GoLogiq, Inc. - Annual Report: 2020 (Form 10-K)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

(Mark One)

[X]	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2020

OR

[  ]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission File Number: 333-231286

LOVARRA

(Exact name of registrant as specified in its charter)

Nevada (State or Other Jurisdiction of Incorporation or Organization)	7370 (Primary Standard Industrial Classification Number)	35-2618297 (IRS Employer Identification Number)

Kemp House,

152 - 160 City Road,

London EC1V 2NX

United Kingdom

Telephone No.: +442038078230

E-mail: director@lovarra.com

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Securities registered under Section 12(b) of the Exchange Act:
Title of each class		Trading Symbol		Name of each exchange on which registered
Common Stock		LOVA		OTC Markets

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

None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes [   ]       No [X]

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.  Yes [   ]       No [X]

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant

was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X]       No [   ]

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes [X]       No [   ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting 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	[X]	Smaller reporting company	[X]
(Do not check if a smaller reporting company)		Emerging growth company	[  ]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. [ ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  

Yes [X]       No [ ]

State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date:  5,731,000 common shares issued and outstanding as of March 31, 2021.

1

LOVARRA

ANNUAL REPORT ON FORM 10-K

TABLE OF CONTENTS

 

				Page
PART I
Item 1.		Business		3
Item 1A.		Risk Factors		4
Item 1B.		Unresolved Staff Comments		4
Item 2.		Properties		4
Item 3.		Legal Proceedings		4
Item 4.		Mine Safety Disclosures		4
PART II
Item 5.		Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		5
Item 6.		Selected Financial Data		5
Item 7.		Management’s Discussion and Analysis of Financial Condition and Results of Operations		6
Item 7A.		Quantitative and Qualitative Disclosures About Market Risk		7
Item 8.		Financial Statements and Supplementary Data		7
Item 9.		Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		17
Item 9A.		Controls and Procedures		17
Item 9B.		Other Information		17
PART III
Item 10.		Directors, Executive Officers and Corporate Governance		18
Item 11.		Executive Compensation		19
Item 12.		Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		20
Item 13.		Certain Relationships and Related Transactions, and Director Independence		21
Item 14.		Principal Accounting Fees and Services		21
PART IV
Item 15.		Exhibits, Financial Statement Schedules		21
Item 16.		Form 10-K Summary		22
Signatures				22

 

2

PART I

Item 1. Description of Business

 

We are a development-stage company, incorporated on January 29, 2018 in the state of Nevada, with a fiscal year end of December 31. We are intending to develop, market and sell a subscription-based income/expense tracking application service. The management is also discussing providing a secure physical wallet that only opens once an expenditure/earning is reflected in the application. Our operations have been limited to researching the marketplace for our proposed income/expense application product possibly connected to a physical wallet and the issues entailed in developing these products, as well as the preliminary design and development of our website. We have not yet implemented our business model or undertaken development of our proposed income/expense product nor the possible physical wallet. To date, we have generated no revenues from our operations. There can be no assurances that our efforts to develop our proposed income/expense service will succeed, or that we will be able to market our proposed income/expense service or the potential physical wallet, if developed.

The Application

Our proposed LOVARRA Application (LOVARRA) will be an expense and earnings tracker with all necessary features. The functionality of our future product shall include but will not be limited the following functionality:

GENERAL:

• Tracking both expenses and income.

• Support for multiple accounts and transfers between them.

• All entries, accounts, tags, parties and groups can be edited or deleted at any time.

• Photo and file attachments.

• Passcode protection to hide your financial data from unwanted eyes.

• Recurring entries, both expenses and earnings, with rich frequency options.

• History to view and adjust your previous entries.

• Tags to organize your entries the way you like.

• Ability to specify vendors/payees and clients/payers (parties).

• Groups to separate your regular expenses from business or holiday trips.

• Time of entries is recorded as well.

REPORTS:

• Instant reports for any period of time and kind of expenses.

