business combination target company vary widely and are dependent on
a variety of factors including, but not limited to, the amount of time it takes to complete a business combination, the location of the
target company, the size and complexity of the business of the target company, whether stockholders of the Company prior to the transaction
will retain equity in the Company, the scope of the due diligence investigation required, the involvement of the Company’s auditors
in the transaction, possible changes in the Company’s capital structure in connection with the transaction, and whether funds may
be raised contemporaneously with the transaction. Therefore, we believe such costs are unascertainable until the Company identifies a
business combination target. These conditions raise substantial doubt about our ability to continue as a going concern. The Company is
currently devoting its efforts to locating merger candidates. The Company’s ability to continue as a going concern is dependent
upon our ability to develop additional sources of capital, locate and complete a merger with another company, and ultimately, achieve
profitable operations.
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. Our management believes that the public company status that results from a combination with the
Company will provide such company greater access to the capital markets, increase its visibility in the investment community, and offer
the opportunity to utilize its stock to make acquisitions. There is no assurance that we will in fact have access to additional capital
or financing as a public company. 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 we select for a potential
business combination 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.
Our management anticipates that it will likely
be able to effect only one business combination, due primarily to our limited financing and the dilution of interest for present and prospective
stockholders, which is likely to occur as a result of our management’s plan to offer a controlling interest to a target business
in order to achieve a tax-free reorganization. This lack of diversification should be considered a substantial risk in investing in us,
because it will not permit us to offset potential losses from one venture against gains from another.
The Company anticipates that the selection of
a business combination will be complex and extremely risky. While the Company is in a competitive market with a small number of business
opportunities, through information obtained from industry professionals including attorneys, investment bankers, and other consultants
with experience in the reverse merger industry, our management believes that there are opportunities for a business combination with firms
seeking 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.
9
We do not currently intend to retain any entity
to act as a “finder” to identify and analyze the merits of potential target businesses. However, we contemplate that Montrose
Capital may introduce business combination opportunities to us. There are currently no agreements or preliminary agreements between us
and Montrose Capital.
We have not established a specific timeline nor
have we created a specific plan to identify an acquisition target and consummate a business combination. We expect that our management
and the Company, through its various contacts and affiliations with other entities, including Montrose Capital, will locate a business
combination target. We expect that funds in the amount of approximately $40,000 will be required in order for the Company to satisfy its
Exchange Act reporting requirements during the next 12 months, in addition to any other funds that will be required in order to complete
a business combination. Such funds can only be estimated upon identifying a business combination target. Our management and stockholders
have indicated an intent to advance funds on behalf of the Company as needed in order to accomplish its business plan and comply with
its Exchange Act reporting requirements, however, there are no agreements in effect between the Company and our management or stockholders
specifically requiring they provide any funds to the Company. Therefore, there are no assurances that the Company will be able to obtain
the required financing as needed in order to consummate a business combination transaction.
COVID-19
On March 11, 2020, the World Health Organization
officially declared the outbreak of the novel coronavirus COVID-19 a “pandemic.” A significant outbreak of COVID-19 and other
infectious diseases has resulted in a widespread health crisis that has significantly adversely affected businesses of all types, economies
and financial markets worldwide. The business of any potential target business with which we consummate a business combination could be
materially and adversely affected. Furthermore, we may be unable to complete a business combination if continued concerns relating to
COVID-19 restrict travel, limit the ability to have meetings with potential investors or the target company’s personnel, vendors
and services providers are unavailable to negotiate and consummate a transaction in a timely manner. The extent to which COVID-19 impacts
our search for a business combination will depend on future developments, which are highly uncertain and cannot be predicted, including
new information which may emerge concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others.
If the disruptions posed by COVID-19 or other matters of global concern continue for an extended period of time, our ability to consummate
a business combination, or the operations of a target business with which we ultimately consummate a business combination, may be materially
adversely affected.
