NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JULY 31, 2021
(Unaudited)
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION
Nature of Business
Prevention Insurance.Com (the “Company”) was incorporated under the laws of the State of Nevada in 1975 as Vita Plus Industries, Inc. In March 1999, the Company sold its remaining inventory and changed its name to Prevention Insurance.Com.
The Company’ s business is to pursue a business combination through acquisition, or merger with, an existing company. No assurances can be given that the Company will be successful in locating or negotiating with any target company.
Effective June 28, 2019 (“Closing Date”), a change of control occurred with respect to the Company. Pursuant to a Securities Purchase Agreement entered into by and among the Company, Metrowork Equity Sdn. Bhd (“Seller” or “Metrowork”), and Copper Hill Assets Inc., a British Virgin Island corporation (“Buyer” or “Copper Hill”) (the “Purchase Agreement”), Seller assigned, transferred and conveyed to Buyer (i) 1,563,809 shares of common stock of Company (“Common Stock”) and (ii) a promissory note of the Company totaling $355,323 (“Promissory Note”). The total consideration paid by Buyer was $375,000, and Seller assumed all of the liabilities of the Company as of the Closing Date.
On the closing of the above transaction, Mr. Chee Chau Ng, the sole officer of Seller, resigned in all officer capacities from the Company and Anthony Lococo was appointed Chief Executive Officer and Chief Financial Officer of the Company. In addition, Mr. Lococo was appointed a director of the Company.
Basis of Presentation
The summary of significant accounting policies is presented to assist in the understanding of the financial statements. These policies conform to accounting principles generally accepted in the United States of America (“GAAP”) and have been consistently applied.
Consolidated Financial Statements
These consolidated statements include the financial statements of the Company and its subsidiary company, Paramount Capital, Inc. All intercompany balances and transactions have been eliminated in consolidation.
Interim Financial Statements
The accompanying unaudited interim condensed financial statements have been prepared in accordance with GAAP for interim financial information in accordance with Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In our opinion, all adjustments (consisting of normal recurring accruals) considered necessary for fair presentation have been included. While we believe that the disclosures presented herein are adequate and not misleading, these interim condensed financial statements should be read in conjunction with the audited financial statements and the footnotes thereto for the year ended April 30, 2021 included our Form 10-K filed on September 22, 2021. Operating results for the interim period presented are not necessarily indicative of the results for the full year.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Fair Value of Financial Instruments
The fair value of cash, accounts payable and balance due to related parties approximates the carrying amount of these financial instruments due to their short maturity.
Related Party Transactions
A related party is generally defined as (i) any person that holds 10% or more of our membership interests including such person’s immediate families, (ii) our management, (iii) someone that directly or indirectly controls, is controlled by or is under common control with us, or (iv) anyone who can significantly influence our financial and operating decisions. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties. See Notes 4 and 5 below for details of related party transactions in the period presented.
Income Taxes
The provision for income taxes is computed using the asset and liability method, under which deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating losses and tax credit carry-forwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates that apply to taxable income in effect for the years in which those tax assets are expected to be realized or settled. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.
Uncertain Tax Positions
The Company evaluates tax positions in a two-step process. The Company first determine whether it is more likely than not that a tax position will be sustained upon examination, based on the technical merits of the position. If a tax position meets the more-likely-than-not recognition threshold, it is then measured to determine the amount of benefit to recognize in the financial statements. The tax position is measured as the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. The Company classifies gross interest and penalties and unrecognized tax benefits that are not expected to result in payment or receipt of cash within one year as long-term liabilities in the financial statements.
Revenue Recognition:
Revenues are recognized when control of promised goods or services are transferred to a customer, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements:
Step 1: Identify the contract(s) with customers
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to performance obligations
Step 5: Recognize revenue when the entity satisfies a performance obligation
At this time, the Company has not identified specific planned revenue streams.
During the three months ended July 31, 2021 and 2020, the Company did not recognize any revenue.
Stock-Based Compensation
The cost of equity instruments issued to employees and non-employees in return for goods and services is measured by the grant date fair value of the equity instruments issued in accordance with ASC 718, Compensation – Stock Compensation. The related expense is recognized as services are rendered or vesting periods elapse.
