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 March 31, 2018
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from __________ to __________
Commission File No.: 000-55642
LOVE INTERNATIONAL GROUP, INC. |
(Exact name of registrant as specified in its charter) |
Nevada | | 80-0929366 |
(State or other jurisdiction of incorporation or organization) | | (I.R.S. Employer Identification No.) |
26 Floor, One Harbour Square, 181 Hoi Bun Road,
Kwun Tong, Kowloon, Hong Kong
(Address of principal executive offices) (Zip Code)
+852 2697 7733
(Registrant's telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
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 and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). Yes x No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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 | x |
(Do not check if a smaller reporting company) | Emerging company | x |
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 13(a) of the Exchange 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 ¨
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13, or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☐ No ☐
APPLICABLE ONLY TO CORPORATE ISSUERS
As of May 11, 2018, there were 289,333,360 shares of the issuer's common stock, par value $0.0001, issued and outstanding.
FORM 10-Q
FOR THE PERIOD ENDED MARCH 31, 2018
TABLE OF CONTENTS
PART I.
FINANCIAL INFORMATION
Item 1. Financial Statements for the Period Ended March 31, 2018.
LOVE INTERNATIONAL GROUP, INC.
Condensed Balance Sheets
| | March 31, | | | December 31, | |
| | 2018 | | | 2017 | |
| | (Unaudited) | | | | |
ASSETS | | | | | | |
CURRENT ASSETS | | | | | | |
| | | | | | |
Cash and cash equivalents | | $ | - | | | $ | - | |
Deposits and prepaid expenses | | | 19,000 | | | | 20,000 | |
TOTAL ASSETS | | $ | 19,000 | | | $ | 20,000 | |
| | | | | | | | |
LIABILITIES AND STOCKHOLDERS' DEFICIT | | | | | | | | |
| | | | | | | | |
CURRENT LIABILITIES | | | | | | | | |
| | | | | | | | |
Accounts payable and accrued liabilities | | $ | 4,385 | | | $ | 7,661 | |
Due to related party | | | 147,177 | | | | 137,161 | |
Total current liabilities | | | 151,562 | | | | 144,822 | |
| | | | | | | | |
STOCKHOLDERS' DEFICIT | | | | | | | | |
| | | | | | | | |
Common stock, $0.0001 par value, 1,000,000,000 shares authorized, 289,333,360 shares issued and outstanding | | | 28,933 | | | | 28,933 | |
Additional paid-in capital | | | 33,383 | | | | 33,383 | |
Accumulated deficit | | | (194,878 | ) | | | (187,138 | ) |
TOTAL STOCKHOLDERS' DEFICIT | | | (132,562 | ) | | | (124,822 | ) |
| | | | | | | | |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | | $ | 19,000 | | | $ | 20,000 | |
The accompanying notes are an integral part of these condensed financial statements.
LOVE INTERNATIONAL GROUP, INC.
Condensed Statements of Operations and Comprehensive Loss
(Unaudited)
| | Three months ended March 31, | |
| | 2018 | | | 2017 | |
| | | | | | |
REVENUES | | $ | - | | | $ | - | |
| | | | | | | | |
EXPENSES | | | | | | | | |
General and administrative | | | 102 | | | | 34 | |
Professional fees | | | 7,638 | | | | 9,843 | |
Total Expenses | | | 7,740 | | | | 9,877 | |
Loss before income taxes | | | (7,740 | ) | | | (9,877 | ) |
Income tax | | | - | | | | - | |
NET LOSS | | $ | (7,740 | ) | | $ | (9,877 | ) |
| | | | | | | | |
BASIC AND DILUTED LOSS PER SHARE | | $ | (0.00 | ) | | $ | (0.00 | ) |
| | | | | | | | |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING BASIC AND DILUTED* | | | 289,333,360 | | | | 289,333,360 | |
The accompanying notes are an integral part of these condensed financial statements.
LOVE INTERNATIONAL GROUP, INC.
