U.S.
SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10
Amendment Number 5
GENERAL
FORM FOR REGISTRATION OF SECURITIES
Pursuant
to Section 12(b) or (g) of the Securities Exchange Act of 1934
Commission
file number: 000-56457
Livento
Group, Inc.
(Exact
name of registrant as specified in its charter)
| Nevada |
|
46-3999052 |
| (State
or other jurisdiction of |
|
(I.R.S.
Employer |
| incorporation
or organization) |
|
Identification
No.) |
Registrant’s
Principal Office
17
State Street, New York, New York 10004
Registrant’s
telephone number, including area code:
+1(980)432-8241
Securities
to be registered under Section 12(b) of the Act: None
Securities
to be registered under Section 12(g) of the Exchange Act: Common Stock, $0.0001 per share
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,”
“smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large
accelerated filer ☐ |
Accelerated
filer ☐ |
| Non-accelerated
filer ☐ |
Smaller
reporting company ☒ |
| Emerging
Growth Company ☐ |
|
EXPLANATORY
NOTE
We
are filing this General Form for Registration of Securities on Form 10 to register our common stock, par value $0.0001 per share (the
“Common Stock”), pursuant to Section 12(g) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
This
registration statement was deemed effective
on September 10, 2022 and we are now subject to the requirements of Regulation 13A under the Exchange Act, which requires
us to file annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K. We are be required
to comply with all other obligations of the Exchange Act applicable to issuers filing registration statements pursuant to Section 12(g)
of the Exchange Act. We intend to file a Quarterly Report on Form 10-Q for our quarter ended September 30, 2022. Because Securities
and Exchange Commission staff comments remain unresolved as to this registration statement, there is a possibility that any form we file
under the Exchange Act will require amendment(s) in conformity with the resolution of such comments. Restatements or amendments to information
in such reports could theoretically result in liability to the Company, but management does not believe this risk is material.
Unless
otherwise noted, references in this registration statement to the “Company,” “Livento,” “we,” “our,”
or “us” means Livento Group, Inc. Our principal place of business is located at 17 State Street, 10004 New York, and our
telephone number is 908 432 8241.
Livento
Group, Inc. is a Nevada corporation founded in 2013, previously specializing in developing and marketing a diverse line of proprietary
stem cell-based products. The Company became inactive in 2017 and, in March 2022, acquired Livento Group LLC (“Livento”),
which resulted in a change in its business model. In June 2022, we changed our name to Livento Group, Inc. Livento now operates in three
primary sectors; film and television production, software development, and real estate projects.
Management
believes that the movie and television production, software development, and marketing lines present a stable business model with high
growth potential. We are filing this Form 10 to ensure our shareholders’ liquidity in their shares going forward. We are also filing
this Form 10 to overcome the impediments to shareholder liquidity resulting from being a “Shell Company.” However, we cannot
give assurance that we will achieve these goals.
FORWARD-LOOKING
STATEMENTS
There
are statements in this registration statement that are not historical facts. These “forward-looking statements” can be identified
by the use of terminology such as “believe,” “hope,” “may,” “anticipate,” “should,”
“intend,” “plan,” “will,” “expect,” “estimate,” “project,” “positioned,”
“strategy” and similar expressions. You should be aware that these forward-looking statements are subject to risks and uncertainties
beyond our control. To discuss these risks, you should read this entire registration statement carefully, especially the risks discussed
under the “Risk Factors” section. Although management believes that the assumptions underlying the forward-looking statements
included in this registration statement are reasonable, they do not guarantee our future performance, and actual results could differ
from those contemplated by these forward-looking statements. The assumptions used for purposes of the forward-looking statements specified
in the following information represent estimates of future events and are subject to uncertainty as to possible changes in economic,
legislative, industry, and other circumstances. As a result, the identification and interpretation of data and additional information
and their use in developing and selecting assumptions from and among reasonable alternatives require the exercise of judgment. To the
extent that the assumed events do not occur, the outcome may vary substantially from anticipated or projected results. Accordingly, no
opinion is expressed on the achievability of those forward-looking statements. In light of these risks and uncertainties, there can be
no assurance that the results and events contemplated by the forward-looking statements contained in this registration statement will
transpire. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates. We
do not undertake any obligation to update or revise any forward-looking statements.
Item
1. Business.
Prior
Operations
ORGANIZATIONAL
HISTORY
We
were incorporated in the State of Nevada on October 30, 2013, under the name “Bling Marketing, Inc.”. Until December 29,
2014, we were a wholesaler of jewelry, principally earrings, rings, and pendants (“BMI Business”). We recognized a minimal
amount of sales from operations before the three months ending June 30, 2014, and were accordingly classified as a shell company. During
the three-month ended June 30, 2014, we began working with several distributors to sell our jewelry products to retail outlets and, as
a result, recognized sales revenue of $22,025 during the said period. On September 11, 2014, we filed a Current Report on Form 8-K indicating
that we were no longer a shell company as defined by Rule12b-2 of the Exchange Act in light of our operations through the quarter that
ended June 30, 2014.
On
December 26, 2014, we entered into an Agreement and Plan of Merger (“Nugene Merger Agreement”) with NuGene Inc., a California
corporation (“NuGene”). On December 29, 2014 (the “Closing Date”), we filed a certificate of merger in the State
of California whereby our subsidiary, NG Acquisition Inc. (“Acquisition Sub”), merged with NuGene. As a result, NuGene, the
surviving entity, became our wholly owned subsidiary. The transaction under the Nugene Merger Agreement was deemed to be a reverse merger,
whereby the Company (the legal acquirer) is considered the accounting acquiree and NuGene is considered the accounting acquirer, and
NuGene (the legal acquiree) is considered the accounting acquirer. The assets, liabilities, and operations of the acquired entity, NuGene,
were brought forward at their book value, and no goodwill was recognized.
In
connection with the NuGene Merger Agreement, we entered into a Business Transfer and Indemnity Agreement dated December 29, 2014 (the
“Indemnity Agreement”) with our former Chief Executive Officer and Director, Dena Kurland providing for:
| |
1. |
The
transfer of our jewelry business operations existing on the date of the Indemnity Agreement (the “BMI Business”); |
| |
2. |
The
assumption by Ms. Kurland of all liabilities of our Company and the indemnification by Ms. Kurland holding our Company harmless for
any and all liabilities arising at or before the date of the Indemnity Agreement; |
| |
3. |
The
payment by NuGene to Ms. Kurland of $350,000 in cash; and |
| |
4. |
The
surrender by Ms. Kurland of 15,000,000 shares (before giving effect to the Stock Split discussed below) (the “Indemnity Shares”)
of our Company’s common stock representing 95% of the then outstanding common stock (all of which shares have been deemed cancelled
by the Company). |
Pursuant
to the terms of the Nugene Merger Agreement, 26,052,760 shares of Company common stock and 1,917,720 Company a newly designated Series
A Preferred Stock were issued to the former NuGene shareholders. The Series A Preferred Stock was: (i) initially convertible into common
stock at a ratio of one to one, (ii) as long as there were a minimum of 900,000 shares of Series A Preferred Stock outstanding, the holders
of the Series A Preferred Stock had the right to elect a majority of the board of directors and (iii) the holders of the Series A Preferred
Stock, generally voting as a class with the holders of common stock, had for each share of Series A Preferred Stock three times the number
of votes permitted to each share of common stock.
On
December 26, 2014, our board of directors approved a 15.04 to one stock split (“Stock Split”) in the form of a stock dividend
to holders of our common stock as of that date. To affect that board action, each recipient of the stock dividend would receive 14.04
additional shares of common stock for every share of common stock held.
On
December 29, 2014, we completed the sale of 2,000,000 shares of our common stock to 18 purchasers (“Stock Placement”) for
proceeds totaling $2,000,000, including (a) $1,625,000 of cash and (b) automatic conversion of promissory notes in the principal amount
of $375,000.
NuGene
was incorporated in California in December 2006 and formed and funded by our founders, Ali Kharazmi and Mohammed Kharazmi, M.D. The initial
focus of NuGene was to develop and market customized skin care products. As part of that focus, NuGene sought to leverage the working
relationships developed by our founders with the plastic surgery community. NuGene directed significant time and resources on developing
anti-aging and scar treatment/reduction products.
In
2007 Nugene continued to focus on “age-defying” products utilizing peptide complexes (see further description below)
and nano-encapsulation for absorption into the skin (see additional description below). We introduced a limited product line under
the NuGene name and co-branded the products with an affiliated entity, Genetic Institute of Anti-Aging, Inc. (“GIAA”), which
the Kharazmi owned. We utilized the services of a Korean-based contract manufacturer to supply our products. This product line (the “GIAA
Line”) was based on peptides and did not utilize stem cells. We had very modest sales in 2007, with our sole customer GIAA, a related
party.
In
2008 we stopped production of the GIAA Line, and sales were limited to selling the remaining inventory through medical offices and GIAA.
With the GIAA Line discontinued, we spent the remainder of 2008 considering different formulations and methodologies for improved anti-aging
products.
In
2009 and 2010, we had limited activity and minimal sales. Our sales were mainly overseas and limited to the remaining inventory of the
GIAA Line. We continued to explore how we might advance our formulations and methodologies. We expended funds on research and development,
carried out mainly by scientists engaged by the Company.
In
2011 our founders decided to use adult adipose human stem cells (undifferentiated cells found throughout the body that multiply by cell
division to replenish dying cells and regenerate tissues) as the foundation of the formulation for its products. In 2011 the Company
developed a proprietary process to extract human adult stem cells from fat cells that the Company then used in its customized NuGene
line explicitly made for those client(s). Throughout 2011 we continued to provide autologous, or mature, fat-derived stem cells for use
in clinical procedures utilizing this technology. Through this process, the Company refined its ability to culture adult human stem cells
to render human-conditioned stem cell media at a proprietary concentration, a primary ingredient in the NuGene line of cosmeceuticals.
The Company believes that this proprietary concentration, combined with our unique formulations, will provide NuGene with a significant
competitive advantage.
In
2012 we completed our initial line of cosmeceutical products based on these adipose-derived stem cells. We branded this advanced skincare
line solely under the NuGene name (the “NuGene Line”). We eliminated the unpleasant odor associated with stem cells by adding
a fragrance with a very low incidence of allergic reaction. The packaging of this new product line bears no resemblance to the prior
GIAA Line. We also manufactured the NuGene Line ourselves at a small laboratory facility that we leased from an affiliated entity owned
by one of our founders.
Throughout
2013 we continued to expand the product offerings of the NuGene Line. The Company focused its stem cell work on surgical and orthopedic
regeneration. These services were delivered to one client, which was an affiliated entity. Sales of the NuGene Line were limited as we
were in an initial rollout and branding phase.
During
2014, we focused our efforts on transitioning to a cosmeceutical skincare business for mass distribution. With this transition and expanded
attention to our consumer products, we sought to develop our marketing plan and distribution channels. By the end of 2014, we had wholesalers
distributing products from the NuGene Line to medical offices and medical spas throughout the United States. December 31, 2014, we had
about 50 locations selling our products. In addition to the NuGene Line, we generated revenues from an affiliate, Advanced Surgical Partners
(“ASP”), which is also owned by our CEO and Chairman of the Board, Messrs. Ali and Mohammed Kharazmi, respectively. Revenues
generated from ASP resulted from NuGene providing Plasma Rich Platelet and Stem Cell injections for orthopedic and plastic surgery procedures
to ASP. We provided these products and services to ASP as we transitioned into commercializing our cosmeceutical product lines. We expect
further to minimize these product sales and services to ASP in early 2015.
Our
target customers primarily consisted of middle-aged men and women concerned with their aging skin and hair loss. Although our distributors
were primarily west of the Mississippi River, our products were sold throughout the United States.
By
2017, our cosmeceutical skincare business had been discontinued as we could not obtain financing for operations on reasonable terms and
became inactive. Our corporate charter was revoked in Nevada.
On
January 26, 2020, Emergent, LLC (“Emergent”), a Nevada LLC controlled by Milan I Hoffman, was appointed the custodian of
the Company and proceeded to revive the Company’s existence and resolve its outstanding indebtedness. This was completed as to
all indebtedness except for one convertible rate promissory note of $120,000. See Litigation. In March, 2022, Ms. Hoffman sold
her Series A Preferred stock in the Company and certain shares of Series C Preferred Stock to Livento Group, LLC. Also in March 2022,
David Stybr, our CEO and the sole owner of Livento Group, LLC, agreed to contribute Livento Group, LLC to the Company in exchange for
a transfer to him of the Series A Preferred Stock which gave Mr. Stybr voting control of the Company. The Series C Preferred Stock purchased
by Livento Group, LLC was cancelled. As a result of these transactions our current operations are the operations of Livento Group,
LLC.
Livento
Group operations started in 2017 as the internal team spearheaded the development of financial management software based on artificial
intelligence for investment entities. This software currently provides several clients with data processing and analytical services in
the investment management sector. Management believes that this segment of our operations will provide meaningful revenue, but we can
give no assurance that this will happen. The product is best described as an automated system that can analyze large quantities of data,
focusing on selected parameters and predicting short-term future behavior within a specific portfolio of selected assets. The software
chooses assets with the highest potential based on a set of specifications and properties, predicting short-term future behavior within
a particular portfolio.
In
2020 the Company acquired land for a residential real estate development project, amounting to 4 million USD, with a completion target
of late 2022. The property is being developed into 16 residential condominiums in a suburb of Prague in the Czech Republic, and all of
the condominium units have signed purchase agreements totaling 12 million. The development cost was approximately 3 million USD. Accordingly,
the gross profits from this project (not counting carrying costs) will be about 5 million USD. The Company had one more real estate project
in the planning phase but planned to sell it and not develop the property further. The Company invested in a residential project total
amount of around 825,000 USD and is currently looking for a buyer. We have had discussions with three potential buyers and expect
to finalize a contract of sale by the end of 2022, but can give no assurances that this will occur or that any sale of this
project will prove profitable. We do not have any further plans to engage in additional real estate development projects.
Present
Operations
The
Company established on the 17th of June 2022 its own film and television production subsidiary, BOXO Productions, Inc., a
Delaware corporation (“BOXO”), which was previously a division of Livento in operation since 2020, where we meet with
top film and movie producers. BOXO’s business model is strongly oriented toward the growing demand for content to fill cinemas
after COVID19 and the expansion of online content distributors. BOXO Productions will hold all assets related to Company’s business
in movies in the future and currently doesn’t employ any personnel. In most of its projects, BOXO is not primarily dependent on
the movie’s success, as a distributor pays it before the film is finalized and receives a share of the revenue from cinemas’
box office and home sales. BOXO plans to produce up to 6 movies and 12 television productions during 2022. BOXO also intends to participate
in other films based on management’s assessment of their potential success in cinemas already in the post-production phase. BOXO
will focus on negotiating distribution agreements that provide for its sharing in the box office sales of these movies. Scripts are chosen
by BOXO’s production team, which regularly receives offers from authors commonly involved in the film industry. BOXO may acquire
movie or television rights in various stages of development. Less frequently, BOXO receives offers for participating in a project’s
post-production phase. BOXO finances movies via internal resources, loans, and investors depending on the project’s state of development
and the Company’s cash position.