Liquidity and Capital Resources
As of December 31, 2020, the Company had total
assets equal to $9,558 comprised exclusively of cash. The Company’s current liabilities as of December 31, 2020, totaled $27,000
comprised of amounts due under a note payable to a shareholder for $22,500; and accounts payable for $4,500. The Company can provide no
assurance that it can continue to satisfy its cash requirements for at least the next twelve months.
The following is a summary of the Company’s
cash flows provided by (used in) operating and financing activities for the period November 9, 2020 (inception) to December 31, 2020:
Net Cash (Used In) Operating Activities $ (12,967 )
Net Cash Provided by Financing Activities $ 22,525
Net Change in Cash $ 9,558
The Company has only cash assets and has generated
no revenues since inception. The Company is also dependent upon the receipt of capital investment or other financing to fund its ongoing
operations and to execute its business plan of seeking a combination with a private operating company. In addition, the Company is dependent
upon certain related parties to provide continued funding and capital resources. If continued funding and capital resources are unavailable
at reasonable terms, the Company may not be able to implement its plan of operations.
10
Issuance of Promissory Note to a Stockholder
and Director
On November 13, 2020, the Company issued a promissory
note (the “Note”) to the majority stockholder of the Company, Mark Tompkins, a stockholder and director of the Company, pursuant
to which the Company agreed to repay Mr. Tompkins the sum of any and all amounts that Mr. Tompkins may advance to the Company on or before
the date that the Company consummates a business combination with a private company or reverse takeover transaction or other transaction
after which the Company would cease to be a shell company (as defined in Rule 12b-2 under the Exchange Act). The Company has used the
proceeds from the note to cover its expenses. Although Mr. Tompkins has no obligation to advance funds to the Company under the terms
of the note, it is anticipated that he may advance funds to the Company as fees and expenses are incurred in the future. As a result,
the Company issued the note in anticipation of such advances. Interest shall not accrue on the outstanding principal amount of the note
except if an Event of Default (as defined in the note) has occurred. In the Event of Default, the entire note shall automatically become
due and payable (the “Default Date”), and starting from five (5) days after the Default Date, the interest rate on the note
shall accrue at the rate of eighteen percent (18%) per annum. As of December 31, 2020, the total amount due under the note was $22,500.
Results of Operations
The Company has not conducted any active operations
since inception, except for its efforts to locate suitable acquisition candidates. No revenue has been generated by the Company from November
9, 2020 (Inception) through December 31, 2020. 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 operations for the next twelve months shall
be to continue its efforts to locate suitable acquisition candidates.
The Company, as of December 31, 2020 had $9,558
in cash and has not earned any revenues from operations to date. In the next 12 months, we expect to incur expenses equal to approximately
$40,000 related to legal, accounting, audit, and other professional service fees incurred in relation to the Company’s Exchange
Act filing requirements. The costs related to the acquisition of a business combination target company vary widely and are dependent on
a variety of factors including, but not limited to, the amount of time it takes to complete a business combination, the location of the
target company, the size and complexity of the business of the target company, whether stockholders of the Company prior to the transaction
will retain equity in the Company, the scope of the due diligence investigation required, the involvement of the Company’s auditors
in the transaction, possible changes in the Company’s capital structure in connection with the transaction, and whether funds may
be raised contemporaneously with the transaction. Therefore, we believe such costs are unascertainable until the Company identifies a
business combination target. These conditions raise substantial doubt about our ability to continue as a going concern. The Company is
currently devoting its efforts to locating merger candidates. The Company’s ability to continue as a going concern is dependent
upon our ability to develop additional sources of capital, locate and complete a merger with another company, and ultimately, achieve
profitable operations.
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.
Emerging Growth Company
As an “emerging growth company” under
the JOBS Act, the Company has elected to use the extended transition period for complying with new or revised accounting standards under
Section 102(b)(1) of the JOBS Act. This election allows us to delay the adoption of new or revised accounting standards that have different
effective dates for public and private companies until those standards apply to private companies. As a result of this election, our financial
statements may not be comparable to companies that comply with public company effective dates.