Condensed Statements of Changes in Stockholders' Deficit
(Unaudited)
| | | | | | | | Additional | | | | | | Total | |
| | Common stock | | | Paid-in | | | Accumulated | | | Stockholders' | |
| | Shares | | | Amount | | | Capital | | | Deficit | | | Deficit | |
Balance, January 1, 2018 | | | 289,333,360 | | | $ | 28,933 | | | $ | 33,383 | | | $ | (187,138 | ) | | $ | (124,822 | ) |
Net loss | | | - | | | | - | | | | - | | | | (7,740 | ) | | | (7,740 | ) |
Balance, March 31, 2018 | | | 289,333,360 | | | $ | 28,933 | | | $ | 33,383 | | | $ | (194,878 | ) | | $ | (132,562 | ) |
| | | | | | | | Additional | | | | | | Total | |
| | Common stock | | | Paid-in | | | Accumulated | | | Stockholders' | |
| | Shares | | | Amount | | | Capital | | | Deficit | | | Deficit | |
Balance, January 1, 2017 | | | 289,333,360 | | | | 28,933 | | | | 33,383 | | | | (142,483 | ) | | | (80,167 | ) |
Net loss | | | - | | | | - | | | | - | | | | (9,877 | ) | | | (9,877 | ) |
Balance, March 31, 2017 | | | 289,333,360 | | | $ | 28,933 | | | $ | 33,383 | | | $ | (152,360 | ) | | $ | (90,044 | ) |
The accompanying notes are an integral part of these condensed financial statements.
LOVE INTERNATIONAL GROUP, INC.
Condensed Statements of Cash Flows
(Unaudited)
| | Three months ended March 31, | |
| | 2018 | | | 2017 | |
| | | | | | |
CASH FLOWS FROM OPERATING ACTIVITIES | | | | | | |
Net loss | | $ | (7,740 | ) | | $ | (9,877 | ) |
Changes in operating assets and liabilities: | | | | | | | | |
Deposits and prepaid expenses | | | 1,000 | | | | 2,200 | |
Accounts payable and accrued liabilities | | | (3,276 | ) | | | 4,542 | |
CASH USED IN OPERATING ACTIVITIES | | | (10,016 | ) | | | (3,135 | ) |
| | | | | | | | |
CASH FLOWS FROM FINANCING ACTIVITIES | | | | | | | | |
Advances from related party | | | 10,016 | | | | 3,135 | |
CASH PROVIDED BY FINANCING ACTIVITIES | | | 10,016 | | | | 3,135 | |
| | | | | | | | |
NET CHANGE IN CASH | | | - | | | | - | |
| | | | | | | | |
CASH BEGINNING OF PERIOD | | | - | | | | - | |
| | | | | | | | |
CASH END OF PERIOD | | $ | - | | | $ | - | |
| | | | | | | | |
SUPPLEMENTAL CASH FLOW DISCLOSURES | | | | | | | | |
Interest paid | | $ | - | | | $ | - | |
Income taxes paid | | $ | - | | | $ | - | |
The accompanying notes are an integral part of these condensed financial statements.
LOVE INTERNATIONAL GROUP, INC.
Notes to the Condensed Financial Statements
(Unaudited)
NOTE 1. ORGANIZATION, PRINCIPAL ACTIVITIES AND BASIS OF PREPARATION
Love International Group, Inc. ("we", "us", "our" or the "Company") was incorporated on May 23, 2013 under the laws of the State of Nevada. On November 11, 2015, a change in control of the Company occurred, whereby Walter Lee, the-then sole officer and director, sold 15,000,000 of his shares of common stock, representing 51.8% of the voting power of the issued and outstanding capital stock of the Company, in a private transaction to Yong Qiang Yang (8,250,000 shares) and Wei Min Jin (6,750,000 shares), who subsequently became officers and directors of the Company. Mr. Lee sold the remainder of his shares (5,000,000 shares) to other individuals in separate transactions not involving a public sale or distribution. After the sale of stock, Walter Lee had no further ownership of any voting securities of the Company.