BOXO
started in 2022 production of three movies, Carnival of Killers, Wash Me in the River and Running Wild. These projects received an initial
investment from Livento of USD 400,000 each. Two of these projects, Carnival of Killers and Running Wild are expected to enter the development
stage of production competed in summer 2023 and filming and postproduction should end during 4Q 2024. Movie Wash Me in the River is in
the post-production stage now and will be released in Q4 of 2022 or Q1 of 2023.
We
are in early stages of producing other movies that will be announced during Q4 2022 or Q1 2023 once all the relevant agreements are finalized.
The
team has been involved either as producers, executive producers, or agents over the years on the following movies, which have been aired
both in theaters and streaming services such as Netflix, Prime Video, Paramount, and Disney Plus:
| |
● |
The
Misfits; a 2021 Action/Thriller featuring Pierce Brosnan |
| |
● |
Packaging
of Ironman movie |
| |
● |
Black
Swan; a 2010 Drama/Thriller featuring Natalie Portman, Mila Kunis, Winona Ryder, and Vincent Cassel |
| |
● |
Extremely
Wicked, Shockingly Evil and Vile; a 2019 Crime/Drama featuring John Malkovich and Zac Efron |
| |
● |
Marley
& Me; a 2008 Comedy/Drama featuring Jennifer Aniston and Owen Wilson |
| |
● |
The
Last Full Measure; a 2019 War/Drama featuring Samuel L. Jackson and Ed Harris |
| |
● |
Worth;
a 2020 Drama featuring Michael Keaton and Stanley Tucci Jr. |
| |
● |
American
Traitor: The Trial of Axis Sally; a 2021 Drama that features Al Pacino |
| |
● |
Best
Sellers; a 2021 Drama/Comedy featuring Michael Caine and Cary Elwes |
Currently,
the Company’s primary focus is the activities of BOXO Productions. As previously mentioned, new movies and television productions
are started monthly, with the target being six movies this year. The Company will use the proceeds
of the condominium sales to fund the activity and operations of BOXO.
The
BOXO team is comprised of three consultants that have been in the production business for last 20 – 30 years and has experience
with large productions as the above mentioned examples. They have together worked on approximately 300 movie projects over the years.
The
Company does not plan to continue in its real estate activities, is finalizing its current projects, and will not pursue
new opportunities in this segment. The last remaining project, Thunder, was a proposed 52 unit condominium apartment building in Prague.
We had an option to purchase the parcel for the construction of the project, but allowed the option to lapse. The parcel remains available
and the project now which consists of budget, architectural drawings, and project plans. We will endeavor to sell the project hopefully
during last quarter of 2022, but can give no assurance that we will be successful in those efforts. Any buyer needs to secure the land
and hire construction company to build the project. Any proceeds from the sale of this project will be added to our general working capital.
Trends
in the Our Markets
Management
believes that the entertainment industry is experiencing structural changes. COVID19 changed the movie distribution business and offered
new business models and potential growth to participants who provide apps and streaming content directly to consumers through the Internet.
Based on management’s analysis of recent market statistics and trends, we believe these models have become dominant trends in this
market segment.
Management
also believes that these trends will continue and that there is a large market for BOXO’s films and television productions. The
movie production market has expanded significantly in the last two years and is likely to continue growing significantly in the coming
years. Management has observed that online streaming platforms continually require new content, and an increased number of connected
devices will likely result in more customers using these services. In the next few years, many developed and emerging nations will add
new customers to the network.
The
Company has internally developed software called “Elisee” that can capture large amounts of data and create predictive behavior
based on client inputs that assist the client in establishing its investment portfolio. Successfully building an equity portfolio is
not simple since one must consider the future of particular industries and the companies within them. Retail investors and Family Offices
lack complex historical data, and this is where Elisee excels. This data has been acquired from Dow Jones and other public sources and
dissected and analyzed. We believe in diversification but place more emphasis on those industries and companies with a more promising
outlook based on guidance from Elisee. Management believes each potential customer’s financial situation and investment needs are
unique. We see the constant shift of the world’s financial markets, real estate prices, CPI data, and effective portfolio management
as the key to success.
Elisee,
our software product, uses algorithms that read
market data and neurological network abilities to determine the best path forward and make ongoing corrections over time. The main idea
is based on reducing risk by investing in several assets. Investors should approach assets individually and carefully assemble them into
their portfolios. When creating an optimal portfolio, Elisee constantly measures two factors. The first factor is a parameter expressing
potential profitability, and the second parameter represents risk. It is necessary to consider the riskiness of the individual assets
in the portfolio, their mutual covariance, or their mutual correlation to calculate the risk of the entire portfolio. Covariance expresses
the extent to which two investment instruments move in the same direction at a specific time.
Our
competitors are other A.I. database and algorithm programming companies delivering services to clients like banks and asset managers.
Elisee is diversification tool. As software service, Elisee does not have to comply with regulatory requirements, and management believes
that its database optimization tool, with some additional work could predict weather or traffic.
The
investor could create his portfolio from all the points in the picture. But only points E, N, and J form an admissible set suitable for
the investor. This set is also bounded by the efficient frontier, characterized by the rational investor choosing only those portfolios
that offer the maximum expected return for the specified amount of risk. And at the same time, he chooses a portfolio that provides him
the minimum risk for the given amount of expected return. If the investor chooses point E, he can no longer create a better mix of stocks
in his portfolio. If an investor establishes a portfolio from any combination lying on the efficient frontier, it will be the best possible
portfolio combination in the given situation.
We
identified this as a unique opportunity to support several companies with different needs and to aid them in their asset selection process.
We developed our system that can read large amounts of data and run portfolio analyses on these assets, providing improved portfolio
management and performance.
The
system’s development commenced in early 2018, and the first version took one year of development and testing with various basic
data sets. Currently, Livento has a team of three analysts who focus on the maintenance and further development of the system. We are
continually developing and improving our software, making it more robust, stable, and capable of supporting an increased number of asset
classes.
Key
summary of points:
| |
● |
Elisee
was developed and tested over four years. |
| |
● |
Elisee
has had a successful and profitable track record for three years. |
| |
● |
Elisee
can process 1 TB of data in 1 hour. |
| |
● |
Elisee
uses neurological network algorithms to determine and analyze large data portions. |
Marketing
Strategy
Our
marketing strategy comprises the following components; social media (Twitter, LinkedIn, FB, etc.), PR and video communications, and a
personal approach. The strategy differs based on the product offered. They may be described as follows:
Social
media:
The
BOXO brand is currently. We can rapidly, quickly, and reliantly inform all stakeholders about necessary and relevant news. We use promotional
posts to gain company followers.
PR
and video communications:
A
professional IR agency was hired to write our PR communications, arrange interviews with Management, write articles, and introduce them
via different channels to the media. Video interviews and conference attendance are also planned for more prominent investors’
involvement.
Personal
approach:
Our
software uses a direct and personal approach via different marketing channels, including social networks, industry liaisons, and articles
in specialized magazines.
Employees
We
currently have eleven employees and consultants. Three of our employees are specialized in Elisee development, three are engaged in Financial
Management, and two are involved in administrative positions. The remaining employees are engaged in various management positions. We
anticipate hiring additional employees or consultants over the next three months to support the growth of BOXO. None of our employees
are covered by a collective bargaining agreement.
Competition
BOXO
competes with other production companies focused on movies and online streaming platforms. Our main market advantage is direct contact
via the producer team to top Hollywood icons, including well-known producers, directors, actors, and distribution companies that pay
BOXO before the film is finalized.
The
competition to our software is other software products performing similar functions. We differentiate ourselves in specializing and providing
a proven track record in several specific market segments, where we can offer predictive behavior of assets with and without our decision-making
process.
In
all aspects of our business, we face competition from companies with more significant resources than we have, but we have gradually and
consistently grown despite this.
Facilities
We
currently occupy space within serviced office suites in New York City and Prague in the Czech Republic. Since our employees and consultants
work virtually, we believe this arrangement is adequate for us and allows us to operate at a very low cost. In the future, if we require
more office space, we will acquire appropriate quarters within which to operate.
Item
1A. Risk Factors.
An
investment in the Company is highly speculative and involves a high degree of risk.
Risks
Related to our Business
We
have limited resources and We may not be able to raise additional capital as it is needed to fund our operations and planned increased
investment levels.
We
operated at a net income of $137,491 for the period ended September 30, 2022, in addition to our cash resources, which
were about $105,757 on September 30, 2022, which are inadequate to execute our growth plans, but should allow us to operate
at current levels. We are dependent upon the additional investment of which there can be no assurance and the proceeds of the
sale of our real estate assets to increase our participation as an investor in BOXO projects.
Cybersecurity
Our
movie projects and Elisee software are stored online and thus are subject to potential thread of cybersecurity. We maintain data in clouds
that are highly protected and we use firewall and antivirus tools to keep data safe.
Financial
liabilities
Our
results are affected by the timing and occurrence of payments from our clients and in case they have financial difficulties we can face
cash flow problems to pay our liabilities. Our management seeks to minimize this risk through close monitoring and relationship with
our clients.
Our
Last Real Estate Project Will Not
be Completed by Us and May not be Sold and We may not Have Adequate Insurance
Projects
in real estate can be influenced by market conditions and changes in demand or economic cycles that can cause either delays in sales
of properties, changes in pricing, or both. We seek to minimize this risk through close monitoring of market conditions, but can give
no assurance that our efforts will be successful. In addition, real estate projects can subject us to liabilities related to any deficiencies
in the project as constructed. We have utilized insurance to minimize those risks to our shareholders, but we cannot give any insurance
that our insurance coverage will provide adequate protection in the event of a catastrophic failure at the project for which we are found
liable.
BOXO’s
Movie Production Requires Substantial Capital and Continued Participation from Many Parties.
BOXO’s
production projects are capital intensive, frequently costing over $30 Million. Most of the required funds are provided by investors
who invest in entities formed for a particular project. Until and unless investor funds are received, it is challenging to retain directors,
actors, and others required for movie production. Management believes that the success or failure of each project can impact BOXO’s
ability to raise funds for the next project timely. In the event that we were to have several consecutive projects on which investors
did not realize hoped-for returns. In that case, raising funds for future projects that provide a reasonable return for the Company or
on any terms might become significantly more challenging. Delays in raising capital may substantially and negatively affect BOXO’s
results.
BOXO
relies on personal relationships rather than written agreements.
The
BOXO team has worked on many projects together over decades and we rely on these personal relationships rather than formal agreements
to keep our team together. Accordingly, one or more of our key consultants may leave us at any time and this could adversely affect our
ability to produce new movies.
The
Software Development Market is Highly Competitive and Fragmented.
The business software development market is highly competitive
and includes many large and small competitors. While we have developed what we believe to be a unique platform that will prove commercially
viable, however, there is no assurance that this will prove to be the case or that in the future, software developers working for our
competitors will not expand upon or enhance our best features putting us at a competitive disadvantage.
Minority
stockholders will likely not have a meaningful vote in corporate actions.
Our
officers and directors own all of our super-voting preferred stock. All future actions requiring shareholder approval and the election
of our directors will be entirely in their control.
Reporting
requirements under the Exchange Act and compliance with the Sarbanes-Oxley Act of 2002, including establishing and maintaining acceptable
internal controls over financial reporting, are costly and may increase substantially.
The
rules and regulations of the SEC require a public company to prepare and file periodic reports under the Exchange Act, which will require
that the Company engage in legal, accounting, auditing, and other professional services. The engagement of such services is costly, and
we are likely to incur losses that may adversely affect our ability to continue as a going concern. Additionally, the Sarbanes-Oxley
Act of 2002 requires, among other things, that we design, implement and maintain adequate internal controls and procedures over financial
reporting. The costs of complying with the Sarbanes-Oxley Act may make it difficult for us to design, implement and maintain adequate
internal controls over financial reporting. If we fail to maintain an effective system of internal controls or discover material weaknesses
in our internal controls, in that case, we may not be able to produce reliable financial reports or report fraud, which may harm our
overall financial condition and result in a loss of the investor confidence and a decline in our share price.
We
cannot assure you that our Common Stock will be listed on the OTCQB or any other stock exchange.
Our
common stock is currently traded on the Pink Sheets under the symbol NUGN. Our goal is to become a fully reporting company, establish
a market price above $1.00, and be included on the OTCQB or a higher exchange, if possible. However, we cannot assure you that we will
be able to meet the initial listing standards of the OTCQB or any other stock exchange or quotation medium or that we will be able to
maintain a listing of our Common Stock on any stock exchange. After the filing of this Form 10, we expect that our Common Stock would
continue to be eligible to trade on the “pink sheets,” where our stockholders may find it more difficult to affect
a transaction in our Common Stock 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 we failed to meet the criteria outlined in such rule, imposes various practice requirements on broker-dealers
who sell securities governed by such rule to persons other than established customers and accredited investors. Consequently, such a
rule may deter broker-dealers from recommending or effecting transactions in 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.
Risks
Related to our Stockholders and Shares of Common Stock
We
are currently controlled by our principal stockholders, who include our sole director and executive officers.
At
present, David Stybr, our CEO, owns all 100 of the issued and outstanding shares of our super-voting preferred stock, which gives him
51% of the shareholder voting power of the Company. Consequently, he can affect total control of the operations of the Company
and, even if additional shares of our Common Stock are sold, he will continue to have the ability to influence or control substantially
in all matters submitted to stockholders for approval, including:
*
Electing our entire board of directors, which currently consists of only Mr. David Stybr and Mr. Justin Mathews;
*
Removing directors;
*
Amending our certificate of incorporation and bylaws;
*
Approving a business combination with an acquisition candidate; and
*
Adopting measures that could delay or prevent a change in control or impede a merger, takeover, or other business combination of the
Company.
This
concentration of ownership and management by itself may impede a merger, consolidation, takeover, or other business consolidation or
discourage a potential acquirer from making a tender offer for our Common Stock.
Our
Common Stock will likely be considered a “penny stock,” which may make it more difficult for investors to sell their shares
due to suitability requirements.
Our
common stock is currently deemed “penny stock,” as that term is defined under the Exchange Act. Penny stocks generally are
equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted
on the NASDAQ system, provided that the exchange or system provides current price and volume information concerning transactions in such
securities). Penny stock rules impose additional sales practice requirements on broker-dealers who sell to persons other than established
customers and “accredited investors.” The term “accredited investor” generally refers to institutions with assets
over $5,000,000 or individuals with a net worth in excess of $1,000,000 or an annual income exceeding $200,000 or $300,000 jointly with
their spouse.
The
penny stock rules require a broker-dealer, before a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized
disclosure document in a form prepared by the SEC, which provides information about penny stocks and the nature and level of risks in
the penny stock market. Moreover, brokers/dealers are required to determine whether an investment in a penny stock is suitable for a
prospective investor. A broker/dealer must receive a written agreement to the transaction from the investor setting forth the identity
and quantity of the penny stock to be purchased. These requirements may reduce the potential market for our common stock by reducing
the number of potential investors. This may make it more difficult for investors in our common stock to sell shares to third parties
or dispose of them. This could cause our stock price to decline.