• Timeline bar graph reports for days, weeks and months, with whatever filter you set.

• Structure of expenses and income, split by tags, parties, accounts or groups, in percentages and absolute amounts, for any report filter.

• Daily, weekly and monthly averages.

• Reports for particular hours.

• Instant account balances.

• Report filter presets - switch between your favorite reports with just a tap.

MULTIPLE CURRENCIES:

• Full support for over 160 world currencies.

• Quick toggle between the currencies you are using most often.

• Currency conversion, with both automatically retrieved and user-defined exchange rates.

• Adjustable exchange rates update mode to reduce traffic fees (automatic, Wi-Fi only, manual).

EXPORT AND IMPORT:

• Ability to analyze your entries in a spreadsheet using CSV export.

• Backup and restore your data and settings over Wi-Fi or Email.

• Default email address to speed-up exporting via Email.

Why physical wallet?

In future, once we start generating revenues, we plan on developing a physical wallet with a lock on it. The lock will open via Bluetooth at a moment a user makes an entry to the application. That way we will exclude a chance for an expense or an income occur and stay unrecorded, thus, significantly increasing the efficiency of the users’ budget planning and monitoring of their monies. The scope of the project is huge, and we expect it to take at least 12 months to be completed. 

3

Monetization of the project:

We plan on providing one-month free trial for users to look-and-feel its usage comfort and enjoy its design. After that, users will be offered to purchase in-app subscriptions for 6/12/24 months. They will be able to pay simply using a credit/debit card that has been previously linked to the App.

Further, when the business is successful and as the physical wallets are developed, they will be available for sale on our website or purchased through the App. 

The wallets will be delivered to their new owners with a promo-code of one-year App subscription.

Monetization from in-app advertisements will also be one of our income sources. We also maintain website at lovarra.com

 

Employees and Employment Agreements

 

We have no employees other than Vadim Rata, our president and director, and Nicolai Moldovanu, our secretary, treasurer and director. Neither Mr. Rata nor Mr. Moldovanu is employed elsewhere so they have the flexibility and willingness to devote all of their time to working on our company and are not paid a salary or compensation. 

 

We presently do not have pension, health, annuity, insurance, stock options, profit sharing, or similar benefit plans; however, we may adopt such plans in the future. There are presently no personal benefits available to our directors for time spent as directors.

Item 1A.  Risk Factors

 

Not applicable to our Company.

 

Item 1B. Unresolved Staff Comments

Not applicable to our Company.

Item 2.  Description of Property

Not applicable to our Company.

Item 3.  Legal Proceedings

We know of no legal proceedings to which we are a party or to which any of our property is the subject which are pending, threatened or contemplated or any unsatisfied judgments against us.

Item 4.  Mine Safety Disclosures

Not applicable to our Company.

 

4

PART II

Item 5. Market for Common Equity and Related Stockholder Matters

Shares of Lovarra common stock are traded on OTC Markets under the ticker LOVA.

 

None of our issued and outstanding common stock is eligible for sale pursuant to Rule 144 under the Securities Act of 1933. Rule 144, as currently in effect, allows a person who has beneficially owned shares of a company's common stock for at least twelve months to sell within any three-month period a number of shares that does not exceed the greater of:

1. One percent of the number of shares of the subject company's common stock then outstanding; or,

2. The average weekly trading volume of the subject company's common stock during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale.

Sales of common stock under Rule 144 are also subject to manner of sale provisions, notice requirements, and the subject company must be current in its public information filings.

Under Rule 144(k), a person who is not one of the subject company's affiliates at any time during the twelve months preceding a sale, and who has beneficially owned the shares proposed to be sold for at least two years, is entitled to sell shares without complying with the manner of sale, public information, volume limitation or notice provisions of Rule 144.

 

We registered 5,000,000 shares of our common stock under the Securities Act of 1933, as amended, for sale.

As of December 31, 2020, there were 31 holders of record of our common stock.