Fiscal Year
Our fiscal year ends on December 31.
11
Item 7A. Quantitative and Qualitative Disclosures
about Market Risk.
As a “smaller reporting company” defined
by Item 10 of Regulation S-K, the Company is not required to provide the information required by this Item.
Item 8. Financial Statements and Supplementary
Data.
Please see the financial statements beginning
on page F-1 located in this Annual Report on Form 10-K and incorporated herein by reference.
Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure.
There are not and have not been any disagreements
between the Company and its accountants on any matter of accounting principles, practices or financial statement disclosure.
Item 9A. Controls and Procedures. Disclosure
Controls and Procedures
Disclosure controls are procedures that are designed
with the objective of ensuring that information required to be disclosed in our reports filed under the Exchange Act, such as this Form
10-K, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure
controls are also designed with the objective of ensuring that such information is accumulated and communicated to our management, including
the Principal Executive Officer and Principal Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
As the Company is a shell company with no or nominal business operations, Mr. Jacobs would immediately become aware of matters that would
require disclosure under the Exchange Act.
In connection with the preparation of this Form
10-K, management, with the participation of our Principal Executive Officer and Principal Financial Officer, has evaluated the effectiveness
of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e) and 15d-15(e)). Based
on that evaluation, our Principal Executive and Financial Officer concluded that our disclosure controls and procedures were effective,
as of the end of the period covered by this Form 10-K.
Management’s Annual Report on Internal
Control over Financial Reporting
Our management is responsible for establishing
and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange
Act. Our internal control system was designed to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes, in accordance with generally accepted accounting principles. Because of inherent
limitations, a system of internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation
of effectiveness to future periods are subject to the risk that controls may become inadequate due to change in conditions, or that the
degree of compliance with the policies or procedures may deteriorate.
This Annual Report on Form 10-K does not include
an attestation report of our independent registered public accounting firm, regarding internal controls over financial reporting. Our
internal control over financial reporting was not subject to such attestation as we are a “smaller reporting company” as defined
by Item 10 of Regulation S-K.
Changes in Internal Controls over Financial
Reporting
There have been no changes in our internal control
over financial reporting identified in connection with the evaluation required by paragraph (d) of Rule 13a-15 or 15d-15 under the Exchange
Act that occurred during the period covered by this 10-K that has materially affected, or is reasonably likely to materially affect, our
internal control over financial reporting.
Limitations of the Effectiveness of Control
A control system, no matter how well conceived
and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent
limitations of any control system, no evaluation of controls can provide absolute assurance that all control issues, if any, within a
company have been detected.
Item 9B. Other Information.
None.
12
PART III
Item 10. Directors, Executive Officers and
Corporate Governance.
Our officers and directors and additional information
concerning them are as follows:
Name Age Position(s)
Mark Tompkins 58 Director
Ian Jacobs has served as the Company’s
President, Secretary, Chief Executive Officer, Chief Financial Officer and Director since inception. Mr. Jacobs has also served as President,
Secretary, Chief Executive Officer, Chief Financial Officer, and as a Director of Patricia Acquisition Corp. and Parc Investments Inc.
since November 9, 2020, and August 21, 2020, respectively. Mr. Jacobs previously served as the President, Secretary, Chief Executive Officer,
Chief Financial Officer and Director of Max-1 Acquisition Corporation, now known as Exicure, Inc., from February 2017 until September
2017, of Lola One Acquisition Corporation, now known as Amesite Inc., from April 2017 until April 2018, of Peninsula Acquisition Corporation,
now known as Transphorm, Inc., from June 2017 to February 2020, of Olivia Ventures, Inc., now known as Compass Therapeutics, Inc., from
March 2018 to June 2020, of Malo Holdings Corporation, now known as Augmedix, Inc., from December 2018 through October 2020, and of Parasol
Investments Corporation, now known as SmartKem, Inc., from May 2020 through February 2021. Mr. Jacobs has also been an associate
of Montrose Capital Partners Limited, or Montrose Capital, since 2008. Montrose Capital is a privately held company, which focuses on
identifying public markets venture capital investment opportunities in high growth early stage companies. Montrose Capital is a sector
agnostic privately held firm which has identified and invested, through its principal owners, in a wide spectrum of global industries,
including in biotechnology, specialty pharmaceuticals, medical devices, robotics, and technology. Mr. Jacobs received a B.S. in Finance
from the University of South Florida. Mr. Jacobs’ past experience identifying investment opportunities and investing in early stage
companies will be beneficial to the Company as its seeks to identify a business combination target which led to the conclusion that he
should serve as a director of the Company.