We
have never paid dividends on our Common Stock, but we plan to do so in the future.
We
have never paid dividends on our Common Stock, but once the situation in Company allows that, we have this option as valid to discuss
on the management level and approve it. We would be delighted to share success in our projects with our shareholders.
We
are an “emerging growth company” under the JOBS Act of 2012. We cannot be certain if the reduced disclosure requirements
applicable to emerging growth companies will make our common stock less attractive to investors.
We
are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”).
We may take advantage of certain exemptions from various reporting requirements that apply 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 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements,
and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any
golden parachute payments not previously approved. We cannot predict if investors will find our common stock less attractive because
we may rely on these exemptions. If some investors find our common stock less attractive, there may be a less active trading market for
our common stock, and our stock price may be more volatile.
In
addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended
transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other
words, an “emerging growth company” can delay the adoption of specific accounting standards until those standards would otherwise
apply to private companies. We are taking advantage of the extended transition period to comply with new or revised accounting standards.
We
will remain an “emerging growth company” for up to five years, although we will lose that status sooner if our revenues exceed
$1 billion, if we issue more than $1 billion in non-convertible debt in three years, or if the market value of our common stock that
is held by non-affiliates exceeds $700 million as of any year end.
Our
status as an “emerging growth company” under the JOBS Act of 2012 may make it more challenging to raise capital as and when
we need it.
Because
of the exemptions from various reporting requirements provided to us as an “emerging growth company” and because we will
have an extended transition period for complying with new or revised financial accounting standards, we may be less attractive to investors,
and it may be difficult for us to raise additional capital as and when we need it. Investors may be unable to compare our business with
other companies in our industry if they believe that our financial accounting is not as transparent as other companies in our industry.
If we cannot raise additional capital as and when we need it, our financial condition and results of operations may be materially and
adversely affected.
We
have the right to issue shares of preferred stock. If we were to issue preferred stock, it is likely to have rights, preferences, and
privileges that may adversely affect the common stock.
We
are authorized to issue 24,000,000 shares of “blank check” preferred stock, with such rights, preferences, and privileges
as may be determined from time to time by our board of directors. Less than two million of these shares have been designated, and approximately
22,000,000 shares of preferred stock are available for designation and issuance. Our board of directors is empowered, without shareholder
approval, to issue preferred stock in one or more series and to fix for any series the dividend rights, dissolution or liquidation preferences,
redemption prices, conversion rights, voting rights, and other rights, preferences and privileges for the preferred stock. The issuance
of shares of preferred stock, depending on the rights, preferences, and privileges attributable to the preferred stock, could adversely
reduce the voting rights and powers of the common stock and the portion of the Company’s assets allocated for distribution to common
stockholders in a liquidation event, and could also result in dilution in the book value per share of the common stock we are offering.
Under certain circumstances, the preferred stock could also be utilized as a method for raising additional capital or discouraging, delaying,
or preventing a change in control of the Company, to the detriment of the investors in the common stock offered hereby. We cannot assure
you that the Company will not, under certain circumstances, issue shares of its preferred stock.
Item
2. Financial Information.
Management’s
Discussion and Analysis of Financial Condition and Results of Operation.
Overview
We
primarily engage in developing BOXO projects development where our business model consists of financing new movies or engaging in a stage
before starting distribution. BOXO is paid once the distributor company comes into the project; thus, Livento can turn around the investment
equity quickly.
AI
product has current revenues from our clients in the form of fees for our services, and we invest part of these back into the product’s
continuous upgrade. We provide our clients with analytical services where we use our software to deliver them requested portfolio setting,
and we charge an initial data analysis fee if the client uses the results of our software regularly; we charge fees based on the size
of assets he has under management and type of additional services he requires. We divide our prices based on the number of data sets
that need to be analyzed.
BOXO
production revenues will be reflected further this year as the first projects enter a revenue stage. BOXO projects are currently in differing
stages of production.
Our
current real estate project is in a revenue production phase as apartments are becoming subject to purchase contracts and sell.
Recent
Developments
In
Q1 2022, while the Convid-19 pandemic appeared to be ending, management decided to acquire Livento. We believe this strategy has
secured investors and attention for BOXO’s efforts.
New
movies are lined up every two weeks, and our producer team chooses the one with the highest added value for shareholders regarding current
cash flow and potential movie effects.
AI
product continues in normal development, where our internal team is providing services to several investment houses for portfolio optimization.
Critical
Accounting Policies
Critical
accounting policies are defined as those that are reflective of significant judgments, estimates, and uncertainties and potentially result
in materially different results under different assumptions and conditions. We believe the following are our critical accounting policies:
Basis
of Presentation and Principles of Consolidation
These
consolidated financial statements and related notes are presented by accounting principles generally accepted in the United States and
are expressed in US dollars.
The
basis of accounting differs in certain material aspects from that used for preparing the books of the Subsidiaries, which are prepared
by the accounting principles and relevant financial regulations applicable to limited liabilities enterprises established in their domicile.
The accompanying consolidated financial statements reflect necessary adjustments not recorded in the books of the Subsidiaries to present
them in conformity with U.S. GAAP.
The
consolidated financial statement comprises the financial statement of Livento Group Inc. (The Company) and the subsidiary Livento Group
LLC as of September 30, 2022.
Subsidiary
- The Group consolidated financial statements include the assets, liabilities, equity, revenue, expenses and cash flows of the Company.
A subsidiary is an entity over which the Company has control. The Company controls an entity when the Company has power over the entity,
is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through
its power over the entity. Assessment of control is based on the substance of the relationship between the Company and the entity and
includes consideration of both existing voting rights and, if applicable, potential voting rights that are currently exercisable and
convertible. The operating results of subsidiaries acquired are included in the consolidated financial statements from MONTH when control
is acquired (typically the acquisition date). The operating results of subsidiaries that are divested during the period are included
up to the date control ceased (typically the disposition date) and any difference between the fair value of the consideration received
and the carrying value of a divested subsidiary is recognized in the consolidated income statements. Accounting policies of subsidiaries
have been aligned with those of the Company where necessary.
Functional
and presentation currency
The
accompanying consolidated financial statements are presented in the United States dollar (“USD”), the Company’s reporting
currency.
Related
parties
The
Company adopted ASC 850, Related Party Disclosures, to identify related parties and disclose related party transactions.
A
related party is generally defined as (i) any person that holds 10% or more of the Company’s securities and their immediate families,
(ii) the Company’s management, (iii) someone that directly or indirectly controls, is controlled by or is under common control
with the Company, or (iv) anyone who can significantly influence the financial and operating decisions of the Company. A transaction
is considered a related party transaction when resources or obligations are transferred between related parties. Related parties may
be individuals or corporate entities.
Revenue
Recognition
The
Company adopted ASC 606 requires using a new five-step model to recognize revenue from customer contracts. The five-step model requires
entities to exercise judgment when considering the terms of contracts, which includes (1) identifying the contracts or agreements with
a customer, (2) identifying our performance obligations in the contract or agreement, (3) determining the transaction price, (4) allocating
the transaction price to the separate performance obligations, and (5) recognizing revenue as each performance obligation is satisfied.
The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled
to in exchange for the services it transfers to its clients. The Company has concluded that the new guidance did not require any change
to its revenue recognition processes.
The
Company recognizes software service fees over time as performance obligations are satisfied over the life of the service, usually, with
an average duration of one year. Payments received in advance from customers are recorded as “Deferred revenues.” Such advance
payments received are non-refundable after the thirty days refund period.
The
cost of revenue consists primarily of the outsourced information technology support service, internal employees, consultants, service
charges for cloud computing, and related expenses, which are directly attributable to the revenues.
| S/N |
|
Type
of services |
|
Nature,
Timing of satisfaction of performance obligation and significant payment terms |
|
Revenue
Recognition |
| 1 |
|
Income
from Elissee Software |
|
Elisee
involves in the business of analysis of data sets for DJIA and DAX indexes. The contracts for Elisee are generally for 12 months.
The billing for Elisee is quarterly with 60 days collection period. |
|
Revenue
is recognized by the company not only when delivery note and invoice has been signed and
confirmed by the customer, but at the end of each quarter over the 12 months period after
service has been delivered to the customers.
When
the company expects to be entitled to breakage (forfeiture of substandard services), the company recognizes the expected amount of
breakage in proportion to the services provided versus the total expected network services to be provided. Any unexpected amounts
of breakage are recognized when the unused value of network services expire |
| |
|
|
|
|
|
|
| 2 |
|
Management
service income |
|
The
company rendered Management services to (Retinvest-AB, Thun Development Services and others)
contains real estate development services mainly, but not limited to:
-
budgeting
-
contract check and preparation
-project
works
-
reporting and control of works
-
analysis of available land opportunities acquisitions |
|
The
company recognize revenue when the services have been provided |
Going
Concern
The
Company’s financial statements, as of September 30, 2022, are prepared using generally accepted accounting principles in
the United States of America applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities
in the normal course of business.
The
Company has tried to establish an ongoing and stable source of revenues and cash flows sufficient to cover its operating costs and allow
it to continue as a going concern. The Company has accumulated a net loss of $162,509 as of September 30, 2022.
The cash balances as of September 30, 2022, were $105,757. These factors, among others, support the ability of the Company
to continue to fulfill its targets.
However,
management cannot assure that the Company will accomplish any of its plans. These financial statements do not include any adjustments
related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should
the Company be unable to continue as a going concern.
Results
of Operations
Unaudited Financial Statements showing results
for Q3 2022 and audited statements for Livento Group LLC for 2020 and 2021.
Livento
Group, Inc.& Livento Group LLC
Balance
Sheet Prev. Year Comparison
Accrual
Basis
As
of September 30, 2022, December 31, 2021, and December 31, 2020
| | |
Livento Group Inc. (unaudited) | | |
Livento Group LLC | | |
Livento
Group LLC | |
| | |
Sep 30, 2022 | | |
Dec 31, 2021 | | |
Dec 31, 2020 | |
| ASSETS | |
| | | |
| | | |
| | |
| Current Assets | |
| | | |
| | | |
| | |
| Checking/Savings | |
| | | |
| | | |
| | |
| Cash | |
| 105,757 | | |
| 484,183 | | |
| 2,300 | |
| Total Checking/Savings | |
| 105,757 | | |
| 484,183 | | |
| 2,300 | |
| | |
| | | |
| | | |
| | |
| Accounts Receivable | |
| 467,980 | | |
| 0 | | |
| 0 | |
| | |
| | | |
| | | |
| | |
| Other Current Assets | |
| | | |
| | | |
| | |
| Other Accounts Receivable | |
| 0 | | |
| 0 | | |
| 0 | |
| Inventories | |
| 0 | | |
| 0 | | |
| 0 | |
| Total Other Current Assets | |
| 0 | | |
| 0 | | |
| 0 | |
| | |
| | | |
| | | |
| | |
| Total Current Assets | |
| 573,738 | | |
| 484,183 | | |
| 2,300 | |
| | |
| | | |
| | | |
| | |
| Fixed Assets | |
| | | |
| | | |
| | |
| Long Term Investments | |
| 9,929,359 | | |
| 11,929,359 | | |
| 5,282,489 | |
| Property & Equipment | |
| 0 | | |
| 0 | | |
| 0 | |
| Goodwill | |
| 0 | | |
| 0 | | |
| 0 | |
| Intangible Assets | |
| 14,258,847 | | |
| 8,747,830 | | |
| 4,900,630 | |
| Other Assets | |
| 0 | | |
| 0 | | |
| 0 | |
| Deferred Long Term Asset Charges | |
| 0 | | |
| 0 | | |
| 0 | |
| Accumulated Amortization | |
| (1,822,080 | ) | |
| (820,030 | ) | |
| 0 | |
| Total Fixed Assets | |
| 22,366,126 | | |
| 19,857,159 | | |
| 10,183,119 | |
| | |
| | | |
| | | |
| | |
| TOTAL ASSETS | |
| 22,939,864 | | |
| 20,341,342 | | |
| 10,185,419 | |
| | |
| | | |
| | | |
| | |
| LIABILITIES & EQUITY | |
| | | |
| | | |
| | |
| Liabilities | |
| | | |
| | | |
| | |
| Current Liabilities | |
| | | |
| | | |
| | |
| Accounts Payable | |
| 324,999 | | |
| 248,900 | | |
| 5,000 | |
| Credit Cards | |
| 0 | | |
| 0 | | |
| 0 | |
| Other Current Liabilities | |
| | | |
| | | |
| | |
| Accounts Payable | |
| 86,400 | | |
| 0 | | |
| 0 | |
| Derivative Liabilities | |
| 0 | | |
| 0 | | |
| 0 | |
| Notes Payable | |
| 0 | | |
| 0 | | |
| 0 | |
| Payroll Liabilities | |
| 0 | | |
| 0 | | |
| 0 | |
| Related Parties Payable | |
| 98,040 | | |
| 0 | | |
| 0 | |
| Total Other Current Liabilities | |
| 184,440 | | |
| 0 | | |
| 0 | |
| Total Current Liabilities | |
| 509,439 | | |
| 248,900 | | |
| 5,000 | |
| | |
| | | |
| | | |
| | |
| Long Term Liabilities | |
| 0 | | |
| 0 | | |
| 0 | |
| | |
| | | |
| | | |
| | |
| Total Liabilities | |
| 509,439 | | |
| 248,900 | | |
| 5,000 | |
| | |
| | | |
| | | |
| | |
| Equity | |
| | | |
| | | |
| | |
| Additional Paid in Capital | |
| 34,638,395 | | |
| 12,752,259 | | |
| 6,776,389 | |
| Capital Stock | |
| 0 | | |
| 0 | | |
| 0 | |
| Common Stock | |
| 21,900 | | |
| 0 | | |
| 0 | |
| Dividends Paid | |
| 0 | | |
| 0 | | |
| 0 | |
| Opening Balance Equity | |
| 0 | | |
| 0 | | |
| 0 | |
| Owner or member capital | |
| 0 | | |
| 6,681,000 | | |
| 2,500,000 | |
| Preferred Stock | |
| 1,719 | | |
| 0 | | |
| 0 | |
| Retained Earnings | |
| (12,231,589 | ) | |
| 659,183 | | |
| 904,030 | |
| Total Equity | |
| 22,430,425 | | |
| 20,092,442 | | |
| 10,180,419 | |
| | |
| | | |
| | | |
| | |
| TOTAL LIABILITIES & EQUITY | |
| 22,939,864 | | |
| 20,341,342 | | |
| 10,185,419 | |
Livento
Group, Inc.& Livento Group LLC
Profit
& Loss Prev. Year Comparison
Accrual
Basis
As
of September 30, 2022, December 31, 2021, and December 31, 2020
| | |
Livento Group Inc. (unaudited) | | |
Livento Group LLC | | |
Livento Group LLC | |
| | |
Sep 30, 2022 | | |
Dec 31, 2021 | | |
Dec 31, 2020 | |
| Ordinary Income/Expense | |
| | | |
| | | |
| | |
| Income | |
| | | |
| | | |
| | |
| Revenues | |
| 1,474,513 | | |
| 1,840,866 | | |
| 1,570,297 | |
| Sales Discounts | |
| 0 | | |
| 0 | | |
| 0 | |
| Total Income | |
| 1,474,513 | | |
| 1,840,866 | | |
| 1,570,297 | |
| | |
| | | |
| | | |
| | |
| Cost of Goods Sold | |
| | | |
| | | |
| | |
| Merchant Account Fees | |
| 0 | | |
| 0 | | |
| 0 | |
| Professional fees RTS | |
| 296,117 | | |
| 345,000 | | |
| 267,000 | |
| Amortization RTS | |
| 1,002,050 | | |
| 820,030 | | |
| 0 | |
| Total COGS | |
| 1,298,167 | | |
| 1,165,030 | | |
| 267,000 | |
| | |
| | | |
| | | |
| | |
| Gross Profit | |
| 176,346 | | |
| 675,836 | | |
| 1,303,297 | |
| | |
| | | |
| | | |
| | |
| Expense | |
| | | |
| | | |
| | |
| Advertising and Promotion | |
| 27,041 | | |
| 0 | | |
| 0 | |
| Automobile Expense | |
| 0 | | |
| 0 | | |
| 0 | |
| Bank Service Charges | |
| 0 | | |
| 267 | | |
| 267 | |
| Computer and Internet Expense | |
| 26,644 | | |
| 334,500 | | |
| 88,000 | |
| Depreciation Expense | |
| 0 | | |
| 0 | | |
| 0 | |
| Insurance Expense | |
| 0 | | |
| 0 | | |
| 0 | |
| Interest Expense | |
| 0 | | |
| 0 | | |
| 0 | |
| Janitorial Expense | |
| 0 | | |
| 0 | | |
| 0 | |
| Meals and Entertainment | |
| 0 | | |
| 0 | | |
| 0 | |
| Office Supplies | |
| 8,000 | | |
| 0 | | |
| 0 | |
| Payroll Expenses | |
| 0 | | |
| 0 | | |
| 0 | |
| Professional Fees | |
| 255,170 | | |
| 498,817 | | |
| 311,000 | |
| Rent Expense | |
| 22,000 | | |
| 87,100 | | |
| 0 | |
| Repairs and Maintenance | |
| 0 | | |
| 0 | | |
| 0 | |
| Telephone Expense | |
| 0 | | |
| 0 | | |
| 0 | |
| Uniforms | |
| 0 | | |
| 0 | | |
| 0 | |
| Utilities | |
| 0 | | |
| 0 | | |
| 0 | |
| Total Expense | |
| 338,855 | | |
| 920,684 | | |
| 399,267 | |
| | |
| | | |
| | | |
| | |
| Net Ordinary Income | |
| (162,509 | ) | |
| (244,847 | ) | |
| 904,030 | |
| | |
| | | |
| | | |
| | |
| Other Income/Expense | |
| | | |
| | | |
| | |
| Other Income | |
| 0 | | |
| 0 | | |
| 0 | |
| Other Expense | |
| 0 | | |
| 0 | | |
| 0 | |
| Net Other Income | |
| 0 | | |
| 0 | | |
| 0 | |
| | |
| | | |
| | | |
| | |
| Net Income | |
| (162,509 | ) | |
| (244,847 | ) | |
| 904,030 | |
Managements’
Discussion of the year ended December 31 2020
During
2020, Livento Group LLC operated as development platform for its artificial intelligence software Elisee and real estate projects where
as well revenue of $750,267 was invoiced for consulting and management services. We are providing strategical, project and administration
services to several projects in Europe. Another $820,030 in revenues was share in real estate projects sales totaling revenues for 2020
to $1,570,297.