 

We have not declared any dividends on our common stock since the inception of our company. There is no restriction in our articles of incorporation or bylaws that will limit our ability to pay dividends on our common stock. However, we do not anticipate declaring and paying dividends to our shareholders in the near or foreseeable future.

  

The Company has 70,000,000 shares of common stock authorized with a par value of $0.001 per share.

On April 20, 2018, the Company issued 4,500,000 shares of common stock to a director for cash proceeds of $4,500 at $0.001 per share.

During the year ended December 31, 2020, the Company issued 1,231,000 shares of common stock at $0.015 per share for proceeds of $18,465, of which $58 was recorded as share subscription receivable.

There were 5,731,000 shares of common stock issued and outstanding as of December 31, 2020.

Item 6. Selected Financial Data

 

Not applicable to our companies.

 

5

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with our audited financial statements and the related notes that appear elsewhere in this registration statement and prospectus.

The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in these forward-looking statements.

Our audited financial statements are stated in U.S. dollars and are prepared in accordance with U.S. generally accepted accounting principles (US GAAP).

Company Overview

 

We are a development-stage company that intends to provide subscription-based, highly secure expense and earnings tracking application service for personal and corporate use. We have recently commenced business operations and have not generated any revenues to date.

RESULTS OF OPERATION

For the year ended December 31, 2020, the Company has a net loss of $26,022. Our financial statements have been prepared assuming that we will continue as a going concern.  We expect we will require additional capital to meet our long-term operating requirements. We expect to raise additional capital through, among other things, the sale of equity or debt securities.

Years Ended December 31, 2020 and 2019 

Revenue

During the year ended December 31, 2020 and 2019, the Company has not earned any revenue.

Operating Expenses

During the year ended December 31, 2020, we incurred total expenses and professional fees of $26,022 compared to $11,113 during the year ended December 31, 2019. General and administrative and professional fee expenses incurred generally related to corporate overhead, financial and administrative contracted services, such as legal and accounting and increase was due to legal and accounting expenses relating to our 10-Q and 10-K filing statements with the SEC.  During the year, we also incurred $11,000 of DTC costs.  

Net Loss

Our net loss for the year ended December 31, 2020 was $26,022 compared to net loss of $11,113 during the year ended December 31, 2019.

LIQUIDITY AND CAPITAL RESOURCES

As of December 31, 2020, our total assets were $5,382 compared to $137 in total assets as of December 31, 2019.  The increase in assets is connected with the cash proceeds that came from the issuance of common stock to our shareholders.

As of December 31, 2020 and, 2019, our liabilities were $20,225 and $7,365, respectively. The increase is due to additional funds contributed by our President and Director for operations.

Stockholders’ deficit was $14,843 as of December 31, 2020, compared to stockholders’ deficit of $7,228 as of December 31, 2019. The difference was due to operations during the year ended December 31, 2020 which was supported by cash funding from our President and Director as opposed to the issuance of common shares and cash proceeds from our shareholders.

Cash Flows from Operating Activities

For the year ended December 31, 2020, net cash flows used in operating activities were $13,770 compared to $6 during the year ended December 31, 2019.

 

 

6

Cash Flows from Financing Activities

Cash provided by financing activities during the year ended December 31, 2020 was $18,407 compared to $50 as of December 31, 2019. Financing for the current year was provided by the issuance of 1,231,000 shares of common stock to our shareholders.

 

Plan of Operation and Funding

We expect that working capital requirements will continue to be funded through a combination of our existing funds and further issuances of securities. Our working capital requirements are expected to increase in line with the growth of our business.

Existing working capital, further advances and debt instruments, and anticipated cash flow are expected to be adequate to fund our operations over the next twelve months. We have no lines of credit or other bank financing arrangements. Generally, we have financed operations to date through the proceeds of the private placement of equity and debt instruments. In connection with our business plan, management anticipates additional increases in operating expenses and capital expenditures relating to: (i) acquisition of inventory; (ii) developmental expenses associated with a start-up business; and (iii) marketing expenses. We intend to finance these expenses with further issuances of securities, and debt issuances. Thereafter, we expect we will need to raise additional capital and generate revenues to meet long-term operating requirements. Additional issuances of equity or convertible debt securities will result in dilution to our current shareholders. Further, such securities might have rights, preferences or privileges senior to our common stock. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, we may not be able to take advantage of prospective new business endeavors or opportunities, which could significantly and materially restrict our business operations.

