GoLogiq, Inc. - Quarter Report: 2021 June (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended June 30, 2021

[ ] 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)

Kemp House,152 - 160 City Road,

London EC1V 2NX

UK 

Telephone No.: (44) 2038078230

E-mail: director@lovarra.com

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

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 on its corporate Web site, if any, 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 [ ]       No [X]

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:

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 August 12, 2021.

LOVARRA

QUARTERLY REPORT ON FORM 10-Q

Table of Contents

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PART I – FINANCIAL INFORMATION

Item 1.  Financial Statements

The accompanying interim condensed financial statements of Lovarra (“the Company”, “we”, “us” or “our”), have been prepared without audit pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with United States generally accepted principles have been condensed or omitted pursuant to such rules and regulations.

The interim condensed financial statements are condensed and should be read in conjunction with the Company’s latest annual financial statements.

In the opinion of management, the interim condensed financial statements contain all material adjustments, consisting only of normal adjustments considered necessary to present fairly the financial condition, results of operations, and cash flows of the Company for the interim periods presented.

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Lovarra

Condensed Financial Statements

June 30, 2021

(Expressed in U.S. dollars)

(unaudited)

Index

Condensed Balance Sheets 5

Condensed Statements of Operations and Comprehensive Loss 6

Condensed Statements of Stockholders’ Equity (Deficit) 7

Condensed Statements of Cash Flows 8

Notes to the Condensed Financial Statements 9

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LOVARRA

Condensed Balance Sheets

(Expressed in U.S. dollars)

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

5

LOVARRA
Condensed Statements of Operations and Comprehensive Loss
(Expressed in U.S. dollars)

(unaudited)

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

6

LOVARRA

Condensed Statements of Stockholder’s Equity (Deficit)

(Expressed in U.S. dollars)

(unaudited)

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

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 LOVARRA
Condensed Statements of Cash Flows
(Expressed in U.S. dollars)

(unaudited)

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

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LOVARRA

Notes to the Condensed Financial Statements

Six Months Ended June 30, 2021

(Expressed in U.S. dollars)

(unaudited)

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 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 condensed 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. As at June 30, 2021, the Company has not generated any revenues, has a working capital deficit of $21,858, and has an accumulated deficit of $44,765. These factors raise substantial doubt upon the Company’s ability to continue as a going concern. These condensed financial statements do not reflect any adjustments that may be necessary if the Company is unable to continue as a going concern.

The outbreak of the novel coronavirus – COVID-19, which was declared a pandemic by the World Health Organization on March 11, 2020, has led to adverse impacts on the American and global economies, disruptions of financial markets, and created uncertainty regarding potential impacts to the Company’s supply chain and operations. The COVID-19 pandemic has impacted and could further impact the Company’s operations and the operations of the Company’s suppliers and vendors as a result of quarantines, facility closures, and travel and logistics restrictions. The extent to which the COVID-19 pandemic impacts the Company’s business, results of operations and financial condition will depend on future developments, which are highly uncertain and cannot be predicted, including, but not limited to the duration, spread, severity and impact of the COVID-19 pandemic, the effects of the COVID-19 pandemic on the Company’s suppliers and vendors and the remedial actions and stimulus measures adopted by local and federal governments, and to what extent normal economic and operating conditions can resume. The management team is closely following the progression of COVID-19 and its potential impact on the Company. Even after the COVID-19 pandemic has subsided, the Company may experience adverse impacts to its business as a result of any economic regression or depression that has occurred or may occur in the future. The impact on the Company has not been significant, but management continues to monitor the situation.

Note 2 - Summary of Significant Accounting Policies

Basis of Presentation

The accompanying condensed 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.

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LOVARRA

Notes to the Condensed Financial Statements

Six Months Ended June 30, 2021

(Expressed in U.S. dollars)

(unaudited)

Interim Financial Statements

These interim condensed financial statements have been prepared on the same basis as the annual financial statements and in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company’s financial position, results of operations and cash flows for the periods shown. The results of operations for such periods are not necessarily indicative of the results expected for a full year or for any future period.

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 related parties, which 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.

Recently Adopted Accounting Pronouncements

The Company has implemented all new accounting pronouncements that are in effect and that may impact its condensed 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 – Related Party Transactions

As at June 30, 2021, the Company owed $20,225 (December 31, 2020 - $20,225) to the Chief Executive Officer and Director of the Company. The amount owing is unsecured, non-interest bearing, and due on demand.

As at June 30, 2021, the Company owed $650 (December 31, 2020 - $nil) to a Director of the Company. The amount owing is unsecured, non-interest bearing, and due on demand.

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operation

FORWARD LOOKING STATEMENTS

Statements made in this Form 10-Q that are not historical or current facts are "forward-looking statements" made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933 (the "Act") and Section 21E of the Securities Exchange Act of 1934. These statements often can be identified by the use of terms such as "may," "will," "expect," "believe," "anticipate," "estimate," "approximate" or "continue," or the negative thereof. We intend that such forward-looking statements be subject to the safe harbors for such statements. We wish to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Any forward-looking statements represent management's best judgment as to what may occur in the future. However, forward-looking statements are subject to risks, uncertainties and important factors beyond our control that could cause actual results and events to differ materially from historical results of operations and events and those presently anticipated or projected. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statement or to reflect the occurrence of anticipated or unanticipated events.