Costs
were incurred mainly as professional fees in amount of $311,000 for people providing Elisee development and real estate projects consulting.
Other costs was $88,000 for computer and server rent that was used for development of several projects in IT sector, one of them was
as well Elisee. We are accounting for $267,000 as costs of goods sold that covered professional fees related to revenues.
Our
long term assets consisted of Elisee in amount of $3,320,030, real estate projects in amount of $236,700 and $5,045,789 and first
movie project in amount $1,580,600.
Managements’
Discussion of the year ended December 31 2021
In
2021, Livento Group LLC moved more forward as well in movie projects and started to shift its position from real estate towards movies.
We continued to develop Elisee platform for new clients in USA and our real estate projects started to being realized and developed.
Our revenue consists from $525,000 invoiced for Elisee and $1,315,866 for real estate management.
Due
to high growth of the company, our professional fees increased in line with our revenues to $498,817 and Elisee and other IT focused
projects development took $334,500 for server and IT rent. We are accounting for $820,030 as costs of goods sold for Elisee and $345,000
for professional fees linked to consulting revenues. We as well officially had our first office that was in cost of $87,100.
Company
ended in net loss of $244,847 that was caused mainly by amortization of Elisee software that we started fully used and sell in 2021.
Without amortization, the financial result of the company would be profit of $575,183 which would be decrease compared to year 2020 but
Company invested lot of revenues into movie projects and as well Elisee development in expectation of future revenue coming from these
investments.
Our
long term assets consisted of Elisee in amount of $5,032,230, real estate projects in amount of $2,757,700 and $9,171,659 and movie projects
in amount $3,715,600.
Managements’
discussion of the periods ended September 30, 2021 and 2022
Livento
Group was acquired by Nugene International, Inc., which
subsequently changed its name to Livento Group, Inc. We had revenue of $1,474,513 in the first three quarters of 2022.
These came from sales of Elisee and our management services to real estate projects. Elisee sales accounted for $718,805, deferred
movie revenues for developed parts $171,000 and $514,000 for real estate projects and management.
Our
costs of goods sold consist of Amortization of
Intangible Assets in amount of $702,050, Professional fees of key professionals and consulting fee that is related to generation
of income from the Elisee in amount of $296,117. Most of the revenue for the quarter that ended September 30, 2022, was derived
from software fees in the USA and Europe markets. Management believes that the increased revenues are related to our expanded staffing.
The main reason is the hiring of new investment representative people and intermediary consultants that support gaining new clients.
Our expenses were $338,855, mainly professional fees, cloud fees, servers, and legal expenses.
Professional
fees increased during this period as we hired services to develop Elisee and more people
in administration regarding the process of getting change don’t with NuGene International,
Inc. Compared to the previous period, we took larger office space to accommodate more people’s
needs. All of the above resulted in a net loss of $162,509.
Because
of inflation, increased costs of construction, and smaller profit margins, we are transferring our focus to BOXO and Elisee. BOXO is
undertaking more projects and requires more investment than we can generate, and demand for Elisee is increasing due to current market
volatility. We believe the capital generated from the disposal of our real estate properties will provide the required cash for these
operations.
Assets
| Name
of the intangible asset |
|
A&I
machine learning program |
| what
the intangible assets is to be used for |
|
Contains
algorithms and code to analyze large portions of data within closed portfolio of items in order to set their best performing distribution
within the portfolio. |
| Duration
for the construction / completion of the intangible assets |
|
Development
started in 2018 and continues to present time. Company has several consultants and pays data and servers to upgrade and finalize
the system. |
Expectation
of revenue generation from the asset |
|
The
asset currently generates app USD 1,5 million per year and we expect from 2023 to produce USD 2,5 million as we are able to offer
upgraded version to more clients. |
| Expected
useful life of the assets upon completion |
|
Based
on the recommendation from the system developers and technological changes the company policy is to amortize A & I Learning Program
for 3 years. The company will conduct an annual impairment test to reassess our assumptions on the estimated useful life. |
| Amortization |
|
The
company amortizes the asset at 33.33% per annum using the straight method. |
| Amount
expended on research. |
|
Research
expenses are currently USD 4,212,200 including initial acquisition of the asset and continues investments into data, consultants
and servers. These expenses don’t include general costs, marketing and other indirect costs occurred during the time. |
Development
Projects
| Name
of the asset |
|
Real
Estate Development Projects |
| what
the assets is to be used for |
|
It
contains project plans, budgets, permits and zoning rights for large project in Europe, Czech Republic. |
| Duration
for the construction / completion of the assets |
|
We
are hiring consultants that are proceeding the works on the asset and we expect completing in 1Q 2023. |
| Expectation
of revenue generation from the acquisition of the asset |
|
Asset
will be sold to third party for highest bid, we expect to sell for app USD 3 million. Our sell process already started, we entertain
several developers that are interested in the project acquisition. |
| Expected
useful life of the assets upon completion |
|
It’s
a project, will be valid for 10 years after completion. |
| Amount
expended on research |
|
The
cost to produce this asset is currently USD 2,757,700 and contains works of people and acquisition of initial project. |
Managed
Real Estate Projects
| Name
of the asset |
|
Managed
Real Estate Projects |
| what
the assets is to be used for |
|
Asset
with name “Tundra’ that is expressly large residential project we acquired as a company and we are finalizing project
works to sell this project in 1Q 2023. |
| Duration
for the construction / completion of the intangible assets |
|
We
are hiring consultants that are proceeding the works on the asset and we expect completing in 2Q / 2023. |
| Expectation
of revenue generation from the acquisition of the asset |
|
Asset
will be sold to third party for highest bid, we expect to sell for app USD 9 million. Our sell process already started, we entertain
several developers that are interested in the project acquisition. |
| Expected
useful life of the assets upon completion |
|
It’s
a project, will be valid for 10 years after completion. |
| Amount
expended on research. |
|
The
cost to produce this asset is currently USD 7,171,659 and contains works of people and acquisition of initial project. |
Movie
projects
| Name
of the intangible asset |
|
Movie
Projects |
| what
the intangible assets is to be used for |
|
We
invest into movie development projects and this asset class contains intellectual rights to books, movies, scripts. We further develop
the asset via developing complete movie script that is further offered to large distribution studios in entertainment industry that
will sell the project so BOXO can produce the asset to full movie. Assets as well can be separately sold if there is buyer with interest. |
| Duration
for the construction / completion of the intangible assets |
|
Each
movie asset needs 15-18 months to reach completion. |
| Expectation
of revenue generation from the acquisition of the asset |
|
Asset
once pre-sold to distributor receives 40% margin revenue and once in cinemas and /or online streamers, BOXO receives revenue share
in share of 15-25%. |
| Expected
useful life of the assets upon completion |
|
Movie
asset package has expected value for 15 years. |
| How
the assets is to be amortized |
|
The
company amortizes the asset at 20% per annum using the straight method. |
| Amount
expended on research |
|
|
COVID-19
outbreak
In
March 2020, the World Health Organization declared coronavirus COVID-19 a global pandemic. The COVID-19 pandemic has negatively impacted
the global economy, workforce, and customers and created significant volatility and disruption of financial markets. It has also disrupted
the normal operations of many businesses, including ours. This outbreak could decrease spending, adversely affect demand for our services
and harm our company and the results of operations. It is not possible for us to predict the duration or magnitude of the adverse consequences
of the outbreak and its effects on our business or the results of operations at this time.
Liquidity
and Capital Resources.
Liquidity
is the ability of a company to generate funds to support its current and future operations, satisfy its obligations, and otherwise operate
on an ongoing basis.
We
had $105,757 cash on hand on September 30, 2022. This is adequate for our planned operations through the end of 2022. In addition, we
anticipate approximately $400,000 in net revenue from the sale of condominium units under contract to be received during 4Q
2022. To build the BOXO brand fully, the Company intends to rely on increased net income and cash inflow in the coming year. In addition,
we also plan to receive additional investments for our business through private equity sales. However, we can give no assurance that
we will realize the goals.
Our
receivables are mainly due from clients using Elisee
software as the clients were experiencing high market volatility and delayed several payments. The situation is
getting cleared in September 2022 and all delayed payments should be done till end of 2023.
Our
billing for Elisee is generally quarterly, with payment up to 60 days, thus creating a need for working capital.
Our
contracts for Elisee are generally 24 months, providing stable revenue and cash flow. We are engaged in the production of three movies,
where the first one should provide revenue during 1Q of 2023 and the others near the end of 2023. Our movie industry investments appear
on our balance sheet as these are not costs but direct investments as we acquire intellectual property in target movie companies. Each
movie is produced in separate company so risk of failure is mitigated for Livento as a holding company.
Livento
Group, Inc.& Livento Group LLC
Statement
of Cash Flows
Accrual
Basis
As
of September 30, 2022, December 31, 2021, and December 31, 2020
| | |
Livento Group
Inc. | | |
Livento Group
LLC | | |
Livento Group
LLC | |
| | |
Sep 30, 2022 | | |
Dec 31, 2021 | | |
Dec 31, 2020 | |
| OPERATING ACTIVITIES | |
| | | |
| | | |
| | |
| Net Income | |
| (162,509 | ) | |
| (244,847 | ) | |
| 904,030 | |
| Adjustments to reconcile Net Income to net cash provided by operations: | |
| | | |
| | | |
| | |
| Accounts Receivable | |
| 532,530 | | |
| 0 | | |
| 0 | |
| Inventories | |
| 0 | | |
| 0 | | |
| 0 | |
| Accounts Payable | |
| (624,973 | ) | |
| 243,900 | | |
| 5,000 | |
| Derivative Liabilities | |
| 0 | | |
| 0 | | |
| 0 | |
| Notes Payable | |
| 0 | | |
| 0 | | |
| 0 | |
| Payroll Liabilities | |
| 0 | | |
| 0 | | |
| 0 | |
| Related Parties Payable | |
| 98,040 | | |
| 0 | | |
| 0 | |
| Net cash provided by Operating Activities | |
| 5,597 | | |
| (947 | ) | |
| 909,030 | |
| | |
| | | |
| | | |
| | |
| INVESTING ACTIVITIES | |
| | | |
| | | |
| | |
| Accumulated Depreciation | |
| 0 | | |
| 820,030 | | |
| 0 | |
| Furniture and Equipment | |
| 0 | | |
| 0 | | |
| 0 | |
| Property & Equipment | |
| (987,014 | ) | |
| (10,494,070 | ) | |
| (10,183,119 | ) |
| Deposits | |
| 0 | | |
| 0 | | |
| 0 | |
| Security Deposits Asset | |
| 0 | | |
| 0 | | |
| 0 | |
| Net cash provided by Investing Activities | |
| (987,014 | ) | |
| (9,674,040 | ) | |
| (10,183,119 | ) |
| | |
| | | |
| | | |
| | |
| FINANCING ACTIVITIES | |
| | | |
| | | |
| | |
| Additional Paid in Capital | |
| 602,992 | | |
| 5,975,870 | | |
| 6,776,389 | |
| Capital Stock | |
| 0 | | |
| 0 | | |
| 0 | |
| Common Stock | |
| 0 | | |
| 0 | | |
| 0 | |
| Dividends Paid | |
| 0 | | |
| 0 | | |
| 0 | |
| Owner or member capital | |
| 0 | | |
| 4,181,000 | | |
| 2,500,000 | |
| Preferred Stock | |
| 0 | | |
| 0 | | |
| 0 | |
| Retained Earnings | |
| 0 | | |
| 0 | | |
| 0 | |
| Net cash provided by Financing Activities | |
| 602,992 | | |
| 10,156,870 | | |
| 9,276,389 | |
| | |
| | | |
| | | |
| | |
| Net cash increase for period | |
| (378,426 | ) | |
| 481,883 | | |
| 2,300 | |
| | |
| | | |
| | | |
| | |
| Cash at beginning of period | |
| 484,183 | | |
| 2,300 | | |
| 0 | |
| | |
| | | |
| | | |
| | |
| Cash at end of period | |
| 105,757 | | |
| 484,183 | | |
| 2,300 | |
Our
debt is mainly operational liabilities, including one $61,400 loan and payments for rent, professional studies, and marketing. We will
pay these outstanding amounts as they come due. The Loan is to be repaid in 1Q 2023, and we believe our cash flow will be sufficient
to pay it.