Off-Balance Sheet Arrangements

As of the date of this Annual Report, we do not have 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 that are material to investors.

Item 7A. Quantitative and Qualitative Disclosures About Market Risks

Not applicable to our company.

Item 8. Financial Statements and Supplementary Data

LOVARRA

Financial Statements

For the Years Ended December 31, 2020 and 2019

(expressed in U.S. dollars)

 

Index

 

Report of Independent Registered Public Accounting Firm

8

Condensed Balance Sheets

9

Condensed Statements of Operations and Comprehensive Loss

10

Condensed Statements of Stockholders’ Equity (Deficit)

11

Condensed Statements of Cash Flows

12

Notes to the Financial Statements

13

 

 

 

 

7

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of Lovarra

 

Opinion on the Financial Statements

We have audited the accompanying balance sheets of Lovarra (the “Company”) as of December 31, 2020 and 2019, and the related statements of operations and comprehensive loss, stockholders’ equity (deficit), and cash flows for the years then ended and related notes (collectively, the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2020 and 2019, and the results of their operations and cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

 

Explanatory Paragraph Regarding Going Concern

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has no revenues, and has incurred operating losses and negative cash flows from operations since inception. As at December 31, 2020, the Company has a working capital deficit of $14,843 and an accumulated deficit of $37,750. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also discussed in Note 1 to the financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the 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 fraud or error. The Company is not required to have, nor were we engaged to perform, an audit of its internal controls over financial reporting. As part of our audits, we are required to obtain an understanding of the Company’s internal controls over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal controls over financial reporting. Accordingly, we express no such opinion.

 

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to fraud or error, 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.

/s/ SATURNA GROUP CHARTERED PROFESSIONAL ACCOUNTANTS LLP

Saturna Group Chartered Professional Accountants LLP

We have served as the Company’s auditor since 2018

Vancouver, Canada

March 31, 2021

 

 

 

 

                                                                             8

 

 

LOVARRA Balance Sheets (Expressed in U.S. dollars)
	December 31, 2020 $	December 31, 2019 $
ASSETS
Current Assets
Cash	4,677	40
Prepaid expenses and deposits	705	97
TOTAL ASSETS	5,382	137
LIABILITIES AND STOCKHOLDER’S DEFICIT
Current Liabilities
Accounts payable and accrued liabilities	–	1,500
Due to a related party (Note 4)	20,225	5,865
Total Liabilities	20,225	7,365
Nature of Business and Continuance of Operations (Note 1)
Stockholder’s Deficit
Common stock Authorized: 70,000,000 shares of common stock, $0.001 par value 5,731,000 and 4,500,000 shares issued and outstanding	5,731	4,500
Additional paid-in capital	17,234	–
Share subscriptions receivable	(58)	–
Deficit	(37,750)	(11,728)
Total Stockholder’s Deficit	(14,843)	(7,228)
TOTAL LIABILITIES AND STOCKHOLDER’S DEFICIT	5,382	137

 

(The accompanying notes are an integral part of these financial statements)

 

9

 

 

 

 

LOVARRA Statements of Operations and Comprehensive Loss (Expressed in U.S. dollars)
	Year ended December 31, 2020 $	Year ended December 31, 2019 $
EXPENSES
General and administrative	1,480	550
Professional fees	24,445	10,474
Rent	97	89
Total Expenses	26,022	11,113
Net Loss and Comprehensive Loss	(26,022)	(11,113)
Basic and Diluted Net Loss per Common Share	(0.01)	–
Weighted Average Number of Common Shares Outstanding	4,832,975	4,500,000

