3FORCES INC. STATEMENTS OF CASH FLOWS (Unaudited) |
| | | For the Three Months Ended March 31, |
| | | 2022 | | | 2021 |
| | | | | | |
Cash flows from operating activities: | | | | | | |
Net Loss | | $ | (131,941) | | $ | (103,089) |
Adjustments to reconcile net loss to net cash used in operating activities: | | | | | | |
Stock based compensation – related party | | | 6,875 | | | 6,875 |
Amortization expense | | | 6,300 | | | - |
Unrealized gain on trading securities | | | (8,321) | | | - |
Changes in assets and liabilities: | | | | | | |
Accounts payable | | | 3,132 | | | 612 |
Accrued interest – related party | | | 35,075 | | | 24,384 |
Accrued compensation– related party | | | 50,000 | | | 50,000 |
Net cash used in operating activities | | | (38,880) | | | (21,218) |
| | | | | | |
Cash flows from investing activities: | | | | | | |
Software development cost | | | (2,400) | | | (12,000) |
Net cash used in investing activities | | | (2,400) | | | (12,000) |
| | | | | | |
Cash flows from financing activities: | | | | | | |
Proceeds from related party | | | - | | | 40,000 |
Net cash provided by financing activities | | | - | | | 40,000 |
| | | | | | |
Effect of exchange rate on cash | | | (204) | | | - |
Net change in cash | | | (41,280) | | | 6,782 |
Cash, beginning of period | | | 163,289 | | | 235,378 |
| | | | | | |
Cash, end of period | | $ | 121,805 | | $ | 242,160 |
| | | | | | |
Supplemental Disclosures: | | | | | | |
Interest paid | | $ | - | | $ | - |
Income taxes paid | | $ | - | | $ | - |
The accompanying notes are an integral part of these unaudited financial statements.
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3FORCES INC.
Notes to Unaudited Financial Statements
March 31, 2022
NOTE 1 – ORGANIZATION AND BUSINESS OPERATIONS
Nature of Business
The Company was incorporated under the laws of the State of California on September 6, 2016 under the name Taluhu Inc. The Company’s name was changed to Live Inc. on September 29, 2016 and on September 6, 2020, the Company’s name was changed to Guuru Corp. As discussed further below, on April 29, 2021, the Company’s name was changed to 3Forces Inc.
On October 2, 2020, the Company formed Talguu Inc., an Arizona corporation, as a wholly owned subsidiary for the purpose of changing the domicile of the Company from California to Arizona. The process involved the filing of respective merger forms in each of Arizona and California. On January 15, 2021, the State of Arizona approved the Statement of Merger whereby the parent entity, then Guuru Corp (a California corporation, formerly Live Inc.), was merged into Talguu Inc. (an Arizona corporation). On March 15, 2021, the State of California is approved the merger transaction. As mentioned above, on April 29, 2021, the Company’s name was changed to 3Forces Inc.
We are cloud based business to consumer platform company. Currently, we have ManagerSpecial.com, JobDor.com, Talguu.com, and Trabahanap.com platforms. Only Trabahanap.com currently is in use by the public. The rest are in the development and testing stages. ManagerSpecial.com enables service providers such as restaurants, hotels, and any goods and services that need to find and offer discounts to buyers to purchase their expiring products. Trabahanap.com is our job search platform for entry level positions in service industries located in the Philippines market. JobDor.com provides a similar service in the United States market. Talguu.com is a broadcasting platform, where the content producers will be assigned their individual channels. The channels will be 100% commercial free. Each channel will deliver content circumscribed by a specific theme, such as personal health care, do-it-yourself topics, business formation and management, among others. Content will be provided by one or more providers who will produce and deliver the content on one of our channels. In this platform, the content will be subscribed by individual viewers for a fee. We will receive an agreed percentage of the fees.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation
The Company’s unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The accompanying unaudited condensed financial statements reflect all adjustments, consisting of only normal recurring items, which, in the opinion of management, are necessary for a fair statement of the results of operations for the periods shown and are not necessarily indicative of the results to be expected for the full year ending December 31, 2022. These unaudited condensed financial statements should be read in conjunction with the financial statements and related notes for the year ended December 31, 2021.
Use of estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include the estimated useful lives of property and equipment. Actual results could differ from those estimates.
Reclassifications
Certain reclassifications have been made to the prior period financial information to conform to the presentation used in the financial statements for the three months ended March 31, 2022.