We
have not entered into any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our
financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or
capital resources and would be considered material to investors.
Item
3. Properties.
Property,
plant and equipment
Our
property, plant, and equipment on September 30, 2022, consists of our software product, budgeted and planned real estate projects,
and BOXO Productions projects.
Livento
is finalizing the sale of 16 condominium units in a building in a suburb of Prague that was fully pre-sold in 2021. Livento finalizes
sales to clients during period September-November 2022. Our internal team managed this project from land acquisition through
project planning and realization. The project was financed by 65% by bank loans which will be repaid on the sale of the units.
Item
4. Security Ownership of Certain Beneficial Owners and Management.
The
following table sets forth certain information regarding our shares of common stock beneficially owned as of December 30, 2022,
for (i) each stockholder known to be the beneficial owner of 5% or more of our outstanding shares of common stock, (ii) each named executive
officer and director, and (iii) all executive officers and directors as a group. A person is considered to own any shares beneficially:
(i) over which such person, directly or indirectly, exercises sole or shared voting or investment power, or (ii) of which such person
has the right to acquire beneficial ownership at any time within 60 days through an exercise of stock options or warrants. Unless otherwise
indicated, voting and investment power relating to the shares shown in the table for our directors and executive officers is exercised
solely by the beneficial owner or shared by the owner and the owner’s spouse or children.
For
this table, a person or group of persons is deemed to have “beneficial ownership” of shares of common stock that such person
has the right to acquire within 60 days of December 30, 2022. For purposes of computing the percentage of outstanding shares of
our common stock held by each person or group of persons named above, any shares that such person or persons have the right to acquire
within 60 days of December 30, 2022, are deemed to be outstanding but is not deemed to be outstanding to compute the percentage
ownership of any other person. The inclusion herein of any shares listed as beneficially owned does not constitute an admission of beneficial
ownership. Unless otherwise specified, the address of each of the persons set forth below is care of the company at the address set forth
on the cover of this report.
| Name
and address of beneficial owner | |
Number
of Shares Owned (1) | | |
Percent
of Class (2) | |
| | |
| | |
| |
| David
Stybr (3) | |
| 0 | | |
| 0 | % |
| | |
| | | |
| | |
| Justin
Mathews | |
| 0 | | |
| 0 | % |
| | |
| | | |
| | |
| David
Zich | |
| 0 | | |
| 0 | % |
| | |
| | | |
| | |
| All
officers and Directors as a group (3 persons) (3) | |
| 0 | | |
| 0 | % |
| |
1. |
Does
not account for the shares of Series A Preferred Stock which have 51% of the voting power of the Company and are held solely by David
Stybr. |
| |
2. |
Based
on shares of common stock outstanding as of September 30, 2022 of 227,001,268 shares. |
| |
3. |
Does
not include 100 shares of super voting preferred stock which gives Mr. Stybr effective control
of the Company.
|
Item
5. Directors and Executive Officers.
Our
directors and executive officers and additional information concerning them are as follows:
| Name
|
|
AGE |
|
Position(s) |
|
Holds
shares |
| David
Stybr |
|
39
|
|
President
and Chief Executive Officer |
|
100
Series A Preferred stock |
| |
|
|
|
|
|
|
| Justin
Mathews |
|
49 |
|
Investor
Relations Director |
|
N/A |
| |
|
|
|
|
|
|
| David
Zich |
|
27 |
|
Treasury
and Secretary |
|
N/A |
David
Stybr
David
Štýbr has been the CEO of Livento Group since 2015 and is the founder of BOXO. He manages the Company’s business
operations, projects, and team. Štýbr’s previous roles include being the CEO of OTT Ventures, a venture capital company,
from 2018 to 2021, the various executive positions at CPI Property Group, and its affiliate CPI Byty, a real estate manager and operator,
from 2015 to 2018.
Justin
Mathews
Justin
Mathews has been Investor Relations Director of Livento Group and its subsidiary BOXO since 2020. He is responsible for identifying,
building, and maintaining relationships with the private investor community. He also sources investment opportunities and creates and
maintains relationships with the Company’s partners. Previously, Mathews held various roles at Morgan & Banks Australia, TMP
Worldwide (now TMP Worldwide Advertising & Communications LLC), and IMSG PLC, from 2011 till 2018, and from 2018 to the present has
been the principal and founder of Human Capital Advisory Group, a provider of HR services.
David
Zich
David
Zich has been the Secretary and Treasurer of the Company and BOXO 2022. He is responsible for the Company’s operational management
activities, including change management, internal and external communication, human resources, and strategic metrics. Before his current
role, Zich was a key account manager and later a sales manager at a hospitality timeshare company from 2018 to 2022 and a project manager
at Euro Dot from 2020 to 2022.
During
the past five years, 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, including any allegations (not subsequently reversed, suspended or vacated), permanent or temporary injunction, or any other
order of any federal or state authority or self-regulatory organization, relating to activities in any phase of the securities, commodities,
banking, savings, and loan, or insurance businesses in connection with the purchase or sale of any security or commodity, or involving
mail or wire fraud in any business.
There
are no family relationships among our officers and directors.
Item
6. Executive Compensation.
CEO
of the Company is entitled to receive $12,000 per month, and Mr. Mathews is entitled to $4,000 per month pursuant to consulting agreements
that are cancellable by either party on one month’s notice in the case of Mr. Matthews and three months’ notice in the case
of Mr. Stybr.
The
Company may adopt a share benefit program or other stock or option compensation plan in the future.
Item
7. Certain Relationships and Related Transactions, and Director Independence.
During
2022, the Company acquired Livento Group LLC from Mr. Stybr. Mr Stybr exchanged shares of Livento Group LLC for voting A class
shares of NuGene International and 5,000,000 C class preferred shares. For the accounting presentation the acquirer was NuGene
International Inc. and Livento Group LLC is now 100% owned by Livento Group Inc. (formerly NuGene International Inc).
Item
8. Legal Proceedings.
There
is no material pending legal proceedings to which the Company is a party or as to which any of its property is subject, and no such proceedings
are known to the Company to be threatened or contemplated against it. The Company is considering bringing litigation to resolve its possible
liabilities under a variable rate convertible note which we believe is not legal under the New York law the note recites as governing.
However, we have not commenced this litigation as of the date of this filing.
Item
9. Market Price of and Dividends on the Registrant’s Common Equity and Related Stockholder Matters.
Our
Common Stock is included on the Pink Sheets under the Symbol NUGN and is currently quoted at $0.065 with active trading. There are approximately
69 holders of record of our common stock. Other holders have their stock deposited at brokers and their shares are in street name.
We
have not paid any cash dividends to date, but should the company’s needs allow it, the Board of Directors intends to declare dividends
from future earnings.
We
have not authorized the issuance of securities under retirement, pension, profit sharing, stock option, or other equity compensation
plans.
The
last reported closing price was $.0669 on December 29, 2022.
| Period | |
High | | |
Low | |
| July
1, 2022 |
- |
September
30, 2022 | |
| .198 | | |
| .027 | |
| April
1, 2022 |
- |
June
30, 2022 | |
| .200 | | |
| .014 | |
| January
1, 2022 |
- |
March
31, 2022 | |
| .065 | | |
| .004 | |
| October
1, 2021 |
- |
December
31, 2021 | |
| .048 | | |
| .007 | |
| July
1, 2021 |
- |
September
30, 2021 | |
| .045 | | |
| .005 | |
| April
1, 2021 |
- |
June
30, 2021 | |
| .023 | | |
| .004 | |
| January
1, 2021 |
- |
March
31, 2021 | |
| .018 | | |
| .003 | |
| October
1, 2020 |
- |
December
31, 2020 | |
| .008 | | |
| .002 | |
| July
1, 2020 |
- |
September
30, 2020 | |
| .019 | | |
| .003 | |
| April
1, 2020 |
- |
June
30, 2020 | |
| .037 | | |
| .001 | |
| January
1, 2020 |
- |
March
31, 2020 | |
| .003 | | |
| .001 | |
Item
10. Recent Sales of Unregistered Securities.
During
the past two fiscal years, the Company has issued the following shares of common stock without registration:
17,760,000
shares of common stock were issued in connection
with conversions of convertible promissory notes. These shares were exempt from registration under Section 4(a)(2) of the Securities
Act of 1933, as amended, as transactions by an issuer not involving a public offering, and the Company instructed its transfer agent
that such shares were to have a restrictive legend pending the receipt of an appropriate opinion of counsel.
107,232,803
shares of common stock were issued in connection with the settlements of outstanding convertible promissory notes. These shares were
exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as amended, as transactions by an issuer not involving
a public offering, and the Company instructed its transfer agent that such shares were to have a restrictive legend pending the receipt
of an appropriate opinion of counsel.
55,254,666
shares of common stock were issued to investors on privately negotiated transactions for cash. These shares were exempt from registration
under Section 4(a)(2) of the Securities Act of 1933, as amended, as transactions by an issuer not involving a public offering and the
Company instructed its transfer agent that such shares were to have a restrictive legend pending the receipt of an appropriate opinion
of counsel.
29,517,720
shares were issued for services. These shares were exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as amended,
as transactions by an issuer not involving a public offering and the Company instructed its transfer agent that such shares were to have
a restrictive legend pending the receipt of an appropriate opinion of counsel.
6,000,000
shares of common stock were issued upon automatic conversion of the Company’s former Series A Preferred Stock in accordance with
its terms. The transaction was exempt from registration under Section 3(a)(9) of the Securities Act of 1933, as amended, as a transaction
between an issuer and its existing security holders, and the Company instructed its transfer agent that such shares were to have a restrictive
legend pending the receipt of an appropriate opinion of counsel.
Item
11. Description of Registrant’s Securities to be Registered.
This
description of our securities is a summary only of specific provisions contained in our Certificate of Incorporation and is qualified
in its entirety by reference to the complete terms contained therein.
Common
Shares
The
Company’s Certificate of Incorporation authorizes the Company to issue an aggregate of 800,000,000 shares of Common Stock, a par
value of $0.0001 per share. As of July 5, 2022, 209,001,268 shares of our Common Stock were issued and outstanding.
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 in dividends,
if any, as the Board of Directors may declare from time to time 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. Holders of Common Stock do not
have cumulative or preemptive rights.
Super
Voting Shares
The
Company has designated and issued 100 shares of Series A Preferred stock. The owner of these shares has 51% of all voting rights, regardless
of the number of other shares issued. Our CEO, David Stybr, owns all of these shares and can control our affairs.
Series
C and Series D Preferred Shares
We
have designated 10,000,000 shares as Series C Preferred Stock and 1,000,000 shares as Series D Preferred Stock. As of September 30,
2022, 6,164,926 shares of our Series C Preferred Shares were issued and outstanding, and no shares of Series D Preferred Stock
were outstanding. Each share of Series C or Series D Preferred Stock converts into 100 shares of common stock as the common stock is
presently constituted but has no rights to dividends. Upon liquidation of the Company, holders of Series C or Series D Preferred Stock
will receive such amount as the holder would have received had they converted to common stock immediately before the liquidation. The
only difference between the Series C Preferred Stock and the Series D Preferred Stock is that the Series C Preferred Stock is not adjusted
for stock splits and combinations. At the same time, the Series D Preferred Stock will have a proportional adjustment, and holders of
Series C Stock may not affect a conversion that would place their total ownership of the shares of common stock above 4.99% of the outstanding.
Debt
Securities
As
of the date of this registration statement, we have not issued any debt securities. There is one outstanding variable rate note in the
original principal amount of $120,000. Management believes that this note is null and void under applicable law and is considering litigation
against the holder of the note. The note can substantially dilute the common stock if not resolved through litigation or settled.
The
note was issued on 31st of October 2016 to Kodiak Capital Group LLC, with a 5% per annum stated
interest rate. The note provides for interest, penalties, pre-payment penalties, and the right to convert substantially below the current
market price of our stock. Management believes that the note would be considered criminally usurious under current New York law (the
note states that it is to be governed by New York law).
Warrants
As
of the date of this registration statement, we have not issued any warrants, options, or other securities which are convertible into
or exercisable for shares of our Common Stock other than the preferred stock described above.
Other
Securities to Be Registered
We
are not registering any securities other than our Common Stock in this registration statement.
Item
12. Indemnification of Directors and Officers.
Under
Nevada Law and our Bylaws, we may indemnify an officer or director who is made a party to any proceeding, including a lawsuit, because
of his position if he acted in good faith and in a manner he reasonably believed to be in our best interest. We may advance expenses
incurred in defending a proceeding. To the extent that the officer or director is successful on the merits in a proceeding as to which
he is to be indemnified, we must indemnify him against all expenses incurred, including attorney’s fees. Concerning a derivative
action, indemnity may be made only for expenses actually and reasonably incurred in defending the proceeding and if the officer or director
is judged liable only by a court order. The indemnification is intended to be to the fullest extent permitted by the laws of the State
of Nevada.
Regarding
indemnification for liabilities arising under the Securities Act, which may be permitted to directors or officers under Nevada law, we
are informed that, in the opinion of the Securities and Exchange Commission, indemnification is against public policy, as expressed in
the Securities Act and is, therefore, unenforceable.
Item
13. Financial Statements and Supplementary Data.
Set
forth below is a list of our financial statements included in this registration statement on Form 10.
Item
14. 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
15. Financial Statements and Exhibits.
| |
(a) |
Financial
Statements. |
Following
the Signature Page |
| |
|
|
|
| |
(b) |
Exhibits. |
|
| Exhibit
No. |
|
Description |
| |
|
|
| 3.1 |
|
Certificate
of Incorporation. Incorporated by reference to Exhibit 3(i) of the Company’s Registration Statement on Form S-1 File Number
333-192997 filed December 20, 2013. |
| 3.2 |
|
Bylaws.