 

(The accompanying notes are an integral part of these financial statements)

10

 

 

 

                                         (The accompanying notes are an integral part of these financial statements)

                                                                                               

       

                                                                                                    11

 

 

 

LOVARRA Statements of Cash Flows (Expressed in U.S. dollars)
		Year ended December 31, 2020 $		Year ended December 31, 2019 $
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss for the Period		(26,022)		(11,113)
Changes in Operating Assets and Liabilities:
Prepaid expense and deposits		(608)		3,817
Accounts payable and accrued liabilities		(1,500)		1,500
Due to related party		14,360		5,790
Net Cash Used in Operating Activities		(13,770)		(6)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock		18,407		–
Proceeds from a related party		–		50
Net Cash Provided by Financing Activities		18,407		50
Change in Cash		4,637		44
Cash, Beginning of Year		40		(4)
Cash, End of Year		4,677		40
SUPPLEMENTAL CASH FLOW INFORMATION
	Interest paid		–		–
	Income taxes paid		–		–

 

(The accompanying notes are an integral part of these financial statements)

12

LOVARRA

Notes to the Financial Statements

For the Years Ended December 31, 2020 and 2019

(Expressed in U.S. dollars)

Note 1 – Nature of Business and Continuance of Operations

Lovarra (the “Company”) was incorporated on January 29, 2018 under the laws of the State of Nevada. The Company is focused on software application development, including an expense and income tracker and a physical wallet with a lock that can be opened via Bluetooth linked by a user application.

Going Concern

These financial statements have been prepared on the going concern basis, which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to obtain necessary equity financing to support operations, and the attainment of profitable operations.  During the year ended December 31, 2020, the Company had no revenues, and had negative cash flows from operating activities.  As at December 31, 2020, the Company had a working capital deficit of $14,843 and an accumulated deficit of $37,750. These factors raise substantial doubt upon the Company’s ability to continue as a going concern. These financial statements do not reflect any adjustments that may be necessary if the Company is unable to continue as a going concern.

On March 11, 2020, the World Health Organization declared COVID-19 a global pandemic. This contagious disease outbreak and any related adverse public health developments, has adversely affected workforces, economies, and financial markets globally, leading to an economic downturn. The impact on the Company has not been significant, but management continues to monitor the situation.

Note 2 - Significant Accounting Policies

Basis of Presentation

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States and are expressed in U.S. dollars. The Company’s fiscal year-end is December 31.

Use of Estimates and Judgments

The preparation of financial statements in conformity with U.S. 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. The Company regularly evaluates estimates and assumptions related to deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

The Company applies judgment in the application of the going concern assumption which requires management to take into account all available information about the future, which is at least, but not limited to, 12 months from the end of the reporting period and in the factors regarding the impairment of the property and equipment.  

Cash and Cash Equivalents

The Company considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents                                         

 

                                                                             13

LOVARRA

Notes to the Financial Statements

For the Years Ended December 31, 2020 and 2019

(Expressed in U.S. dollars)

Note 2 - Significant Accounting Policies (continued)

Loss Per Share

The Company computes income (loss) per share in accordance with ASC 260 “Earnings per Share”. Basic loss per share is computed by dividing net income (loss) available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted income (loss) per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive.

Income Taxes

The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, “Income Taxes”. The asset and liability method provides that deferred income 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 loss and tax credit carryforwards. Deferred income tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred income tax assets to the amount that is believed more likely than not to be realized.

As at December 31, 2020 and 2019, the Company did not have any amounts recorded pertaining to uncertain tax positions.

Fair Value Measurements

The Company measures and discloses the estimated fair value of financial assets and liabilities using the fair value hierarchy prescribed by U.S. generally accepted accounting principles. The fair value hierarchy has three levels, which are based on reliable available inputs of observable data. The hierarchy requires the use of observable market data when available. The three-level hierarchy is defined as follows:

Level 1 – quoted prices for identical instruments in active markets.