On November 30, 2015, the Company accepted the resignation of Walter Lee from his positions as President, Principal Executive Officer, Principal Financial Officer and member of the Board of Directors. The Board of Directors appointed Yong Qiang Yang as President of the Company, and as a member of the Board of Directors, and Wei Min Jin as Principal Financial Officer and Secretary of the Company and a member of the Board of Directors, effective November 30, 2015.
All references above to share and per share data have not been adjusted to give effect of the forward stock split (see below).
On February 4, 2016, the Financial Industry Regulatory Authority approved: (a) changing the name of the Company to Love International Group, Inc. ("Name Change"); (b) increasing the aggregate number of authorized shares of Common Stock of the Company from one hundred and fifty million (150,000,000) shares, par value $0.001, to one billion (1,000,000,000) shares, par value $0.0001 per share ("Authorized Share Increase"); (c) a 10-for-1 forward stock split ("Forward Split"; together with the Name Change and Authorized Share Increase, the "Corporate Actions") of the issued and outstanding shares of Common Stock of the Company; and (d) a new trading symbol of LOVV.
On February 5, 2016, the Corporate Actions became effective and the issued and outstanding shares of common stock of the Company became 289,333,360.
On March 7, 2016, the trading symbol changed to LOVV and a new CUSIP number (54714U107) was assigned to the Company's common stock.
On May 18, 2016, the Company shifted its business focus from developing and launching an online, cross-border e-commerce platform to promote and market worldwide premium specialties and other well-known branded products with highly comparable discount pricing to developing and launching an online platform to promote cheap airline tickets and hotels as well as developing and launching a "Do-It-Yourself" ("DIY") system for the Company's customers to put together a trip with exotic activities such as hunting, flying a plane, or even piloting a submarine.
The Company anticipates the prices of the airline tickets and hotel rooms promoted on its online platform will be priced competitively, if not lower, than the marketplace as the Company plans on partnering with some of the airlines and big airline ticket wholesalers. As for the DIY system, the Company anticipates gaining market share based on the originality and specialty of the travel activities to be offered on the Company's online platform through local travel companies and/or travel specialists that the Company is going to partner with.
In the beginning, the Company anticipates targeting potential customers in mainland China and Hong Kong as to the promotion of airline tickets and hotel rooms. The airline tickets and hotel booking selections may be limited upon the launch of the Company's online platform. The Company anticipates focusing the DIY activities upon the launch of the online platform in South East Asia, Canada, United States and Australia.
The Company does not yet have any operations and the development of its business is speculative. It has not generated any operating revenues to date.
The Company had a working capital deficiency, accumulated deficit from recurring net losses and net liabilities as of December 31, 2017 and March 31, 2018. These factors raise substantial doubts about the Company's ability to continue as a going concern. The Company plans to raise additional funds through financing, either through a stock offering, or standard or convertible debt, in the future to meet its daily cash demands if required. However, there can be no assurance that the Company will be successful in obtaining further financing. Until and unless it is able to secure adequate financing, its business development will be curtailed.
The accompanying financial statements have been prepared assuming the Company will continue to operate as a going concern, which contemplates the realization of assets and the settlement of liabilities in the normal course of business. 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 this uncertainty related to the Company's ability to continue as a going concern.
All common share and per share amounts disclosed herein and in the accompanying financial statements have been retroactively restated to reflect the forward stock split, except as otherwise provided herein.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP").
The interim condensed financial information as of March 31, 2018 and for the three month periods ended March 31, 2018 and 2017 have been prepared without audit, pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures, which are normally included in financial statements prepared in accordance with U.S. GAAP have not been included. The interim condensed financial information should be read in conjunction with the Financial Statements and the notes thereto, included in the Company's Annual Report on Form 10-K for the year ended December 31, 2017, previously filed with the SEC on April 3, 2018.