Incorporated by reference to Exhibit 3(ii) of the Company’s Registration Statement on Form S-1 File Number 333-192997 filed
December 20, 2013. |
| 3.3 |
|
Certificate
of Amendment to the Certificate of Incorporation filled December 23, 2014. Previously Filed. |
| 3.4 |
|
Certificate
of Amendment to the Certificate of Incorporation filled January 5, 2015. Previously Filed. |
| 3.5 |
|
Certificate
of Designation of old Series A Preferred Stock. Previously Filed, |
| 3.6 |
|
Certificate
of Designation of Series B Preferred Stock. Previously Filed. |
| 3.7 |
|
Certificate
of Change filed April 3, 2021. Previously Filed, |
| 3.8 |
|
Certificate
of Change of Certificate of Designation filed April 12, 2021. Previously Filed, |
| 3.9 |
|
Certificate
of Change filed July 14, 2021. Previously Filed, |
| 3.10 |
|
Certificate
of Designation of Series C Preferred Stock as amended and restated. Previously Filed, |
| 3.11 |
|
Certificate
of Designation of Series D Preferred Stock. Previously Filed,. |
| 3.12 |
|
Certificate
of Designation of new Series A Preferred Stock. Previously Filed. |
| 3.13 |
|
Certificate
of Amendment, name change. Previously Filed. |
| 10.1 |
|
Consulting
Agreement between the Company and David Stybr. Previously Filed. |
| 10.2 |
|
Consulting
Agreement between the Company and Justin Mathews. Previously Filed. |
| 10.3 |
|
Order appointing custodian of the Corporation. Previously Filed, |
| 10.4 |
|
Stock Purchase Agreement, March 2022. Previously Filed, |
| 10.5 |
|
Agreement, dated March 31, 2022, between David Stybr and Livento Group, LLC. Previously Filed, |
LIVENTO
GROUP, INC.
INDEX
TO UNAUDITED FINANCIAL STATEMENTS
LIVENTO
GROUP, INC.
BALANCE
SHEETS
| | |
September
30, 2022
(Unaudited) | | |
December
31, 2021
Audited | |
| ASSETS | |
| | | |
| | |
| Current
Assets: | |
| | | |
| | |
| Cash | |
| 105,757 | | |
| - | |
| Account
Receivables | |
| 467,980 | | |
| - | |
| Total
Current Asset | |
$ | 573,738 | | |
$ | | |
| | |
| | | |
| | |
| Non-Current
Assets | |
| | | |
| | |
| Long
term investments | |
| 9,929,359 | | |
| - | |
| Intangible
Assets (net) | |
| 12,436,767 | | |
| - | |
| Total
Non-Current Asset | |
$ | 22,366,126 | | |
$ | - | |
| | |
| | | |
| | |
| Total
Assets | |
$ | 22,939,864 | | |
$ | - | |
| | |
| | | |
| | |
| LIABILITIES
AND STOCKHOLDERS’ EQUITY | |
| | | |
| | |
| Current
Liabilities: | |
| | | |
| | |
| Account
Payable | |
| 314,999 | | |
$ | 10,000 | |
| Loan
Payables | |
| 98,040 | | |
| - | |
| Other
Payables | |
| 86,400 | | |
| - | |
| Total
current liabilities | |
$ | 499,439 | | |
$ | 10,000 | |
| | |
| | | |
| | |
| Stockholder’s
Equity: | |
| | | |
| | |
| Preferred
stock C, $0.0001 par value, 24,000,000 shares Authorized, and 1,204,426 shares issued | |
| 120 | | |
| - | |
| Preferred
stock D, $0.01 par value, 1,000,000 shares Authorized, and 159,861 shares issued | |
| 1,599 | | |
| | |
| Common
stock, $0.0001 par value, 500,000,000 shares Authorized 219,001,268 shares issued at 09/30/2022 765,895,613 shares issued at 12/31/2021 | |
| 21,900 | | |
| 76,590 | |
| Additional
paid-in capital | |
| 35,307,578 | | |
| 12,641,673 | |
| Accumulated
deficit | |
| (-12,728,263) | | |
| (12,652,790 | ) |
| Net
Income | |
| -162,509 | | |
| -75,473 | |
| Total
Stockholders’ Equity | |
$ | 22,440,425 | | |
$ | (10,000 | ) |
| | |
| | | |
| | |
| Total
Liabilities and Stockholders’ Equity | |
$ | 22,939,864 | | |
$ | - | |
The
accompanying notes are an integral part of these financial statements.
LIVENTO
GROUP, INC.
STATEMENTS
OF OPERATONS
| | |
For
the Three Months Ended
September 30, 2022 | | |
For
the Three Months Ended
September 30, 2021 | | |
For
the Nine Months Ended
September 30, 2022 | | |
For
the Nine Months Ended
September 30, 2021 | |
| Revenue | |
| 523,013 | | |
| - | | |
| 1,474,513 | | |
| - | |
| Cost
of revenue | |
| 461,606 | | |
| - | | |
| 1,298,167 | | |
| - | |
| Gross
Profit | |
$ | 61,407 | | |
$ | - | | |
$ | 176,346 | | |
$ | - | |
| | |
| | | |
| | | |
| | | |
| | |
| Operating
expenses: | |
| | | |
| | | |
| | | |
| | |
| | |
| | | |
| | | |
| | | |
| | |
| Professional
fee | |
| 191,376 | | |
| | | |
| 225,170 | | |
| | |
| General
& administrative expenses | |
| 14,216 | | |
| 343 | | |
| 83,685 | | |
| 70,343 | |
| Total
Operating Expenses | |
$ | (205,592 | ) | |
$ | (343 | ) | |
$ | (338,855 | ) | |
$ | (70,343 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Income
/(loss) from operation | |
| (144,185 | ) | |
| (343 | ) | |
| (162,509 | ) | |
| (70,343 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Net
Income /(Loss) | |
$ | (144,185 | ) | |
$ | (343 | ) | |
$ | (162,509 | ) | |
$ | (70,343 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Income
per share | |
$ | (0.01 | ) | |
$ | (0.01 | ) | |
$ | (0.01 | ) | |
$ | (0.01 | ) |
| Weighted
average shares outstanding | |
| 219,001,268 | | |
| 764,596,325 | | |
| 219,001,268 | | |
| 764,596,325 | |
The
accompanying notes are an integral part of these financial statements.
LIVENTO
GROUP, INC.
STATEMENTS
OF CHANGES IN EQUITY
| | |
Preferred
Stock Shares | | |
Common
Stock Shares | | |
Additional
Paid
in | | |
Accumulated | | |
| |
| | |
Shares | | |
Amount | | |
Shares | | |
Amount | | |
Capital | | |
Deficit | | |
Total | |
| Balance
at December 31, 2020 | |
| 1,917,720 | | |
| 192 | | |
| 59,254,155 | | |
| 5,925 | | |
| 12,641,673 | | |
| (-12,647,790) | | |
| 0 | |
| Net
Change | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | | |
| (-5,000) | | |
| (-5,000) | |
| Balance
at March 31, 2021 | |
| 1,917,720 | | |
| 192 | | |
| 59,254,155 | | |
| 5,925 | | |
| 12,641,673 | | |
| (-12,652,790) | | |
| (-5,000) | |
| Net
Change | |
| 0 | | |
| 0 | | |
| 700,000,000 | | |
| 70,000 | | |
| 0 | | |
| 0 | | |
| 70,000 | |
| Balance
at June 30, 2021 | |
| 1,917,720 | | |
| 192 | | |
| 759,254,155 | | |
| 75,925 | | |
| 12,641,673 | | |
| (-12,652,790) | | |
| 65,000 | |
| Net
Change | |
| (-1,909,620) | | |
| (191 | ) | |
| 5,342,170 | | |
| 534 | | |
| 0 | | |
| 0 | | |
| 343 | |
| Balance
at September 30, 2021 | |
| 8,100 | | |
| 1 | | |
| 764,596,325 | | |
| 76,459 | | |
| 12,641,673 | | |
| (-12,652,790) | | |
| 65,343 | |
| Net
Change | |
| (-8,000) | | |
| (1 | ) | |
| 1,299,288 | | |
| 130 | | |
| 0 | | |
| 0 | | |
| 129 | |
| Balance
at December 31, 2021 | |
| 100 | | |
| 0 | | |
| 765,895,613 | | |
| 76,589 | | |
| 12,641,673 | | |
| (-12,652,790) | | |
| 65,472 | |
| Net
Change | |
| 6,204,426 | | |
| 620 | | |
| (-566,377,126) | | |
| (-56,638) | | |
| 20,515,960 | | |
| (-75,473) | | |
| 20,384,469 | |
| Balance
at March 31, 2022 | |
| 6,204,526 | | |
| 621 | | |
| 199,518,487 | | |
| 19,951 | | |
| 33,157,633 | | |
| (-12,728,263) | | |
| 20,449,942 | |
| Net
Change | |
| (-5,000,000) | | |
| (-500) | | |
| 9,482,781 | | |
| 948 | | |
| 1,749,552 | | |
| 0 | | |
| 1,750,000 | |
| Balance
at June 30, 2022 | |
| 1,204,526 | | |
| 121 | | |
| 209,001,268 | | |
| 20,900 | | |
| 34,907,184 | | |
| (-12,728,263) | | |
| 22,199,942 | |
| Net
Change | |
| 159,861 | | |
| 1,599 | | |
| 10,000,000 | | |
| 1,000 | | |
| 400,393 | | |
| 0 | | |
| 402,992 | |
| Balance
at September 30, 2022 | |
| 1,364,387 | | |
| 1,719 | | |
| 219,001,268 | | |
| 21,900 | | |
| 35,307,578 | | |
| (-12,728,263) | | |
| 22,602,934 | |
The
accompanying notes are an integral part of these financial statements.
LIVENTO
GROUP, INC.
STATEMENTS
OF CASH FLOWS
| | |
September
30, 2022 | | |
September
30, 2021 | |
| CASH
FLOWS FROM OPERATING ACTIVITIES: | |
| | | |
| | |
| Net
loss | |
$ | (162,509 | ) | |
$ | (56,395 | ) |
| Adjustments
to reconcile net loss to net cash used in operating activities: | |
| | | |
| | |
| Changes
in operating assets and liabilities: | |
| | | |
| | |
| Accounts
receivables | |
| (630,570 | ) | |
| - | |
| Accounts
payable and accrued expenses | |
$ | 624,973 | | |
| 56,395 | |
| Net
Cash Used in Operating Activities | |
| 5,597 | | |
| - | |
| | |
| | | |
| | |
| CASH
FLOWS FROM INVESTING ACTIVITIES: | |
| | | |
| | |
| Accumulated
Depreciation | |
| - | | |
| - | |
| Furniture
and Equipment | |
| - | | |
| - | |
| Property
& Equipment | |
| (987,014 | ) | |
| - | |
| Deposits | |
| - | | |
| - | |
| Security
Deposits Asset | |
| - | | |
| - | |
| Net
Cash Used in Investing Activities | |
$ | (987,014 | ) | |
| - | |
| | |
| | | |
| | |
| CASH
FLOWS FROM FINANCING ACTIVITIES: | |
| | | |
| | |
| Additional
Paid in capital | |
| 601,393 | | |
| - | |
| Preference
shares | |
| 1,599 | | |
| - | |
| Common
shares issued | |
| - | | |
| - | |
| Net
Cash Provided by Financing Activities | |
$ | 602,992 | | |
| - | |
| | |
| | | |
| | |
| NET
INCREASE IN CASH | |
| (378,426 | ) | |
| - | |
| | |
| | | |
| | |
| CASH
AT BEGINNING OF YEAR | |
| 484,183 | | |
| - | |
| | |
| | | |
| | |
| CASH
AT END OF PERIOD | |
$ | 105,757 | | |
$ | - | |
The
accompanying notes are an integral part of these financial statements.
LIVENTO
GROUP, INC.
Notes
to Financial Statements
September
30, 2022, and December 31, 2021
NOTE
1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
NuGene
International, Inc. is a Nevada entity, founded in 2013, previously specializing in the development and marketing of a diverse line of
proprietary stem cell-based products, merged on March 31, 2022 with Livento Group LLC, and confirmed a change in its business model,
redirecting its focus to Livento’s primary sectors; artificial intelligence & machine learning products, and film & television
production under BOXO brand.
Livento
Group LLC brought into NUGN excess of $21,000,000 in combined real estate and cash, equities, proprietary AI and Machine Learning programs,
development projects and film projects. The assets description can be found in form10 filing.
Company
is redirecting its focus to BOXO brand and is using proceeds from real estate in it. BOXO has highest possible revenue and margin potential
from businesses around Livento and as such became main focus of business for the Company.
NOTE
2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis
of Presentation
The
unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of
America (“U.S. GAAP”).
Use
of Estimates
The
preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates
include the estimated useful lives of property and equipment. Actual results could differ from those estimates.
Stock
based Compensation
The
calculation of share-based employee compensation expense involves estimates that require management judgment. These estimates include
the fair value of each of the stock option awards granted, which is estimated on the date of grant using a Black-Scholes option pricing
model. There are two significant inputs into the Black-Scholes option pricing model: expected volatility and expected term. The assumptions
used in calculating the fair value of share-based payment awards represent management’s best estimates, but these estimates involve
inherent uncertainties and the application of managements judgement in addition, the Company is required to estimate the expected forfeiture
rate, and only recognize expense for those shares expected to vest. As a result, if factors change and the company’s uses different
assumptions, stock bases compensation expense could be different from what the company has recorded in the current period.
Concentrations
of Credit Risk
The
Company maintains its cash in bank deposit accounts, the balances of which at times may exceed federally insured limits. The Company
continually monitors its banking relationships and consequently has not experienced any losses in its accounts. Management believes the
Company is not exposed to any significant credit risk on cash.
Cash
Equivalents
The
Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. As of
September 30, 2022, there is $105,757 in cash equivalent.
Accounts
Receivable
Management
reviews accounts receivable periodically to determine if any receivables will potentially be uncollectible. Management’s evaluation
includes several factors including the aging of the accounts receivable balances, a review of significant past due accounts, economic
conditions, and our historical write- off experience, net of recoveries. The Company includes any accounts receivable balances that are
determined to be uncollectible, along with a general reserve, in its allowance for doubtful accounts. After all attempts to collect a
receivable have failed, the receivable is written off against the allowance. The Company’s allowance for doubtful accounts was
$0 and $0 As of September 30, 2022, and 2021, respectively.
Fair
Value of Financial Instruments
The
Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial
instruments and paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure
the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles
generally accepted in the United States of America (U.S. GAAP) and expands disclosures about fair value measurements. To increase consistency
and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which
prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives
the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable
inputs. The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:
Level
1: Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.
Level
2: Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable
as of the reporting date.
Level
3: Pricing inputs that are generally unobservable inputs and not corroborated by market data.