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. Our registered address is Kemp House, 152 - 160 City Road, London EC1V 2NX, United Kingdom. Our telephone number is +442038078230. We are a development-stage company that intends to develop, market and sell a subscription-based income/expense tracking application service. The management is also discussing developing a secure physical wallet that only opens once an expenditure/earning is reflected in the application. Our current operations are devoted to researching the market of mobile applications to determine a niche for our proposed income/expense application product. Moving forward it will possibly be connected to a physical wallet which will open only after the expense is input in the app. 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.

RESULTS OF OPERATION

For the six months ended June 30, 2021, the Company has a net loss of $7,015. 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.

Three Month Period Ended June 30, 2021 and 2020

Revenue

During the three months ended June 30, 2021 and 2020, the Company has not earned any revenue.

Operating Expenses

During the three-month period ended June 30, 2021, we incurred total expenses and professional fees of $1,795 compared to $1,870 during the three months ended June 30, 2020. General and administrative and professional fee expenses incurred generally related to corporate overhead, financial and administrative contracted services, such as legal and accounting, developmental costs, and marketing expenses. 

Net Loss

Our net loss for the three-month period ended June 30, 2021 was $1,795 compared to net loss of $1,870 during the three months ended June 30, 2020. Our loss per share for the three months ended June 30, 2021 and 2020 was $nil.

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Six Month Period Ended June 30, 2021 and 2020

Revenue

During the six months ended June 30, 2021 and 2020, the Company has not earned any revenue.

Operating Expenses

During the six-month period ended June 30, 2021, we incurred total expenses and professional fees of $7,015 compared to $7,487 during the six months ended June 30, 2020. General and administrative and professional fee expenses incurred generally related to corporate overhead, financial and administrative contracted services, such as legal and accounting, developmental costs, and marketing expenses. 

Net Loss

Our net loss for the six-month period ended June 30, 2021 was $7,015 compared to net loss of $7,487 during the six months ended June 30, 2020. Our loss per shar for the six months ended June 30, 2021 and 2020 was $nil.

LIQUIDITY AND CAPITAL RESOURCES

As of June 30, 2021, our cash balance was $nil compared to $4,677 at December 31, 2020. We had total assets of $635 at June 30, 2021 compared to total assets of $5,382 as at December 31, 2020. As of June 30, 2021, and as of December 31, 2020, our liabilities were $22,493 and $20,225, respectively. The decrease in cash and total assets at June 30, 2021 was due to the use of our cash for operating expenses, as we have not raised additional equity financing to support our operations. The increase in our liabilities was due to additional payments of operating expenses paid by officers and directors of the Company.

Cash Flows from Operating Activities

For the six-month period ended June 30, 2021, net cash flows used in operating activities was $4,677 compared to $6,740 during the six months ended June 30, 2020. The decrease in the use of cash for operating activities was due to the lack of available cash flow, as the Company has no cash flow from operations and continues to rely on officers and directors of the Company to support its ongoing operations.

Cash Flows from Financing Activities

Cash provided by financing activities during the six-month period ended June 30, 2021 was $0 compared to $8,070 during the six months ended June 30, 2020. The decrease was due to the fact that we did not raise any cash financing during the year compared to the receipt of $8,070 from the issuance of common shares during the period ended June 30, 2020.

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.

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Off-Balance Sheet Arrangements

As of the date of this Quarterly 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.

Going Concern

The independent auditors' report accompanying our December 31, 2020 financial statements contained an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern. The financial statements have been prepared "assuming that we will continue as a going concern," which contemplates that we will realize our assets and satisfy our liabilities and commitments in the ordinary course of business. There has been no change in our going concern assumption as at June 30, 2021.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

As a "smaller reporting company" as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

Our disclosure controls and procedures are designed to ensure that information required to be disclosed in reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission. Our principal executive officer and principal financial and accounting officer have reviewed the effectiveness of our “disclosure controls and procedures” (as defined in the Securities Exchange Act of 1934 Rules 13(a)-15(e) and 15(d)-15(e)) within the end of the period covered by this Quarterly Report on Form 10-Q and have concluded that the disclosure controls and procedures are not effective to ensure that material information relating to the Company is recorded, processed, summarized, and reported in a timely manner. The Company has a sole officer and director of the Company and does not address segregation of duties and does not have proper oversight of management through an independent Audit Committee or Board of Directors.

Changes in Internal Controls over Financial Reporting

There have been no changes in the Company's internal control over financial reporting during the last quarterly period covered by this report that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting. Our independent auditors have not, and is not required to, provide assurance over our internal controls over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Management is not aware of any legal proceedings contemplated by any governmental authority or any other party involving us or our properties. As of the date of this Quarterly Report, no director, officer or affiliate is (i) a party adverse to us in any legal proceeding, or (ii) has an adverse interest to us in any legal proceedings. Management is not aware of any other legal proceedings pending or that have been threatened against us or our properties.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

No equity securities were sold during the six-month period ended June 30, 2021.

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Item 3. Defaults upon Senior Securities

No senior securities were issued and outstanding during the six-month period ended June 30, 2021.

Item 4. Mine Safety Disclosures

Not applicable to our Company.

Item 5. Other Information

None.

Item 6. Exhibits

Exhibits:

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.

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