Investments
The Company follows ASC subtopic 321-10, Investments-Equity Securities which requires the accounting for an equity security to be measured at fair value with changes in unrealized gains and losses included in current period operations. Where an equity security is without a readily determinable fair value, the Company may elect to estimate its fair value at cost minus impairment plus or minus changes resulting from observable price changes.
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Fair value measurement
The Company’s marketable securities consist of investments in equity securities. Dividends and interest income are accrued as earned. Realized gains and losses are determined on a specific identification basis. The Company reviews marketable securities for impairment whenever circumstances and situations change such that there is an indication that the carrying amounts may not be recovered. The changes in the fair value of these securities are recognized in current period earnings in accordance with ASC 825.
The Company follows GAAP which establishes a fair value hierarchy that prioritizes the valuation techniques and creates the following three broad levels, with Level 1 valuation being the highest priority:
Level 1 valuation inputs are quoted market prices in active markets for identical assets or liabilities that are accessible at the measurement date (e.g., equity securities traded on the New York Stock Exchange).
Level 2 valuation inputs are from other than quoted market prices included in Level 1 that are observable for the asset or liability, either directly or indirectly (e.g., quoted market prices of similar assets or liabilities in active markets, or quoted market prices for identical or similar assets or liabilities in markets that are not active).
Level 3 valuation inputs are unobservable (e.g., an entity’s own data) and should be used to measure fair value to the extent that observable inputs are not available.
Following is a description of the valuation methodologies used for assets measured at fair value on a recurring basis. There have been no changes in the methodologies used at March 31, 2022 and December 31, 2021.
Equity securities are valued at the closing price reported on the active market on which the individual securities are traded that the Company has access to.
Mutual funds are valued at the daily closing price as reported by the fund. Mutual funds held by the Company are open-end mutual funds that are registered with the U.S. Securities and Exchange Commission. These funds are required to publish their daily net asset value (“NAV”) and to transact at that price. The mutual funds held by the Company are deemed to be actively traded.
In accordance with the provisions of Fair Value Measurements, the following are the Company’s financial assets measured on a recurring basis presented at fair value.
Description | | March 31, 2022 | | Level 1 | | Level 2 | | Level 3 |
Assets: | | | | | | | | | | |
Marketable securities | | $ | 104,273 | | $ | 104,273 | | $ | - | | $ | - |
Description | | December 31, 2021 | | Level 1 | | Level 2 | | Level 3 |
Assets: | | | | | | | | | | |
Marketable securities | | $ | 95,952 | | $ | 95,952 | | $ | - | | $ | - |
Revenue Recognition
We follow Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers, for revenue recognition. Adoption of ASC 606 did not have a significant impact on our financial statements. We recognize revenue upon transfer of control of promised products or services to customers in an amount that reflects the consideration expected to be received in exchange for those products or services. We determine the transaction price associated with each deliverable based on the unique contract with the customer, which is considered to be a stand-alone contract that we retain the right to accept or reject. Revenue is recognized net of allowances for returns and any taxes collected from customers, which are subsequently remitted to governmental authorities.
The Company is currently recognizing revenue through, Trabahanap.com in the Philippines. We have a joint venture agreement with a local marketing company, ABS-CBN, by which they pay the local staff in the Philippines and do the marketing for the Company, in exchange for 60% of the revenue received.
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Comprehensive Income
The Company uses SFAS 130 “Reporting Comprehensive Income” (ASC Topic 220). Comprehensive income is comprised of net income and all changes to the statements of stockholders’ deficit. Comprehensive income for the three months ended March 31, 2022 and 2021 is included in net income as foreign currency translation adjustments.
Recently issued accounting pronouncements
The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.
NOTE 3 - GOING CONCERN
The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has an accumulated deficit of $2,285,351 as of March 31, 2022, had a net loss of $131,941 and net cash used in operating activities of $38,880 for the three months ended March 31, 2022. The Company’s ability to raise additional capital through the future issuances of common stock and/or debt financing is unknown. The obtainment of additional financing, the successful development of the Company’s contemplated plan of operations, and its transition, ultimately, to the attainment of profitable operations are necessary for the Company to continue operations. These conditions and the ability to successfully resolve these factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements of the Company do not include any adjustments that may result from the outcome of these aforementioned uncertainties.
The Company has developed and is managing three cloud based platforms as part of our overall business plan. In order for us to fully implement our business plan, we will use our available cash of approximately $121,805 as of December 31, 2021 and we will need approximately $1,217,195 in financing for a total of $1,339,000 in required funds. If all of these funds are not available from Mr. Keith Wong under our continued loan arrangements, we will seek to raise all or part of the funds through public or private debt or equity financings. These funds will enable us to fully develop and market our 3 platforms for the next 12 months, however, we can not predict our ability to successfully raise such funds.