The
carrying amount of the Company’s financial assets and liabilities, such as cash, prepaid expenses and accrued expenses approximate
their fair value because of the short maturity of those instruments. The Company’s notes payable approximates the fair value of
such instruments based upon management’s best estimate of interest rates that would be available to the Company for similar financial
arrangements at September 30, 2022
Revenue
Recognition
Revenue
is recognized when a customer obtains control of promised goods or services and is recognized in an amount that reflects the consideration
that an entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature,
amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The amount of revenue that is recorded
reflects the consideration that the Company expects to receive in exchange for those goods. The Company applies the following five-step
model in order to determine this amount: (i) identification of the promised goods in the contract; (ii) determination of whether the
promised goods are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of
the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance
obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation.
The
Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled
to in exchange for the goods or services it transfers to the customer. Once a contract is determined to be within the scope of ASC 606
at contract inception, the Company reviews the contract to determine which performance obligations the Company must deliver and which
of these performance obligations are distinct. The Company recognizes as revenues the amount of the transaction price that is allocated
to the respective performance obligation when the performance obligation is satisfied or as it is satisfied. Generally, the Company’s
performance obligations are transferred to customers at a point in time, typically upon delivery.
Income
taxes
The
Company follows Section 740-10-30 of the FASB Accounting Standards Codification, which requires recognition of deferred tax assets and
liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under
this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets
and liabilities using enacted tax rates in effect for the fiscal year in which the differences are expected to reverse. Deferred tax
assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be
realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the fiscal
years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities
of a change in tax rates is recognized in the Statements of Income in the period that includes the enactment date.
The
Company adopted section 740-10-25 of the FASB Accounting Standards Codification (“Section 740-10-25”) with regards to uncertainty
income taxes. Section 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return
should be recorded in the financial statements. Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain
tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based
on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured
based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Section
740-10-25 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods
and requires increased disclosures. The Company had no material adjustments to its liabilities for unrecognized income tax benefits according
to the provisions of Section 740-10-25.
Stock-based
Compensation
The
Company accounts for equity-based transactions with nonemployees under the provisions of ASC Topic No. 505-50, Equity-Based Payments
to Non-Employees (“ASC 505-50”). ASC 505-50 establishes that equity-based payment transactions with nonemployees shall
be measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably
measurable. The fair value of common stock issued for payments to nonemployees is measured at the market price on the date of grant.
The fair value of equity instruments, other than common stock, is estimated using the Black-Scholes option valuation model. In general,
we recognize the fair value of the equity instruments issued as deferred stock compensation and amortize the cost over the term of the
contract.
The
Company accounts for employee stock-based compensation in accordance with the guidance of FASB ASC Topic 718, Compensation—Stock
Compensation, which requires all share-based payments to employees, including grants of employee stock options, to be recognized
in the financial statements based on their fair values. The fair value of the equity instrument is charged directly to compensation expense
and credited to additional paid-in capital over the period during which services are rendered.
Net
Income (Loss) per Common Share
Net
income (loss) per common share is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic net income
(loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding
during the period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average number
of shares of common stock and potentially outstanding shares of common stock during the period. The weighted average number of common
shares outstanding and potentially outstanding common shares assumes that the Company incorporated as of the beginning of the first period
presented.
The
Company’s diluted loss per share is the same as the basic loss per share for the period ended September 30, 2022, as the inclusion
of any potential shares would have had an anti-dilutive effect due to the Company generating a loss.
Recently
Issued Accounting Pronouncements
Topic
606, Revenue from Contracts with Customers, of the Financial Accounting Standards Board’s (FASB) Accounting Standards Codification
(ASC). The guidance in ASC 606 was originally issued by the FASB in May 2014 in Accounting Standards Update (ASU) 2014-09, Revenue
from Contracts with Customers (Topic 606). Since then, the FASB has issued several ASUs that have revised or clarified the guidance
in ASC 606. The Company is in the process of evaluating the impact of this accounting standard update.
On
June 20, 2018, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2018-07, Compensation—Stock
Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. ASU 2018-07 is intended to reduce cost and
complexity and to improve financial reporting for share-based payments to nonemployees (for example, service providers, external legal
counsel, suppliers, etc.). Under the new standard, companies will no longer be required to value non-employee awards differently from
employee awards. Meaning that companies will value all equity classified awards at their grant-date under ASC718 and forgo revaluing
the award after this date. The guidance is effective for interim and annual periods beginning after December 15, 2018.
In
January 2017, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standards Update (“ASU”)
2017-01, Business Combinations (Topic 805) Clarifying the Definition of a Business. The amendments in this update clarify the
definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted
for as acquisitions or disposals of assets or businesses. The definition of a business affects many areas of accounting including acquisitions,
disposals, goodwill, and consolidation. The guidance is effective for interim and annual periods beginning after December 15, 2017 and
should be applied prospectively on or after the effective date. The Company is in the process of evaluating the impact of this accounting
standard update.
In
February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 requires lessees to recognize lease assets and lease
liabilities on the balance sheet and requires expanded disclosures about leasing arrangements. ASU 2016-02 is effective for fiscal years
beginning after December 31, 2018 and interim periods in fiscal years beginning after December 31, 2018, with early adoption permitted.
The Company is in the process of evaluating the impact of this accounting standard update.
The
Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on
the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements
that have been issued that might have a material impact on its financial position or results of operations.
NOTE
3– INCOME TAXES
Deferred
taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating
loss and tax credit carry forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences
are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a
valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets
will not be realized. The Company has evaluated Staff Accounting Bulletin No. 118 regarding the impact of the decreased tax rates of
the Tax Cuts & Jobs Act. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the
date of enactment. The U.S. federal income tax rate of 21% is being used due to the new tax law recently enacted.
The
provision for Federal income tax consists of the following at September 30:
| | |
2022 | | |
2021 | |
| Federal
income tax benefit attributable to: | |
| | | |
| | |
| Current
Operations | |
$ | | | |
$ | | |
| Less:
valuation allowance | |
| | | |
| | |
| Net
provision for Federal income taxes | |
$ | — | | |
$ | — | |
The
cumulative tax effect at the expected rate of 21% of significant items comprising our net deferred tax amount is as follows at September
30:
| | |
2022 | | |
2020 | |
| Deferred
tax asset attributable to: | |
| | | |
| | |
| Net
operating loss carryover | |
$ | 12,728,263 | | |
$ | 12,647,790 | |
| Less:
valuation allowance | |
| (12,728,263 | ) | |
| (12,647,790 | ) |
| Net
deferred tax asset | |
$ | - | | |
$ | - | |
At
September 30, 2022, the Company had net operating loss carry forwards of approximately $(12,728,263) that maybe offset against future
taxable income. No tax benefit has been reported in the December 31, 2021, financial statements since the potential tax benefit is offset
by a valuation allowance of the same amount.
On
December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cut and Jobs Act (the “Tax
Act”). The Tax Act establishes new tax laws that affects 2018 and future years, including a reduction in the U.S. federal corporate
income tax rate to 21% effective January 1, 2018.
Due
to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards for Federal income tax reporting
purposes are subject to annual limitations. Should a change in ownership occur, net operating loss carry forwards may be limited as to
use in future years.
ASC
Topic 740 provides guidance on the accounting for uncertainty in income taxes recognized in a company’s financial statements. Topic
740 requires a company to determine whether it is more likely than not that a tax position will be sustained upon examination based upon
the technical merits of the position. If the more-likely-than-not threshold is met, a company must measure the tax position to determine
the amount to recognize in the financial statements.
The
Company includes interest and penalties arising from the underpayment of income taxes in the statements of operations in the provision
for income taxes. As of September 30, 2022, the Company had no accrued interest or penalties related to uncertain tax positions.
NOTE
4 – GOING CONCERN
The
Company’s financial statements, as of September 30, 2022, are prepared using generally accepted accounting principles in the United
States of America applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal
course of business.
The
Company has tried to establish an ongoing and stable source of revenues and cash flows sufficient to cover its operating costs and allow
it to continue as a going concern. The Company has accumulated a net loss of $162,509 as of September 30, 2022 where amortization is
in amount of $1,002,050. The cash balances as of September 30, 2022, were $105,757. These factors, among others, support the ability
of the Company to continue to fulfill its targets.
However,
management cannot assure that the Company will accomplish any of its plans. These financial statements do not include any adjustments
related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should
the Company be unable to continue as a going concern.
NOTE
5 - SUBSEQUENT EVENTS
In
accordance with ASC Topic 855, “Subsequent Events”, which establishes general standards of accounting for and disclosure
of events that occur after the balance sheet date, but the financial statements are issued, the Company has evaluated all events or transactions
that occurred after the period ended and have no events to disclosed.
NUGENE
INTERNATIONAL, INC.
INDEX
TO AUDITED FINANCIAL STATEMENTS
| Report
of Independent Registered Public Accounting Firm |
45 |
| |
|
| Balance Sheets as of December 31, 2021, and December 31, 2020 |
46 |
| |
|
| Statements of Operations for the years ended December 31, 2021, and December 31, 2020 |
47 |
| |
|
| Statements of Stockholders’ Equity for the years ended December 31, 2021, and December 31, 2020 |
48 |
| |
|
| Statements of Cash Flows for the years ended December 31, 2021, and December 31, 2020 |
49 |
| |
|
| Notes to the Financial Statements |
50 |
Report
of Independent Registered Public Accounting Firm
To
the shareholders and the board of Nugene International, Inc.
We
have audited the accompanying balance sheets of Nugene International, Inc. (the “Company”) as of
December 31, 2021, and 2020 the related statements of operations, changes in
shareholders’ equity and cash flows, for each of the two years in the period ended December 31, 2021, and 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, 2021, and 2020, and the results of its operations and its cash flows for the year ended December 31, 2021, and 2020, in conformity
with U.S. generally accepted accounting principles.
Going
Concern
The
accompanying financial statements have been prepared assuming the company will continue as a going concern as disclosed in Note 3 to
the financial statement, the Company has continuously incurred a net loss of $75,192 for the year ended December 31, 2021, and an accumulated
deficit of $12,727,982 as at December 31, 2021. The continuation of the Company as a going concern through December 31, 2021, is dependent
upon improving the profitability and the continuing financial support from its stockholders. Management believes the existing shareholders
or external financing will provide the additional cash to meet the Company’s obligations as they become due.
These
factors raise substantial doubt about the company ability to continue as a going concern. These financial statements do not include any
adjustments that might result from the outcome of the 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 audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board
(United States) (“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 audits 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. Our audits 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 audits 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 audits provide a reasonable basis for
our opinion. 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 audits, 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
OLAYINKA
OYEBOLA & CO.
(Chartered
Accountants)
We
have served as the Company’s auditor since April 2022.
November
11th, 2022.
Lagos,
Nigeria
NUGENE INTERNATIONAL, INC.
BALANCE
SHEETS
| | |
December 30, 2021
Audited | | |
December 31, 2020
Audited | |
| ASSETS | |
| | | |
| | |
| Current Assets: | |
| | | |
| | |
| Cash | |
| - | | |
| - | |
| Account Receivables | |
| - | | |
| - | |
| Total Current Asset | |
$ | - | | |
$ | | |
| | |
| | | |
| | |
| Non-Current Assets | |
| | | |
| | |
| Long term investments | |
| - | | |
| - | |
| Intangible Assets (net) | |
| - | | |
| - | |
| Total Non-Current Asset | |
$ | - | | |
$ | - | |
| | |
| | | |
| | |
| Total Assets | |
$ | - | | |
$ | - | |
| | |
| | | |
| | |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |
| | | |
| | |
| Current Liabilities: | |
| | | |
| | |
| Account Payable | |
| 10,000 | | |
$ | 5,000 | |
| Loan Payables | |
| - | | |
| - | |
| Other Payables | |
| - | | |
| - | |
| Total current liabilities | |
$ | 10,000 | | |
$ | 5,000 | |
| | |
| | | |
| | |
| Stockholder’s Equity: | |
| | | |
| | |
| Preferred stock, $0.0001 par value, 24,000,000 shares Authorized, and 0 shares
issued at 12/31/2021 1,917,720 shares issued at 12/31/2020 | |
| - | | |
| 192 | |
| Common stock, $0.0001 par value, 800,000,000 shares Authorized, and 765,895,613
shares issued at 12/31/2021 59,254,155 shares issued at 12/31/2020 | |
| 76,590 | | |
| 5,925 | |
| Additional paid-in capital | |
| 12,641,673 | | |
| 12,641,673 | |
| Accumulated deficit | |
| (12,652,790 | ) | |
| (12,647,790 | ) |
| Net Income | |
| (75,473 | ) | |
| (5,000 | ) |
| Total Stockholders’ Equity | |
$ | (10,000 | ) | |
$ | (5,000 | ) |
| | |
| | | |
| | |
| Total Liabilities and Stockholders’ Equity | |
$ | - | | |
$ | - | |
The
accompanying notes are an integral part of these financial statements.
NUGENE
INTERNATIONAL, INC.
STATEMENTS
OF OPERATIONS
| | |
For the year ended
December 31, 2021 | | |
For the year ended
December 31, 2020 | |
| Revenue | |
| - | | |
| - | |
| Cost of revenue | |
| - | | |
| - | |
| Gross Profit | |
$ | - | | |
$ | - | |
| | |
| | | |
| | |
| Operating expenses: | |
| - | | |
| - | |
| | |
| | | |
| | |
| Professional fee | |
| - | | |
| - | |
| General & administrative expenses | |
| 75,192 | | |
| 5,000 | |
| Total Operating Expenses | |
$ | (75,192 | ) | |
$ | (5,000 | ) |
| | |
| | | |
| | |
| Income /(loss) from operation | |
| (75,192 | ) | |
| (5,000 | ) |
| | |
| | | |
| | |
| Net Other Income | |
| (281 | ) | |
| - | |
| | |
| | | |
| | |
| Net Income /(Loss) | |
$ | (75,473 | ) | |
$ | (5,000 | ) |
| | |
| | | |
| | |
| Income per share | |
$ | (0.01 | ) | |
$ | (0.01 | ) |
| Weighted average shares outstanding | |
| 765,895,613 | | |
| 59,254,155 | |
The
accompanying notes are an integral part of these financial statements.
NUGENE INTERNATIONAL,
INC.