Mark Tompkins has served as a Director
of the Company since inception. Mr. Tompkins has also served as a Director of Patricia Acquisition Corp. and Parc Investments Inc. since
November 9, 2020, and August 21, 2020, respectively. Mr. Tompkins previously served as a Director of Max-1 Acquisition Corporation, now
known as Exicure, Inc., from February 2017 until September 2017, of Lola One Acquisition Corporation, now known as Amesite Inc., from
April 2017 until April 2018, of Peninsula Acquisition Corporation, now known as Transphorm, Inc., from June 2017 to February 2020, of
Olivia Ventures, Inc., now known as Compass Therapeutics, Inc., from March 2018 to June 2020, of Malo Holdings Corporation, now known
as Augmedix, Inc., from December 27, 2018 through October 5, 2020, and of Parasol Investments Corporation, now known as SmartKem, Inc.,
from May 2020 through February 2021. Mr. Tompkins is a founder of Montrose Capital and has served as its President since its inception
in 2001. Montrose Capital is a privately held company, which focuses on identifying public markets venture capital investment opportunities
in high growth early stage companies. Montrose Capital is a sector agnostic privately held firm which has identified and invested, through
its principal owners, in a wide spectrum of global industries, including in biotechnology, specialty pharmaceuticals, medical devices,
robotics, and technology. Mr. Tompkins’ past experience identifying investment opportunities and investing in early stage companies
will be beneficial to the Company as its seeks to identify a business combination target which led to the conclusion that he should serve
as a director of the Company.
Significant Employees
None.
Family Relationships
None.
Involvement in Certain Legal Proceedings.
There have been no events under any bankruptcy
act, no criminal proceedings and no judgments, injunctions, orders or decrees material to the evaluation of the ability and integrity
of any director, executive officer, promoter or control person of the Company during the past ten years.
13
Committees
The Company does not have any standing committees.
Conflicts of Interest
There are no binding guidelines or procedures
for resolving potential conflicts of interest. Failure by management to resolve conflicts of interest in favor of the Company could result
in liability of management to the Company. However, any attempt by stockholders to enforce a liability of management to the Company would
most likely be prohibitively expensive and time consuming.
Code of Ethics
The Company, as of this time, has not adopted
a Code of Ethics pursuant to rules described in Regulation S-K. The Company has two persons who are the only stockholders and who serve
as the directors and officers. The Company has no operations or business and does not receive any revenues or investment capital. The
adoption of a Code of Ethics at this time would not serve the primary purpose of such a code to provide a manner of conduct as the development,
execution and enforcement of such a code would be by the same persons and only persons to whom such code applied. Furthermore, because
the Company does not have any activities, there are no activities or transactions which would be subject to this code. At the time the
Company enters into a business combination, the current officers and directors will recommend to any new management that such a code be
adopted. The Company does not maintain an Internet website on which to post a code of ethics.
Corporate Governance
For reasons similar to those described above,
the Company does not have a nominating nor audit committee of the board of directors. At this time, the Company consists of two stockholders
who serve as the corporate directors and officers. The Company has no activities, and receives no revenues. At such time that the Company
enters into a business combination and/or has additional stockholders and a larger board of directors and commences activities, the Company
will propose creating committees of its board of directors, including both a nominating and an audit committee. Because there are only
two stockholders of the Company, there is no established process by which stockholders to the Company can nominate members to the Company’s
board of directors. Similarly, however, at such time as the Company has more stockholders and an expanded board of directors, the new
management of the Company may review and implement, as necessary, procedures for stockholder nomination of members to the Company’s
board of directors.