Impact of COVID-19 on Our Business.
In March 2020, the World Health Organization declared the novel coronavirus (COVID-19) a global pandemic and recommended containment and mitigation measures worldwide. The spread of COVID-19 has affected segments of the global economy and may affect our operations, including the potential interruption of our supply chain. We are monitoring this situation closely, and although operations have not been materially affected by the COVID-19 outbreak to date, the ultimate duration and severity of the outbreak and its impact on the economic environment and our business is uncertain.
The extent to which COVID-19 impacts our operations will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration of the outbreak, new information which may emerge concerning the severity of COVID-19 and the actions to contain the coronavirus or treat its impact, among others. In particular, the continued spread of the coronavirus globally could adversely impact our operations, including among others, our manufacturing and supply chain, sales and marketing and could have an adverse impact on our business and our financial results. The COVID-19 outbreak is a widespread health crisis that has adversely affected the economies and financial markets of many countries, resulting in an economic downturn that could affect demand for our products and likely impact our operating results.
NOTE 4 – SOFTWARE DEVELOPMENT
Per ASC 985-20 expenses in the development of the software are expensed until technological feasibility has been reached and costs are determined to be recoverable. At this point additional expenses are capitalized. Capitalization ends, and amortization begins when the product is available for general release to customers. Software development costs are amortized over the estimated useful life of three years. As of March 31, 2022 and December 31, 2021, the Company has $120,300 and $124,200, respectively, net of amortization of $10,500 and $4,200, respectively, of capitalized software development costs.
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NOTE 5 - MARKETABLE SECURITIES
As of March 31, 2022 and December 31, 2021, the Company’s marketable securities were classified as follows:
| March 31, 2022 |
| | | Gross | | Gross | | |
| | | Unrealized | | Unrealized | | Fair |
| Cost | | Gains | | Losses | | Value |
Available-for-sale: | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Corporate Stocks | $ | 100,000 | | $ | 4,273 | | | $ | - | | | $ | 104,273 |
Total | $ | 100,000 | | $ | 4,273 | | | $ | - | | | $ | 104,273 |
| December 31, 2021 |
| | | Gross | | Gross | | |
| | | Unrealized | | Unrealized | | Fair |
| Cost | | Gains | | Losses | | Value |
Available-for-sale: | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Corporate Stocks | $ | 100,000 | | $ | - | | | $ | (4,046) | | | $ | 95,952 |
Total | $ | 100,000 | | $ | - | | | $ | (4,046) | | | $ | 95,952 |
NOTE 6 - RELATED PARTY
As of March 31, 2022, the Company has seven promissory notes with Keith Wong, the Company’s founder, Chief Executive Officer and sole director described in this Note.
On July 31, 2017, the Company executed a promissory note with Mr. Wong for $200,000. The note originally accrued interest at a rate of 10% (simple) per annum and is due on demand. The note was amended, effective November 1, 2019, in order to change the interest rate to compounded interest at 4% per quarter. As of March 31, 2022, there is $158,208 of accrued interest on this note.
On June 21, 2019, the Company executed a promissory note with Mr. Wong for $160,000. The loan is unsecured, accrues interest at 4% per quarter, compounded quarterly, and is due on demand. As of March 31, 2022, there is $87,395 of accrued interest on this note.
On August 16, 2019, the Company executed a promissory note with Mr. Wong for $60,000. The loan is unsecured, accrues interest at 4% per quarter, compounded quarterly, and is due on demand. As of March 31, 2022, there is $30,591 of accrued interest on this note.
On February 4, 2021, the Company executed a promissory note with Mr. Wong for $40,000. The loan is unsecured, accrues interest at 4% per quarter, compounded quarterly, and is due on demand. As of March 31, 2022, there is $8,666 of accrued interest on this note.
On May 27, 2021, the Company executed a promissory note with Mr. Wong for $54,141. The loan is unsecured, accrues interest at 4% per quarter, compounded quarterly, and is due on demand. As of March 31, 2022, there is $7,572 of accrued interest on this note.
On September 1, 2021, the Company executed a promissory note with Mr. Wong for $37,000. The loan is unsecured, accrues interest at 4% per quarter, compounded quarterly, and is due on demand. As of March 31, 2022, there is $3,553 of accrued interest on this note.