Level 2 – quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model derived valuations in which significant inputs and significant value drivers are observable in active markets; and.

Level 3 – fair value measurements derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

Financial instruments consist of cash, accounts payable and accrued liabilities, and amounts due to a related party. The recorded values of all financial instruments approximate their current fair values because of their nature and respective relatively short maturity dates or durations.

Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

 

14

LOVARRA

Notes to the Financial Statements

For the Years Ended December 31, 2020 and 2019

(Expressed in U.S. dollars)

Note 2 - Significant Accounting Policies (continued)

Foreign Currency Translation

The Company’s functional and reporting currency is the U.S. dollar. Transactions may occur in foreign currencies and management has adopted ASC 830, “Foreign Currency Translation Matters”. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Non-monetary assets and liabilities denominated in foreign currencies are translated at rates of exchange in effect at the date of the transaction. Average monthly rates are used to translate revenues and expenses. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the statement of operations.

Comprehensive Loss

ASC 220, “Comprehensive Income” establishes standards for the reporting and display of comprehensive income and its components in the financial statements. As at December 31, 2020 and 2019, the Company had no items that affected comprehensive loss.

Recent Accounting Pronouncements

In February 2016, Topic 842, Leases was issued to replace the leases requirements in Topic 840, Leases. The main difference between previous GAAP and Topic 842 is the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous GAAP. A lessee should recognize in the balance sheet a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. If a lessee makes this election, it should recognize lease expense for such leases generally on a straight-line basis over the lease term. The accounting applied by a lessor is largely unchanged from that applied under previous GAAP. The Company adopted Topic 842 on January 1, 2019 and there was no material impact on the Company’s financial statements.  

The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and 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 – Common Stock

During the year ended December 31, 2020, the Company issued 1,231,000 shares of common stock at $0.015 per share for proceeds of $18,465, of which $58 was recorded as share subscription receivable.

Note 4 – Related Party Transactions

As at December 31, 2020, the Company owed $20,225 (2019 - $5,865) to the Chief Executive Officer and Director of the Company.  The amount owing is unsecured, non-interest bearing, and due on demand.

 

15

 

LOVARRA

Notes to the Financial Statements

For the Years Ended December 31, 2020 and 2019

(Expressed in U.S. dollars)

Note 5 – Income Taxes

The Company is subject to United States federal and state income taxes at an approximate rate of 21%. The reconciliation of the provision for income taxes at the United States federal statutory rate compared to the Company’s income tax expense as reported is as follows:

	2020 $	2019 $
Income tax recovery at statutory rate	5,465	2,334
Change in valuation allowance	(5,465)	(2,334)
Income tax provision	–	–

The significant components of deferred income tax assets and liabilities are as follows:

	2020 $	2019 $
Net operating losses carried forward	7,928	2,463
Valuation allowance	(7,928)	(2,463)
Net deferred income tax asset	–	–

The Company has net operating losses carried forward of $37,750 which may be carried forward to apply against future years’ taxable income, subject to the final determination by taxation authorities, and commence expiration in the year 2038.    

 

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

None

Item 9A(T) Controls and Procedures

Disclosure Controls and Procedures.

The Company maintains disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended) that are designed to ensure that information required to be disclosed in the Company’s Securities Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and that such information is accumulated and communicated to the Company’s management, as appropriate, to allow timely decisions regarding required disclosure.

The Company’s management, with the participation of our principal executive and principal financial officer evaluated the effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered by this report. Based upon that evaluation, our principal executive and principal financial officer concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures were not effective.

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

An evaluation was conducted under the supervision and with the participation of our management of the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2020. Based on that evaluation, our management concluded that our disclosure controls and procedures were not effective as of such date to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms.

Changes in Internal Controls over Financial Reporting

Management has determined that, as of December 31, 2020, there were no changes in our internal control over financial reporting that occurred during our most recent fiscal quarter then ended that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Our independent registered public accounting firm is not required to, and has not, perform formal testing of our internal controls or policies and has not issued an independent opinion as to the quality of our internal controls.  