Item 11. Executive Compensation.
The following table sets forth the cash and other
compensation paid by the Company to its named executive officer and directors during the period from inception (November 9, 2020) through
the date of this filing.
Name and Position Year Salary Bonus Option Awards All other Compensation Total
Ian Jacobs(1) 2021 None None None None None
Mark Tompkins(2) 2021 None None None None None
Director 2020 None None None None None
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The following compensation discussion addresses
all compensation awarded to, earned by, or paid to the Company’s named executive officers. The Company’s officer and directors
have not received any cash or other compensation since inception through the date of this filing. No compensation of any nature has been
paid for on account of services rendered by an officer or director in such capacity.
It is possible that, after the Company successfully
consummates a business combination with an unaffiliated entity, that entity may desire to employ or retain members of our management for
the purposes of providing services to the surviving entity.
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.
Except as otherwise disclosed herein, there are
currently no understandings or agreements regarding compensation our management will receive after a business combination.
Compensation Committee
The Company does not have a standing compensation
committee or a committee performing similar functions.
Item 12. Security Ownership of Certain Beneficial
Owners and Management and Related Stockholder Matters.
The following table sets forth, as of the date
of this filing, the number of shares of Common Stock owned of record and beneficially by (i) each person known by us to be the beneficial
owner of more than 5% of our outstanding shares of Common Stock, (ii) each director and named executive officer of the Company and (iii)
all executive officers and directors as a group.
Name and Address Amount and Nature of Beneficial Ownership Percentage of Class
Directors and Named Executive Officers:
App 1, Via Guidino 23
Switzerland
All Directors and Officers as a Group (2 individuals) 5,000,000 100 %
Other More than 5% Stockholders:
N/A - -
(1) Mark Tompkins serves as a director of the Company.
Securities Authorized for Issuance Under Equity
Compensation Plans
The Company has not authorized any securities
for issuance under an equity incentive plan.
15
Item 13. Certain Relationships and Related
Transactions, and Director Independence.
On November 13, 2020, the Company issued (i) an
aggregate of 4,750,000 shares of Common Stock to Mark Tompkins, a director of the Company, for an aggregate purchase price equal to $475
representing amounts advanced by Mr. Tompkins to counsel for the Company in connection with the formation and organization of the Company
and (ii) an aggregate of 250,000 shares of Common Stock to Ian Jacobs, an officer and director of the Company, for an aggregate cash purchase
price equal to $25, pursuant to the terms and conditions set forth in the Common Stock Purchase Agreement with each person. The Company
issued these shares of Common Stock under the exemption from registration provided by Section 4(a)(2) of the Securities Act.
On November 13, 2020, in connection with advances
made in connection with costs incurred by the Company, the Company issued a promissory note to Mark Tompkins, a stockholder and director
of the Company, pursuant to which the Company agreed to repay Mr. Tompkins the sum of any and all amounts that Mr. Tompkins may advance
to the Company on or before the date that the Company consummates a business combination with a private company or reverse takeover transaction
or other transaction after which the Company would cease to be a shell company (as defined in Rule 12b-2 under the Exchange Act). The
Company has used the proceeds from the note to cover its expenses. Although Mr. Tompkins has no obligation to advance funds to the Company
under the terms of the note, it is anticipated that he may advance funds to the Company as fees and expenses are incurred in the future.
As a result, the Company issued the note in anticipation of such advances. Interest shall not accrue on the outstanding principal amount
of the note except if an Event of Default (as defined in the note) has occurred. In the event of an Event of Default, the entire note
shall automatically become due and payable (the “Default Date”), and starting from five (5) days after the Default Date, the
interest rate on the note shall accrue at the rate of eighteen percent (18%) per annum. As of December 31, 2020, the total amount due
under the note was $22,500.