In the opinion of management, all adjustments (which include all significant normal and recurring adjustments) necessary to present a fair statement of the Company's interim condensed financial position as of March 31, 2018, its interim condensed results of operations and comprehensive loss for the three month periods ended March 31, 2018 and 2017, as applicable, and its interim condensed results of cash flows for the three month periods ended March 31, 2018 and 2017, as applicable, have been made. The interim results of operations are not necessarily indicative of the operating results for the full fiscal year or any future periods.
Estimates and Assumptions
The preparation of financial statements in accordance with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the dates of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates and assumptions and could have a material effect on the Company's reported financial position and results of operations.
Foreign Currency Transactions
The reporting currency of the Company is the United States dollar ("U.S. Dollars"). The financial records of the Company are maintained in U.S. Dollars, which is the functional currency.
Monetary assets and liabilities denominated in currencies other than U.S. Dollars are translated into the functional currencies at the prevailing rates of exchange at the balance sheet date. Nonmonetary assets and liabilities are re-measured into U.S. Dollars at historical exchange rates. Transactions in currencies other than U.S. Dollars during the period are converted into U.S. Dollars at the applicable rates of exchange prevailing at the transaction dates. Transaction gains and losses are recognized in the statements of operations.
Cash and Cash Equivalents
Cash consists of cash on hand and in banks. The Company considers all highly liquid debt instruments, with initial terms of less than three months to be cash equivalents. The Company did not maintain any bank accounts as of March 31, 2018 and December 31, 2017.
Fair Value Measurements
ASC Topic 820, Fair Value Measurement and Disclosures, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. This topic also establishes a fair value hierarchy, which requires classification based on observable and unobservable inputs when measuring fair value. Certain current assets and current liabilities are financial instruments. Management believes their carrying amounts are a reasonable estimate of fair value because of the short period of time between the origination of such instruments and their expected realization and, if applicable, their current interest rates are equivalent to interest rates currently available. The three levels of valuation hierarchy are defined as follows:
| · | Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. |
| | |
| · | Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments. |
| | |
| · | Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement. |
The carrying amounts of financial assets and liabilities, such as cash and cash equivalents, balance with related parties and accounts payable approximate their fair values because of the short maturity of these instruments or the rate of interest of these instruments approximate the market rate of interest.
Stock-Based Compensation
The Company adopted ASC 718, Compensation – Stock-Based Compensation, to account for its stock options and similar equity instruments issued. Accordingly, compensation costs attributable to stock options or similar equity instruments granted are measured at the fair value at the grant date, and expensed over the expected vesting period. ASC 718 requires excess tax benefits be reported as a financing cash inflow rather than as a reduction of taxes paid. The Company did not grant any stock options since inception on May 23, 2013 through March 31, 2018.
Income Taxes
Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry-forwards. 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 applied to taxable income in the 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 statement of operations and comprehensive loss in the period that includes the enactment date.
The impact of an uncertain income tax positions on the income tax return must be recognized at the largest amount that is more-likely-than not to be sustained upon audit by the relevant tax authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Interest and penalties on income taxes will be classified as a component of the provisions for income taxes.
Basic and Diluted Loss per Share
Loss per share is computed using the weighted average number of shares outstanding during the period. The Company has adopted ASC 260, "Earnings per Share". Diluted loss per share for all the periods presented was the same as basic loss per share as there were no potential dilutive equity instruments.
New Accounting Pronouncements
Accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company's financial statements upon adoption.
NOTE 3. DUE TO RELATED PARTY
Due to related party consisted of the following:
| | Note | | March 31, 2018 | | | December 31, 2017 | |
| | | | | | | | |
MMI Group NZ Limited | | (a) | | $ | 147,177 | | | $ | 137,161 | |
__________
(a) | Yong Qiang Yang and Wei Min Jin, both directors of the Company, have beneficial interests in this company. |
The above balance is unsecured and non-interest bearing. This related company has agreed not to demand repayment until the Company is financially capable to do so.