Net Loss per Share Calculation
Basic net loss per common share is computed by dividing loss available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted earnings per share is computed by dividing net income by the weighted average shares outstanding, assuming all dilutive potential common shares were issued. Diluted earnings per share is not presented when their effect is anti-dilutive. No potential dilutive securities were issued and outstanding during the three months ended July 31, 2021 or 2020.
COVID-19 Uncertainties
The COVID-19 pandemic could have an impact on our ability to obtain financing to fund the operations. The Company is unable to predict the ultimate impact at this time.
Recently Accounting Pronouncements
There were various accounting standards and interpretations issued recently, none of which are expected to a have a material impact on our financial position, operations or cash flows due to our status as a shell corporation.
NOTE 2. GOING CONCERN
The Company’s financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern, which contemplate the realization of assets and the liquidation of liabilities in the normal course of business. For the three months ended July 31, 2021, the Company reported a net loss of $10,679 negative working capital of $111,929 and an accumulated deficit of $5,101,218 as of July 31, 2021. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of these uncertainties. The Company’s ability to continue as a going concern is dependent upon its ability to develop additional sources of capital, locate and complete a merger with another company and ultimately achieve profitable operations. In the interim, the Company intends to rely upon continued advances form the Company’s majority shareholder to funds its working capital needs. No assurances can be given that the Company will be successful in locating or negotiating with any target company or that the majority shareholder will continue to fund the Company’s working capital needs. As a result, there is substantial doubt about the Company’s ability to continue as a going concern.
NOTE 3. MARKETABLE SECURITY
On August 26, 2019, the Company acquired 33.33% of the issued and outstanding common shares of Australian Gold Commodities Ltd (“ACG”), an Australian company, for $100. At the time, the remaining 66.67% of the issued and outstanding common shares of ACG were beneficially owned by our principal shareholder, Copper Hill. Mr. Anthony Lococo, our sole director, was appointed as a director of ACG. ACG has not commenced operations as of April 30, 2020.
Effective June 30, 2020, ACG completed a fund raising after which the Company’s ownership interest was diluted to less than 1%.
As of July 31, 2021, it was determined that the historic cost of the marketable security equated to its fair market value as ACG has not commenced trading activities as yet.
NOTE 4. ADVANCES DUE TO RELATED PARTIES
As of April 30, 2021, the Company owed a total of $63,752 to related party companies: $30,408 to Apple iSports and $33,344 to Copper Hill.
Mr. Anthony Lococo, our current sole officer and director, is a controlling party of Copper Hill.
Apple ISports, Inc. is a wholly-owned subsidiary of Copper Hill.
During the three months ended July 31, 2021, the Company received a further advance of $31,000 from Copper Hill to fund its working capital requirements.
As of July 31, 2021, the Company owed a total of $94,752 to related party companies: $30,408 to Apple iSports and $64,344 to Copper Hill.
These advances where made to the Company to meet its working capital requirements and are unsecured, interest free and due on demand.
NOTE 5. STOCKHOLDERS’ DEFICIT
Preferred Stock
As of July 31, 2021, the Company was authorized to issue 10,000,000 shares of preferred stock with a par value of $0.0001.
No shares of preferred stock were issued or outstanding during the three months ended July 31, 2021 and 2020.
Common Stock
As of July 31, 2021, the Company was authorized to issue 200,000,000 shares of common stock with a par value of $0.0001.
During the three months ended July 31, 2021, no shares of common stock were issued.
During the three months ended July 31, 2020, we made the following sales of common stock for cash:
On May 5, 2020, Locman Superannuation Fund (“Fund”) paid the Company the sum of $14,975 to acquire 200,737 shares of common stock of the Company pursuant to a subscription agreement between the parties. Anthony Lococo, the Company’s controlling shareholder and sole officer and director, is the control person of the Fund.
On July 27, 2020, the Fund paid the Company the sum of $15,000 to acquire 207,000 shares of common stock of the Company pursuant to a subscription agreement between the parties.
As of July 31, 2021 and April 30, 2021, 7,642,211 shares of common stock were issued and 7,642,210 shares of common stock were outstanding.
Treasury Stock
The Company’s treasury stock comprised one share of common stock acquired at a cost of $52,954.
NOTE 6. SUBSEQUENT EVENTS
The Company evaluated subsequent events after July 31, 2021, in accordance with FASB ASC 855 Subsequent Events, through the date of the issuance of these financial statements and has determined there have been no subsequent events for which disclosure is required.