On November 1, 2021, the Company executed a promissory note with Mr. Wong for $60,000. The loan is unsecured, accrues interest at 4% per quarter, compounded quarterly, and is due on demand. As of March 31, 2022, there is $4,064 of accrued interest on this note.
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In addition to the above loans, on September 30, 2019, Mr. Wong advanced the Company $500 to open a bank account in the Company’s name in the Philippines. The loan is unsecured, accrues interest at 4% per quarter, compounded quarterly, and is due on demand. As of March 31, 2022, there is $270 of accrued interest on this loan.
Mr. Wong’s consulting agreement was renewed effective September 1, 2020. Annual compensation was increased from $180,000 to $200,000. In addition, he is entitled to receive 1,000,000 shares of common stock which will vest over four years (or monthly at the rate of 20,833 shares per month). The term of the agreement is four years and either party may terminate the agreement by delivering notice to the other. In this regard, during the year ended December 31, 2021, Mr. Wong earned 250,000 shares of common stock for services rendered under his consulting agreement, for total non-cash expense of $27,500. During the three months ended March 31, 2022, Mr. Wong earned 20,833 shares of common stock for services rendered under his consulting agreement, for total non-cash expense of $6,875. Since the Company’s common stock is not currently trading, shares were issued at the price of shares sold to third parties of $0.11. As of March 31, 2022, the shares have not yet been issued, and have been recorded as common stock to be issued as shown in stockholders’ deficit.
As of March 31, 2022 and December 31, 2021, there is $1,110,528 and $1,060,528, respectively, of accrued compensation due to Mr. Wong.
NOTE 7 – COMMON STOCK
Refer to Note 6 for related party equity transactions.
NOTE 8– ACCUMULATED OTHER COMPREHENSIVE LOSS
Balance of related after-tax components comprising accumulated other comprehensive loss are as follows:
| March 31, 2022 |
Accumulated other comprehensive loss, beginning of period | $ | (636) |
Change in cumulative translation adjustment | | (204) |
Accumulated other comprehensive loss, end of period | $ | (840) |
NOTE 9 - SUBSEQUENT EVENTS
In accordance with SFAS 165 (ASC 855-10) management has performed an evaluation of subsequent events through the date that the unaudited financial statements were issued and has determined that it does not have any material subsequent events to disclose in these unaudited financial statements.
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ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
FORWARD LOOKING STATEMENT NOTICE
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.
Financial information contained in this quarterly report and in our unaudited interim financial statements is stated in United States dollars and are prepared in accordance with United States generally accepted accounting principles.
Summary of Business
The Company was incorporated under the laws of the State of California on September 6, 2016 under the name Taluhu Inc. The Company’s name was changed to Live Inc. on September 29, 2016, on September 6, 2020, the Company’s name was changed to Guuru Corp. and on April 29, 2021, the Company’s name was changed to 3Forces Inc.
On October 2, 2020, the Company formed Talguu Inc., an Arizona corporation, as a wholly owned subsidiary for the purpose of changing the domicile of the Company from California to Arizona. The process involved the filing of respective merger forms in each of Arizona and California. On January 15, 2021, the State of Arizona approved the Statement of Merger whereby the parent entity, Guuru Corp (a California corporation, formerly Live Inc, a California corporation), was merged into Talguu Inc. (an Arizona corporation). On March 15, 2021, the State of California is approved the merger transaction. As mentioned above, on April 29, 2021, the Company’s name was changed to 3Forces Inc.
We currently have developed and are managing four cloud based platforms:
Talguu.com.
Our entertainment broadcasting platform, www.Talguu.com, is dedicated to entertainment, news, learning, and allowing the individual producers to sell tickets of their digital content to our users. The producers are given individual channels for them to market their products. The platform’s content will be provided by one or more producers who will produce and deliver the content to our users by selling tickets. We will receive an agreed percentage of the ticket revenues. Due to the impact of Covid 19, our development progress has been adversely impacted. We now plan to launch our initial “try out” channels in the third quarter of 2022 followed by the remaining channels during the second quarter of 2023. We may further delay the launch and marketing of all of our channels if we do not receive an additional $200,000 in third party funding.