NOTE 4. STOCKHOLDERS' EQUITY
During the three-month periods ended March 31, 2018 and 2017, the Company did not issue any common stock.
As at March 31, 2018 and December 31, 2017, the Company had 289,333,360 shares issued and outstanding.
NOTE 5. INCOME TAXES
The Company is incorporated in the State of Nevada and is subject to the U.S. federal tax and state tax. The Tax Cuts and Jobs Act of (“TCJ Act”) was signed into law in December 2017, and among its many provisions, it imposed a mandatory one-time transition tax on undistributed international earnings and reduced the U.S. corporate income tax rate to 21%, effective January 1, 2018. No provision for income taxes in the United States has been made as the Company had no taxable income for the three months ended March 31, 2018 and 2017.
The income tax provision differs from the amount of income tax determined by applying the U.S. federal and state income statutory tax rates to pretax loss as follows:
| | Three Months Ended March, 31 | |
| | 2018 | | | 2017 | |
| | | | | | |
Loss before income taxes | | $ | (7,740 | ) | | $ | (9,877 | ) |
Statutory income tax rate | | | 21 | % | | | 34 | % |
Tax benefit at statutory rates | | | 1,625 | | | | 3,358 | |
Change in valuation allowance | | | (1,625 | ) | | | (3,358 | ) |
Net provision for income taxes | | $ | - | | | $ | - | |
Net deferred tax assets consist of the following components:
| | March 31, | | | December 31, | |
| | 2018 | | | 2017 | |
Deferred tax asset: | | | | | | |
Net operating loss carry forwards | | $ | 40,924 | | | $ | 39,299 | |
Valuation allowance | | | (40,924 | ) | | | (39,299 | ) |
Net deferred tax asset | | $ | - | | | $ | - | |
The Company has accumulated net operating loss carryovers of approximately $194,878 and $187,138 as of March 31, 2018 and December 31, 2017, respectively, which are available to reduce future taxable income. 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 may be subject to annual limitations. A change in ownership may limit the utilization of the net operating loss carry forwards in future years. The tax losses begin to expire in 2035. The fiscal year 2017 remain open to examination by federal tax authorities and other tax jurisdictions.
NOTE 6. SUBSEQUENT EVENTS
Management has evaluated subsequent events through the date these financial statements were available to be issued. Based on our evaluation no material events have occurred that require disclosure.
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
As used in this Quarterly Report on Form 10-Q, references to "Love International" the "Company," "we," "our" or "us" refer to Love International Group, Inc. (formerly known as Quintec Corp.), unless the context otherwise indicates.
Forward-Looking Statements
Except for historical information, this Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Such forward-looking statements involve risks and uncertainties, including, among other things, statements regarding our business strategy, future revenues and anticipated costs and expenses. Such forward-looking statements include, among others, those statements including the words "expects," "anticipates," "intends," "believes" and similar language. Our actual results may differ significantly from those projected in the forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, those discussed herein as well as in the "Description of Business - Risk Factors" section in our Annual Report on Form 10-K, as filed on April 3, 2018. You should carefully review the risks described in our Annual Report on Form 10-K and in other documents we file from time to time with the Securities and Exchange Commission (the “SEC”). You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q. We undertake no obligation to publicly release any revisions to the forward-looking statements or reflect events or circumstances after the date of this document.
Although we believe that the expectations reflected in these forward-looking statements are based on reasonable assumptions, there are a number of risks and uncertainties that could cause actual results to differ materially from such forward-looking statements.
Business Introduction / Overview
Love International Group, Inc., formerly known as Quintec Corp., (the “Company”) was incorporated in Nevada on May 23, 2013. The Company was originally formed to develop a way to make toy and trinket shopping more interactive and more fun. Prior to November 2015, our primary mission was to develop and install 3D printing kiosks in shopping centers throughout Chile and eventually all of South America, which would allow customers to create 3D printed products on location, while they wait or shop for other items. The idea behind the technology was to allow customers to print toys and gifts at a low price, in a very interactive manner. On November 11, 2015, the Company underwent a change in control and a change in management, and the new management adopted a new business plan that was based on the development of an online, cross-border e-commerce platform for promotion and sales of foreign specialties and other discount branded products to worldwide customers.