The Company currently uses the office space and
equipment of its management at no cost.
Item 14. Principal Accounting Fees and Services.
Raich Ende Malter & Co. LLP is the Company’s
independent registered public accounting firm. Set below are aggregate fees billed by Raich Ende Malter & Co. LLP for professional
services rendered from inception to December 31, 2020.
Audit Fees
The fees for the audit services billed and to
be billed by Raich Ende Malter & Co. LLP from inception to December 31, 2020, amounted to $11,000.
Audit-Related Fees
There were no audit-related fees billed by Raich
Ende Malter & Co. LLP from inception to December 31, 2020.
Tax Fees
The fees for the tax services billed and to be
billed by Raich Ende Malter & Co. LLP for professional services for tax compliance, tax advice, and tax planning from inception to
December 31, 2020, amounted to $2,000.
All Other Fees
There were no fees billed by Raich Ende Malter
& Co. LLP for other products and services from inception to December 31, 2020.
Audit Committee’s Pre-Approval Process
The Company does not have a standing audit committee
or a committee performing similar functions.
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PART IV
Item 15. Exhibits, Financial Statement Schedules.
We have filed the following documents as part
of this Form 10-K:
1. Financial Statements:
Page No.
Report of Independent Registered Public Accounting Firm F-2
Balance Sheet as of December 31, 2020 F-3
Notes to Financial Statements F-7
2. Financial Statement Schedules
All schedules have been omitted because they are
not required, not applicable, not present in amounts sufficient to require submission of the schedule, or the required information is
otherwise included
17
3. Exhibits
Exhibit No. Description
101.INS* XBRL Instance Document
101.SCH* XBRL Taxonomy Extension Schema Document
101.CAL* XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF* XBRL Taxonomy Extension Definition Linkbase Document
101.LAB* XBRL Taxonomy Extension Label Linkbase Document
101.PRE* XBRL Taxonomy Extension Presentation Linkbase Document
* Filed herewith
** Furnished herewith
Item 16. Form 10-K Summary.
Not applicable.
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SIGNATURES
Pursuant to the requirements of Section 13 or
15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
LAFFIN ACQUISITION CORP.
Dated: April 28, 2021 By: /s/ Ian Jacobs
Ian Jacobs
President and Chief Executive Officer
Pursuant to the requirements of the Securities
Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and
on the dates indicated.
Name Title Date
By: /s/ Mark Tompkins Director April 28, 2021
Mark Tompkins
19
Laffin
Acquisition Corp.
December 31, 2020
INDEX TO FINANCIAL STATEMENTS
Statement Page
Index to Financial Statements F-1
Report of Independent Registered Public Accounting Firm F-2
Balance Sheet as of December 31, 2020 F-3
Notes to Financial Statements F-7
F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
To the Board of Directors and
Stockholders of Laffin Acquisition Corp.
Opinion on the Financial Statements
We have audited the accompanying balance sheet
of Laffin Acquisition Corp. (the “Company”) as of December 31, 2020, and the related statements of operations, changes in
stockholders’ deficit, and cash flows for the period from November 9, 2020 (inception) through December 31, 2020, and the related
notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in
all material respects, the financial position of the Company as of December 31, 2020, and the results of its operations and its cash flows
for the period from November 9, 2020 (inception) through December 31, 2020, in conformity with accounting principles generally accepted
in the United States of America.
Going Concern
The accompanying financial statements have been
prepared assuming that the Company will continue as a going concern. As discussed in Note 6 to the financial statements, the Company has
incurred losses from inception, has negative working capital, and a stockholders’ deficit that raise substantial doubt about its
ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 6. The financial
statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility
of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our
audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance
with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the
standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged
to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding
of internal control over financial reporting, 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.
Our audit included performing procedures to assess
the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond
to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating
the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
/s/ Raich Ende Malter & Co. LLP
We have served as the Company’s auditor since 2020.
Melville, New York
April 9, 2021