STATEMENTS OF CHANGES IN EQUITY
| | |
Preferred Stock Shares | | |
Common Stock Shares | | |
Additional Paid in | | |
Accumulated | | |
| |
| | |
Shares | | |
Amount | | |
Shares | | |
Amount | | |
Capital | | |
Deficit | | |
Total | |
| Balance at December 31, 2019 | |
| 1,917,720 | | |
| 192 | | |
| 59,254,155 | | |
| 5,925 | | |
| 12,641,673 | | |
| (-12,647,790 | ) | |
| 0 | |
| Net Change | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | |
| Balance at March 31, 2020 | |
| 1,917,720 | | |
| 192 | | |
| 59,254,155 | | |
| 5,925 | | |
| 12,641,673 | | |
| (-12,647,790 | ) | |
| 0 | |
| Net Change | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | |
| Balance at June 30, 2020 | |
| 1,917,720 | | |
| 192 | | |
| 59,254,155 | | |
| 5,925 | | |
| 12,641,673 | | |
| (-12,647,790 | ) | |
| 0 | |
| Net Change | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | |
| Balance at September 30, 2020 | |
| 1,917,720 | | |
| 192 | | |
| 59,254,155 | | |
| 5,925 | | |
| 12,641,673 | | |
| (-12,647,790 | ) | |
| 0 | |
| Net Change | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | |
| Balance at December 31, 2020 | |
| 1,917,720 | | |
| 192 | | |
| 59,254,155 | | |
| 5,925 | | |
| 12,641,673 | | |
| (-12,647,790 | ) | |
| 0 | |
| Net Change | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | | |
| (-5,000 | ) | |
| (-5,000 | ) |
| Balance at March 31, 2021 | |
| 1,917,720 | | |
| 192 | | |
| 59,254,155 | | |
| 5,925 | | |
| 12,641,673 | | |
| (-12,652,790 | ) | |
| (-5,000)
| |
| Net Change | |
| 0 | | |
| 0 | | |
| 700,000,000 | | |
| 70,000 | | |
| 0 | | |
| 0 | | |
| 70,000 | |
| Balance at June 30, 2021 | |
| 1,917,720 | | |
| 192 | | |
| 759,254,155 | | |
| 75,925 | | |
| 12,641,673 | | |
| (-12,652,790 | ) | |
| 65,000 | |
| Net Change | |
| (-1,909,620 | ) | |
| (191 | ) | |
| 5,342,170 | | |
| 534 | | |
| 0 | | |
| 0 | | |
| 343 | |
| Balance at September 30, 2021 | |
| 8,100 | | |
| 1 | | |
| 764,596,325 | | |
| 76,459 | | |
| 12,641,673 | | |
| (-12,652,790 | ) | |
| 65,343 | |
| Net Change | |
| (-8,000 | ) | |
| (1 | ) | |
| 1,299,288 | | |
| 130 | | |
| 0 | | |
| 0 | | |
| 129 | |
| Balance at December 31, 2021 | |
| 100 | | |
| 0 | | |
| 765,895,613 | | |
| 76,589 | | |
| 12,641,673 | | |
| (-12,652,790 | ) | |
| 65,472 | |
The
accompanying notes are an integral part of these financial statements.
NUGENE
INTERNATIONAL, INC.
STATEMENTS
OF CASH FLOWS
| | |
For the Year ended
December 31, 2021 | | |
For the Year ended
December 31, 2020 | |
| CASH FLOWS FROM OPERATING ACTIVITIES: | |
| | | |
| | |
| Net loss | |
$ | (75,473 | ) | |
$ | (5,000 | ) |
| Adjustments to reconcile net loss to net cash used in operating activities: | |
| | | |
| | |
| Changes in operating assets and liabilities: | |
| | | |
| | |
| Accounts receivables | |
| - | | |
| - | |
| Accounts payable and accrued expenses | |
$ | 75,473 | | |
| 5,000 | |
| Net Cash Used in Operating Activities | |
| - | | |
| - | |
| | |
| | | |
| | |
| CASH FLOWS FROM INVESTING ACTIVITIES: | |
| | | |
| | |
| Accumulated Depreciation | |
| - | | |
| - | |
| Furniture and Equipment | |
| - | | |
| - | |
| Property & Equipment | |
| - | | |
| - | |
| Deposits | |
| - | | |
| - | |
| Security Deposits Asset | |
| - | | |
| - | |
| Net Cash Used in Investing Activities | |
$ | - | | |
| - | |
| | |
| | | |
| | |
| CASH FLOWS FROM FINANCING ACTIVITIES: | |
| | | |
| | |
| Additional Paid in capital | |
| - | | |
| - | |
| Preference shares | |
| - | | |
| - | |
| Common shares issued | |
| - | | |
| - | |
| Net Cash Provided by Financing Activities | |
$ | - | | |
| - | |
| | |
| | | |
| | |
| NET INCREASE IN CASH | |
| - | | |
| - | |
| | |
| | | |
| | |
| CASH AT BEGINNING OF YEAR | |
| - | | |
| - | |
| | |
| | | |
| | |
| CASH AT END OF PERIOD | |
$ | - | | |
$ | - | |
The
accompanying notes are an integral part of these financial statements.
NUGENE INTERNATIONAL, INC.
Notes
to Financial Statements
December
31, 2021, and December 31, 2020
NOTE
1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
NuGene
International, Inc (formerly Bling Marketing) was incorporated in Nevada.
NOTE
2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis
of Presentation
The
unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States
of America (“U.S. GAAP”).
Use
of Estimates
The
preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates
include the estimated useful lives of property and equipment. Actual results could differ from those estimates.
Stock
based Compensation
The
calculation of share-based employee compensation expense involves estimates that require management judgment. These estimates include
the fair value of each of the stock option awards granted, which is estimated on the date of grant using a Black-Scholes option pricing
model. There are two significant inputs into the Black-Scholes option pricing model: expected volatility and expected term. The assumptions
used in calculating the fair value of share-based payment awards represent management’s best estimates, but these estimates involve
inherent uncertainties and the application of managements judgement in addition, the Company is required to estimate the expected forfeiture
rate, and only recognize expense for those shares expected to vest. As a result, if factors change and the company’s uses different
assumptions, stock bases compensation expense could be different from what the company has recorded in the current period.
Concentrations
of Credit Risk
The
Company maintains its cash in bank deposit accounts, the balances of which at times may exceed federally insured limits. The Company
continually monitors its banking relationships and consequently has not experienced any losses in its accounts. Management believes the
Company is not exposed to any significant credit risk on cash.
Cash
Equivalents
The
Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. As of
December 31, 2021, there is $0 in cash equivalent.
Accounts
Receivable
Management
reviews accounts receivable periodically to determine if any receivables will potentially be uncollectible. Management’s evaluation
includes several factors including the aging of the accounts receivable balances, a review of significant past due accounts, economic
conditions, and our historical write- off experience, net of recoveries. The Company includes any accounts receivable balances that are
determined to be uncollectible, along with a general reserve, in its allowance for doubtful accounts. After all attempts to collect a
receivable have failed, the receivable is written off against the allowance. The Company’s allowance for doubtful accounts was
$0 and $0 As of December 30, 2021, and 2020, respectively.
Fair
Value of Financial Instruments
The
Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial
instruments and paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure
the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles
generally accepted in the United States of America (U.S. GAAP) and expands disclosures about fair value measurements. To increase consistency
and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which
prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives
the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable
inputs. The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:
Level
1: Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.
Level
2: Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable
as of the reporting date.
Level
3: Pricing inputs that are generally unobservable inputs and not corroborated by market data.
The
carrying amount of the Company’s financial assets and liabilities, such as cash, prepaid expenses and accrued expenses approximate
their fair value because of the short maturity of those instruments. The Company’s notes payable approximates the fair value
of such instruments based upon management’s best estimate of interest rates that would be available to the Company for similar
financial arrangements at December 31, 2021.
Revenue
Recognition
Revenue
is recognized when a customer obtains control of promised goods or services and is recognized in an amount that reflects the consideration
that an entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature,
amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The amount of revenue that is recorded
reflects the consideration that the Company expects to receive in exchange for those goods. The Company applies the following five-step
model in order to determine this amount: (i) identification of the promised goods in the contract; (ii) determination of whether the
promised goods are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of
the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance
obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation.
The
Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled
to in exchange for the goods or services it transfers to the customer. Once a contract is determined to be within the scope of ASC 606
at contract inception, the Company reviews the contract to determine which performance obligations the Company must deliver and which
of these performance obligations are distinct. The Company recognizes as revenues the amount of the transaction price that is allocated
to the respective performance obligation when the performance obligation is satisfied or as it is satisfied. Generally, the Company’s
performance obligations are transferred to customers at a point in time, typically upon delivery.
Income
taxes
The
Company follows Section 740-10-30 of the FASB Accounting Standards Codification, which requires recognition of deferred tax assets and
liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under
this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets
and liabilities using enacted tax rates in effect for the fiscal year in which the differences are expected to reverse. Deferred tax
assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be
realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the fiscal
years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities
of a change in tax rates is recognized in the Statements of Income in the period that includes the enactment date.
The
Company adopted section 740-10-25 of the FASB Accounting Standards Codification (“Section 740-10-25”) with regards to uncertainty
income taxes. Section 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return
should be recorded in the financial statements. Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain
tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based
on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured
based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Section
740-10-25 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods
and requires increased disclosures. The Company had no material adjustments to its liabilities for unrecognized income tax benefits according
to the provisions of Section 740-10-25.
Stock-based
Compensation
The
Company accounts for equity-based transactions with nonemployees under the provisions of ASC Topic No. 505-50, Equity-Based Payments
to Non-Employees (“ASC 505-50”). ASC 505-50 establishes that equity-based payment transactions with nonemployees shall
be measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably
measurable. The fair value of common stock issued for payments to nonemployees is measured at the market price on the date of grant.
The fair value of equity instruments, other than common stock, is estimated using the Black-Scholes option valuation model. In general,
we recognize the fair value of the equity instruments issued as deferred stock compensation and amortize the cost over the term of the
contract.
The
Company accounts for employee stock-based compensation in accordance with the guidance of FASB ASC Topic 718, Compensation—Stock
Compensation, which requires all share-based payments to employees, including grants of employee stock options, to be recognized
in the financial statements based on their fair values. The fair value of the equity instrument is charged directly to compensation expense
and credited to additional paid-in capital over the period during which services are rendered.
Net
Income (Loss) per Common Share
Net
income (loss) per common share is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic net income
(loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding
during the period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average number
of shares of common stock and potentially outstanding shares of common stock during the period. The weighted average number of common
shares outstanding and potentially outstanding common shares assumes that the Company incorporated as of the beginning of the first period
presented.
The
Company’s diluted loss per share is the same as the basic loss per share for the period ended December 31, 2021, as the inclusion
of any potential shares would have had an anti-dilutive effect due to the Company generating a loss.
Recently
Issued Accounting Pronouncements
Topic
606, Revenue from Contracts with Customers, of the Financial Accounting Standards Board’s (FASB) Accounting Standards Codification
(ASC). The guidance in ASC 606 was originally issued by the FASB in May 2014 in Accounting Standards Update (ASU) 2014-09, Revenue
from Contracts with Customers (Topic 606). Since then, the FASB has issued several ASUs that have revised or clarified the guidance
in ASC 606. The Company is in the process of evaluating the impact of this accounting standard update.
On
June 20, 2018, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2018-07, Compensation—Stock
Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. ASU 2018-07 is intended to reduce cost and
complexity and to improve financial reporting for share-based payments to nonemployees (for example, service providers, external legal
counsel, suppliers, etc.). Under the new standard, companies will no longer be required to value non-employee awards differently from
employee awards. Meaning that companies will value all equity classified awards at their grant-date under ASC718 and forgo revaluing
the award after this date. The guidance is effective for interim and annual periods beginning after December 15, 2018.
In
January 2017, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standards Update (“ASU”)
2017-01, Business Combinations (Topic 805) Clarifying the Definition of a Business. The amendments in this update clarify the
definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted
for as acquisitions or disposals of assets or businesses. The definition of a business affects many areas of accounting including acquisitions,
disposals, goodwill, and consolidation. The guidance is effective for interim and annual periods beginning after December 15, 2017 and
should be applied prospectively on or after the effective date. The Company is in the process of evaluating the impact of this accounting
standard update.
In
February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 requires lessees to recognize lease assets and lease
liabilities on the balance sheet and requires expanded disclosures about leasing arrangements. ASU 2016-02 is effective for fiscal years
beginning after December 31, 2018 and interim periods in fiscal years beginning after December 31, 2018, with early adoption permitted.
The Company is in the process of evaluating the impact of this accounting standard update.
The
Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on
the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements
that have been issued that might have a material impact on its financial position or results of operations.
NOTE
3 – GOING CONCERN
The
accompanying audited financial statements have been prepared on a going concern basis, which contemplates the realization of assets and
the satisfaction of liabilities in the normal course of business. The Company has an accumulated deficit of $(12,652,790) at December
31, 2021, had a net loss of $(75,473) for the year ended December 31, 2021.
NOTE
4– INCOME TAXES
Deferred
taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating
loss and tax credit carry forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences
are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a
valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets
will not be realized. The Company has evaluated Staff Accounting Bulletin No. 118 regarding the impact of the decreased tax rates of
the Tax Cuts & Jobs Act. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the
date of enactment. The U.S. federal income tax rate of 21% is being used due to the new tax law recently enacted.
The
provision for Federal income tax consists of the
following at December 31:
| | |
2021 | | |
2020 | |
| Federal income tax benefit attributable to: | |
| | | |
| | |
| Current Operations | |
$ | | | |
$ | | |
| Less: valuation allowance | |
| | | |
| | |
| Net provision for Federal income taxes | |
$ | — | | |
$ | — | |
The
cumulative tax effect at the expected rate of
21% of significant items comprising our net deferred tax amount is as follows at December 31:
| | |
2021 | | |
2020 | |
| Deferred tax asset attributable to: | |
| | | |
| | |
| Net operating loss carryover | |
$ | 12,652,790 | | |
$ | 12,652,790 | |
| Less: valuation allowance | |
| (12,652,790 | ) | |
| (12,652,790 | ) |
| Net deferred tax asset | |
$ | - | | |
$ | - | |
At
December 31, 2021, the Company had net operating loss carry forwards of approximately $(12,652,790) that maybe offset against future
taxable income. No tax benefit has been reported in the December 31, 2020, financial statements since the potential tax benefit is offset
by a valuation allowance of the same amount.
On
December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cut and Jobs Act (the “Tax
Act”). The Tax Act establishes new tax laws that affects 2018
and future years, including a reduction in the U.S. federal corporate income tax rate to 21% effective January 1, 2018.
Due
to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards for Federal income tax reporting
purposes are subject to annual limitations. Should a change in ownership occur, net operating loss carry forwards may be limited as to
use in future years.
ASC
Topic 740 provides guidance on the accounting for uncertainty in income taxes recognized in a company’s financial statements. Topic
740 requires a company to determine whether it is more likely than not that a tax position will be sustained upon examination based upon
the technical merits of the position. If the more-likely-than-not threshold is met, a company must measure the tax position to determine
the amount to recognize in the financial statements.
The
Company includes interest and penalties arising from the underpayment of income taxes in the statements of operations in the provision
for income taxes. As of December 31, 2021, the Company had no accrued interest or penalties related to uncertain tax positions.
NOTE
5 - SUBSEQUENT EVENTS
In
accordance with ASC Topic 855, “Subsequent Events”, which establishes general standards of accounting for and disclosure
of events that occur after the balance sheet date, but the financial statements are issued, the Company has evaluated all events or transactions
that occurred after the period ended and have no events to disclosed.
SIGNATURES
Pursuant
to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this Amendment Number 5
to this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized.
| Date:
December 30, 2022 |
Livento
Group, Inc. |
| |
|
|
| |
By |
/s/
David Stybr |
| |
|
Chief
Executive Officer and a Director (Principal Executive Officer) |
| |
|
|
| |
|
/s/
Justin Mathews, Director |
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