Since May 18, 2016, the Company has shifted its business focus to developing and launching an online platform to promote cheap airline tickets and hotels as well as developing and launching a "Do-It-Yourself" ("DIY") system for the Company's customers to put together a trip with exotic activities such as hunting, flying a plane, or even piloting a submarine.
The Company is currently developing and launching the online platform to promote cheap airline tickets and hotels as well as developing and launching the DIY system. The Company anticipates the prices of the airline tickets and hotel rooms promoted on its online platform will be priced competitively, if not lower, than the marketplace as the Company plans on partnering with some of the airlines and big airline ticket wholesalers. As for the DIY system, the Company anticipates gaining market share based on the originality and specialty of the travel activities to be offered on the Company's online platform through local travel companies and/or travel specialists that the Company is going to partner with.
At the beginning, the Company anticipates targeting potential customers in mainland China and Hong Kong as to the promotion of airline tickets and hotel rooms. The airline tickets and hotel booking selections may be limited upon the launch of the Company's online platform. The Company anticipates focusing the DIY activities upon launching the online platform in South East Asia, Canada, United States and Australia.
We do not yet have any operations and the development of our business is speculative. We will require additional financing, either through a stock offering, or standard or convertible debt. Until and unless we are able to secure adequate financing, our business development will be curtailed.
Results of Operation
The following table provides selected financial data about our company as of March 31, 2018 and December 31, 2017.
Balance Sheet Data | | March 31, 2018 | | | December 31, 2017 | |
Cash | | $ | - | | | $ | - | |
Deposits and prepaid expenses | | | 19,000 | | | | 20,000 | |
Total Assets | | | 19,000 | | | | 20,000 | |
Total Liabilities | | | 151,562 | | | | 144,822 | |
Stockholders' Deficit | | $ | (132,562 | ) | | $ | (124,822 | ) |
The following summary of our results of operations for the three month periods ended March 31, 2018 and 2017 should be read in conjunction with our financial statements, as included in this Form 10-Q.
| | Three Months Ended March 31, | |
| | 2018 | | | 2017 | |
REVENUES | | $ | - | | | $ | - | |
| | | | | | | | |
EXPENSES | | | | | | | | |
General and administrative | | | 102 | | | | 34 | |
Professional fees | | | 7,638 | | | | 9,843 | |
Total Expenses | | | 7,740 | | | | 9,877 | |
Loss before income taxes | | | (7,740 | ) | | | (9,877 | ) |
Income tax | | | - | | | | - | |
NET LOSS | | $ | (7,740 | ) | | $ | (9,877 | ) |
Revenue
For the three months ended March 31, 2018 and 2017, we had no revenue.
Expenses
The majority of our expenses were primarily professional fees related to ongoing regulatory costs. Total expenses for the three months ended March 31, 2018 were $7,740, decreasing by $2,137 from $9,877 for the same period in 2017. The decrease was mainly attributed to decreased professional fees.
Net loss
Net loss for the three months ended March 31, 2018 was $7,740, decreasing by $2,137 from a net loss of $9,877, for the same period in 2017. The decrease was mainly attributed to decreased professional fees.
Liquidity and Capital Resources
To date, we are still preparing to launch our principal plan of operations. Thus we have minimal business and our expenses have been primarily for professional fees related to past registration statements and ongoing regulatory expenses.
We anticipate we will need $60,000 to fund the next 12 months of our operations. Currently we do not have sufficient capital to fund our operations and business development for the next 12 months. Management intends to raise additional funds through public or private placement offerings. No assurance can be given that additional financing will be available, or if available, will be on terms acceptable to us.
As of March 31, 2018, our cash balance was $0 and we had current liabilities $151,562.