Item 9B. Other Information.

None.

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PART III

Item 10. Directors, Executive Officers, Promoters and Control Persons of the Company

Officers and Directors

At each annual meeting of stockholders, qualified directors will be elected to hold office until the next annual meeting of stockholders. Each director will hold office until the expiration of the term for which elected and until a qualified successor has been elected. The officers of our company are appointed by our board of directors and may hold office for such term as prescribed by our board of directors or until such person's death or removal from office.

 

The name, address, age, and position of our present officer(s) and director(s) is set forth below:

NAME AND ADDRESS		AGE		POSITION(S)
Vadim Rata Str. Petru Rares bl. V1 sc. D, et. 4, ap. 17, Tirgu Frumos, 705300 Romania		27		President and Director
Nicolai Moldovanu Str. Nicolae Iorga 61, Vaslui 730036 Romania		62		Secretary, Treasurer and Director

On April 2, 2018, Vadim Rata was appointed as our Director, Secretary and Treasurer. On September 10, 2020, Vadim Rata resigned as a Secretary and Treasurer of the Company and appointed Nicolai Moldovanu as Secretary, Treasurer and Director of the Company.

 

Background of Officer(s) and Director(s)

 

Mr. Rata, aged 27, is a national and citizen of Romania. He graduated from Bucharest Academy of Economic Studies in June 2014. In August 2014, Mr. Rata started his employment at DiraIT, a Bucharest IT firm, where he held a position of junior IT manager. The processes Mr. Rata oversaw included communicating with clients of the company, drafting agreements of engagement and services provision. In May 2016, Mr. Vadim Rata terminated his employment with DiraIT. Later in June 2016, he was hired by Kwiftol and got a position of a business analyst. The responsibilities there included predicting the IT market tendencies for the next quarter and adjusting the company’s business directions accordingly. Mr. Rata quit from Kwiftol in March 2018. Since April 20, 2018, Mr. Rata has served full-time as a President, Treasurer, Secretary and Director of Lovarra and has not been engaged in other kinds of business activities.

Nicolai Moldovanu has worked in the area of developing mobile applications for more than 10 years on a freelance basis. His experience includes overseeing projects of various complexity and engaging in the process of development on all the stages. Also, Nicolai Moldovanu has an economical degree which provides him with deep understanding on financial management. The Company is intending to use his proficiency on the matter for enhancing its product.

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Involvement in Certain Legal Proceedings

Neither Mr. Rata, our president and director, nor Mr. Moldovanu, our secretary, treasurer and director, has been involved in any of the following events during the past 5 years:

	1.	Any bankruptcy petition filed by or against any business of which he was a general partner or executive officer either at the time of the bankruptcy or within 2 years prior to that time;
	2.	Any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);
	3.	Being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; or,
	4.	Being found by a (i) court of competent jurisdiction (in a civil action), (ii) the Securities and Exchange Commission, or (iii) the Commodity Futures Trading Commission, to have violated a federal or state securities or commodities law, where the judgment has not been reversed, suspended, or vacated.

Item 11. Executive Compensation

Summary of Compensation

Since the incorporation we have made no provisions for paying cash and/or non-cash compensation to our officers and directors.

The following table sets forth the compensation paid by us for the years ended December 31, 2020 and 2019. The compensation addresses all compensation awarded to, earned by, or paid to our named executive officer(s) up to the effective date of this prospectus. This information includes the dollar value of base salaries, bonus awards and number of stock options granted, and certain other compensation, if any.

SUMMARY COMPENSATION TABLE FOR THE FISCAL YEAR ENDING DECEMBER 31, 2020 and 2019

Name and Principal Position

Salary ($)

Bonus ($)

Stock Awards ($)

Option Awards ($)

Non-Equity Incentive Plan Compensation ($)

Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)

All Other Compensation ($)

Total ($)

Vadim Rata President, Director

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nicolai Moldovanu, Secretary, Treasurer, Director

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

 

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We have not paid any other salaries. There are no other stock option plans, retirement, pension, or profit-sharing plans for the benefit of our officers and directors other than as described herein.

 

Long-Term Incentive Plan Awards

 

There are no long-term incentive plans that provide compensation intended to serve as an incentive for performance.

 

Employment Agreements

 

At this moment, we have no employees other than our president and director, Vadim Rata, and our secretary, treasurer and director, Nicolai Moldovanu. We do not have any formal employment agreements with them or with any other individual. If there is sufficient cash flow available from our future operations, we may in the future enter into a written employment agreement with our officers and directors or enter into employment agreements with future key staff members.

 

Director Compensation

 

We do not compensate Mr. Rata or Mr. Moldovanu for their services. 

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

 

The following table sets forth, as of the date of this prospectus, the total number of shares owned beneficially by Vadim Rata, our president and director, and the present owners (if any) of 5% or more of our total outstanding shares. 

Title of Class	Name and Address of Beneficial Owner (1)	Amount  of Shares Owned	Percentage of Shares Owned	Total Price
Common Stock	Vadim Rata	4,500,000	78.5%	$4,500
Common Stock	All Officers and Directors as a Group (1 person)	4,500,000	78.5%	$4,500

 

(1)	The person named above may be deemed to be a "parent" and "promoter" of our company, within the meaning of such terms under the Securities Act of 1933, as amended, by virtue of his share ownership. Mr. Rata is the only "promoter" of our company.

 

CHANGES IN CONTROL

We are unaware of any contract, or other arrangement or provision in our articles of incorporation or bylaws, which would result in a change of control of our company.

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Item 13. Certain Relationships and Related Transactions, and Director Independence

Except as described below, none of the following parties have, since our date of incorporation, had any material interest, direct or indirect, in any transaction with us or in any presently proposed transaction that have or will materially affect us, other than as noted in this section:

 

	1.	Any of our directors or officers;
	2.	Any person proposed as a nominee for election as a director;
	3.	Any person who beneficially owns, directly or indirectly, shares carrying more than 5% of the voting rights attached to our outstanding shares of common stock;
	4.	Any of our promoters; and,
	5.	Any member of the immediate family (including spouse, parents, children, step-parents, step-children, siblings and in-laws) of any of the foregoing persons.

 

On April 20, 2018, we issued a total of 4,500,000 shares of common stock to Vadim Rata, our officer and director, for total cash consideration of $4,500. This was accounted for as a purchase of common stock.

Mr. Rata made a formal additional financial commitment to loan up to $40,000, if required, for the further development of the business.

Our directors are not independent because they are executive officers of our company. The determination of the independence of a director has been made using the definition of "independent director" contained under NASDAQ Marketplace Rule 4200(a)(15).

Item 14. Principal Accounting Fees and Services

During the year ended December 31, 2020, the total audit fees billed was $9,000, for audit-related services was $0, for tax services was $0 and for all other services was $0.

During the year ended December 31, 2019, the total audit fees billed was $8,500, for audit-related services was $0, for tax services was $0 and for all other services was $0.

 

Audit fees are charged by the auditor for providing its audit report. Fees for audit-related services might be charged by lawyers or valuers providing third party expertise or opinions required to prepare or provide the audit report

PART IV

Item 15. Exhibits, Financial Statement Schedules

Exhibits:

31.1		Certification of Chief Executive Officer and Chief Financial Officer pursuant to Securities Exchange Act of 1934 Rule 13a-14(a) or 15d-14(a).
32.1		Certifications pursuant to Securities Exchange Act of 1934 Rule 13a-14(b) or 15d-14(b) and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002.

                                                                             

 

 

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Item 16. Form 10-K Summary

None.

 

 

 

 

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

	LOVARRA
Date: March 31, 2021	By: /s/ Vadim Rata
	Vadim Rata President, director

 

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