We had no material commitments for capital expenditures as of March 31, 2018.
We have no known demands or commitments, and we are not aware of any events or uncertainties as of March 31, 2018 that will result in or that are reasonably likely to materially increase or decrease our current liquidity.
Working Capital
| | As of March 31, 2018 | | | As of December 31, 2017 | |
Current Assets | | $ | 19,000 | | | $ | 20,000 | |
Current Liabilities | | $ | 151,562 | | | $ | 144,822 | |
Working Capital Deficiency | | $ | (132,562 | ) | | $ | (124,822 | ) |
Cash Flows
| | Three Months Ended March 31, | |
| | 2018 | | | 2017 | |
Cash Used in Operating Activities | | $ | (10,016 | ) | | $ | (3,135 | ) |
Cash Provided by Financing Activities | | $ | 10,016 | | | $ | 3,135 | |
Net Decrease in Cash During Period | | $ | - | | | $ | - | |
As of March 31, 2018 and December 31, 2017, our cash balances were $0, and our total assets were $19,000 as of March 31, 2018, compared to $20,000 as of December 31, 2017. The decrease in total assets was primarily due to a decrease in prepaid expenses.
As of March 31, 2018, our company had total liabilities of $151,562, compared to total liabilities of $144,822 as of December 31, 2017.
As of March 31, 2018, our company had a working capital deficiency of $132,562, compared to $124,822 as of December 31, 2017. The increase in the working capital deficiency was primarily due to the costs associated with ongoing regulatory requirements.
Cash Flows from Operating Activities
During the three months ended March 31, 2018 and 2017, the Company used $10,016 and $3,135 in cash for operating activities, respectively. The increase in cash used in operating activities in the first quarter of 2018 was attributed to our net loss and settlement of accrued professional fees related to ongoing regulatory requirements.
Cash Flows from Investing Activities
We did not use any funds for investing activities in the three months ended March 31, 2018 and 2017.
Cash Flows from Financing Activities
During the three months ended March 31, 2018, we received $10,016 from advances from a related party, compared to $3,135 during the three months ended March 31, 2017.
Going Concern
We had a working capital deficiency, accumulated deficit from recurring net losses and net liabilities as of December 31, 2017 and March 31, 2018. These factors raise substantial doubts about our ability to continue as a going concern. We plan to raise additional funds through financing, either through a stock offering, or standard or convertible debt, in the future to meet our daily cash demands if required. However, there can be no assurance that we will be successful in obtaining further financing. Until and unless it is able to secure adequate financing, our business development will be curtailed. .
Off-Balance Sheet Arrangements
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 is material to investors.
Limited Operating History; Need for Additional Capital
There is no historical financial information about us on which to base an evaluation of our performance. We have generated no revenues from operations since our inception. We cannot guarantee we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources, possible delays in developing our website, and possible cost overruns due to the price and cost increases in supplies and services.
At present, we do not have enough cash on hand to cover operating costs for the next 12 months.
If we are unable to meet our needs for cash from either our operations, or possible alternative sources, then we may be unable to expand, develop, or continue our operations.
Critical Accounting Policies and Estimates
We prepare our financial statements in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP"), which requires management to make certain estimates and apply judgments. We base our estimates and judgments on historical experience, current trends and other factors that management believes to be important at the time the condensed financial statements are prepared. On a regular basis, we review our accounting policies and how they are applied and disclosed in our condensed financial statements.
While we believe that the historical experience, current trends and other factors considered support the preparation of our financial statements in conformity with U.S. GAAP, actual results could differ from our estimates and such differences could be material.
Our significant accounting policies are described more fully in Note 2 to our accompanying condensed financial statements. We believe the following accounting policies are the most critical to aid you in fully understanding and evaluating this Management Discussion and Analysis.
Foreign Currency Transactions
The reporting currency of the Company is the United States dollar ("U.S. Dollars"). The financial records of the Company are maintained in U.S. Dollars, which is the functional currency.
Monetary assets and liabilities denominated in currencies other than U.S. Dollars are translated into the functional currency at the prevailing rates of exchange at the balance sheet date. Nonmonetary assets and liabilities are re-measured into U.S. Dollars at historical exchange rates. Transactions in currencies other than U.S. Dollars during the period are converted into U.S. Dollars at the applicable rates of exchange prevailing at the transaction dates. Transaction gains and losses are recognized in the statements of operations.
Item 3. Quantitative and Qualitative Disclosures about Market Risk.
A smaller reporting company, as defined by Item 10 of Regulation S-K, is not required to provide the information required by this item.
Item 4. Controls and Procedures.
Disclosure Controls and Procedures
Management's Report on Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, to allow for timely decisions regarding required disclosure.
As of the end of the quarter covered by this Quarterly Report on Form 10-Q, our management carried out an evaluation, under the supervision and with the participation of our principal executive officer and principal financial officer, of the effectiveness of our disclosure controls and procedures. Based on the foregoing, our management concluded that our disclosure controls and procedures were not effective as of March 31, 2018. This was due to deficiencies that existed in the design or operation of our internal control over financial reporting that adversely affected our internal controls and that may be considered to be material weaknesses.
The matters involving internal controls that our management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: (1) lack of a functioning audit committee and compensation committee; (2) lack of a majority of outside directors on our board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; (3) inadequate segregation of duties consistent with control objectives; (4) lack of appropriate policies and procedures in place to evaluate the proper accounting and disclosures of key documents and agreements; and (5) insufficient skilled accounting personnel with an appropriate level of technical accounting knowledge and experience in the application of accounting principles generally accepted in the United States commensurate with our financial reporting requirements. The aforementioned material weaknesses were identified by our principal executive officer and principal financial officer in connection with the review of our financial statements as of March 31, 2018.
In order to cure the foregoing material weaknesses, we have taken or are taking the following remediation measures:
| · | We intend to establish an audit committee of the board of directors as soon as practicable. We envision that the audit committee will be primarily responsible for reviewing the services performed by our independent auditors, evaluating our accounting policies and our system of internal controls. |
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| · | We are committed to establishing the internal audit functions but due to limited qualified personnel in the region, we were not able to hire sufficient internal audit resources by March 31, 2018. |
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| · | We plan to provide additional training to our accounting personnel on U.S. GAAP, SEC reporting and other regulatory requirements regarding the preparation of financial statements. |
Despite the material weaknesses and deficiencies reported above, our management believes that our financial statements included in this report fairly present in all material respects our financial condition, results of operations and cash flows for the periods presented and that this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.
Changes in Internal Control over Financial Reporting
There have been no changes in our internal controls over financial reporting that occurred during the period ended March 31, 2018, that have materially or are reasonably likely to materially affect, our internal controls over financial reporting.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
We are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our Company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.
Item 1A. Risk Factors
As a "smaller reporting company", we are not required to provide the information required by this Item.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
None.
Item 6. Exhibits.
101.INS* | | XBRL Instance Document |
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101.SCH* | | XBRL Taxonomy Extension Schema Document |
| | |
101.CAL* | | XBRL Taxonomy Extension Calculation Linkbase Document |
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101.DEF* | | XBRL Taxonomy Extension Definition Linkbase Document |
| | |
101.LAB* | | XBRL Taxonomy Extension Label Linkbase Document |
| | |
101.PRE* | | XBRL Taxonomy Extension Presentation Linkbase Document |
_____________
* | Filed herewith |
** | Furnished herewith |
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Love International Group, Inc. | |
| | | |
Dated: May 14, 2018 | By: | /s/ Yong Qiang Yang | |
| Name: | Yong Qiang Yang | |
| | President | |
| | (principal executive officer) | |
| | | |
Dated: May 14, 2018 | By: | /s/ Wei Min Jin | |
| Name: | Wei Min Jin | |
| | Chief Financial Officer (principal financial officer) | |