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Trabahanap.com
Our jobs platform, www.trabahanap.com, helps bring employers and job hunters together to hire employees and to find jobs. It was commercially launched in the Philippines to the public during June 2019. This platform is developed by the Company and marketed by our Philippine partner, ABS-CBN, a large national TV network in the Philippines. As of March 31, 2022, we have over 698,216 users and over 3,602 employers on this site. Due to the impact of Covid 19, we only began charging employers at the end of the third quarter of 2021 and we booked $3,256 in revenue for fiscal year end December 31, 2021 and $238 in revenues for the quarter ended March 31, 2022. We expect this revenue to rise slowly as the pandemic continues to impact businesses in the Philippines.
ManagerSpecial.com
Our third platform, www.ManagerSpecial.com, provides a discount market place for sellers and buyers to find one another. Primarily, ManagerSpecial helps the sellers to sell and buyers to buy, products and services that have a limited useful life, such as food, produce, hotel rooms, beauty salon seats, manicure stations, idling labor, and anything thing that has a short expiration date. The sellers usually offer deep discounts to the buyers to move their excess inventories. Instead of letting their inventories become worthless after a certain time, we help sellers turn a total loss to a partial gain and we help the buyers purchase good products at a deep discount. Due to the severe impact of Covid 19 on the restaurant industry in 2021, we have now delayed the launch of this site until the third quarter of 2022. We will need approximately $100,000 in third party funding to initially market this platform for the second half of 2022 for each city.
JobDor.com
Our fourth platform, www.JobDor.com, is a job site that is similar to Trabahanap.com. It is designed for the US market. We have delayed the launch of this platform until the fourth quarter of 2022.
At this time, we can not predict how the emergence of new Covid variants will impact our four platforms.
Our offices are located at 7702 E Doubletree Ranch Road, Unit 300, Scottsdale, Arizona. Our telephone number is 480.902.3062 Our websites are www.3Forces.com, www.Talguu.com, www.ManagerSpecial.com, www.JobDor.com and www.trabahanap.com.
Our Current Operations.
As of March 31, 2022, we have $121,805 in available cash which is allocated towards our operations.
As of March 31, 2022, the Company has outstanding promissory notes in favor of Mr. Keith Wong in the total amount of $611,641 plus accrued interest of $300,319 on such notes. Mr. Wong, the Company’s primary executive officer and controlling stockholder, has informed the Company in writing that he does not intend to demand payment, in whole or in part, of the outstanding promissory notes until the earlier of (i) December 31, 2023 or (ii) at such time as the Company receives a minimum of $2,000,000 in proceeds from a public or private offering.
In addition, as of March 31, 2022, the Company has accrued $1,110,528 in compensation to Mr. Wong, which amount will not be due until upon the earlier of; a Nasdaq listing or an aggregate of at least 51% ownership of the Company is beneficially controlled by parties other than the current management (as of March 2, 2018).
Our Plan for Fiscal Year 2022.
Our plan of operations for each platform through fiscal year 2022 is as follows:
Talguu.com. We have completed approximately 80% of the required software by the end of our fiscal year 2021. This accelerated development speed was made possible by the Company’s CEO. Mr. Wong has spent a considerable amount of time to designing and programing the software in conjunction with our contract programmers. Therefore, we do not expect much additional expenditure in finishing the software for this platform. The marketing cost will not start until the third quarter of 2022. We will use funds from third party financings, if any, to fund our marketing efforts in 2022. We will need approximately $200,000 in third party marketing cost to initially launch the platform for second half 2022. If we are unable to obtain new funding in 2022, the marketing and launch of the platform will be delayed.
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Trabahanap.com. As of the date of this filing, we have completed the software development and the platform is fully operational in the Philippines. Our partner in the Philippines is marketing and promoting the platform, however, we are expecting approximately $2,000 in revenues for 2022. We do not anticipate significant revenues on this platform until the Covid pandemic is over in the Philippines. We anticipate normal engineering and design costs in order to improve and maintain the platform.
ManagerSpecial.com. The software development is completed. Due to Covid 19, the initial launch date in 2021 was revised multiple times. We are now planning to launch this platform in third quarter of 2022. We are waiting for the restaurants to open up dining room service, as our platform is designed to attract customers for dine-in restaurants. We will need approximately $100,000 to initially market this platform for the second half of 2022 for each city.
JobDor.com. The software development for this platform is completed, which is essentially a replication of our Trabahanap.com site. We plan to launch JobDor.com in the third quarter of 2022. We would need approximately $250,000 to market this platform for the second half of 2022.
Full Implementation of Business Plan.
In order for us to fully implement our business plan, we will use our available cash of approximately $121,805 as of March 31, 2022 and we will need approximately $1,217,195 in public or private financing for a total of $1,339,000 in required funds. Our founder, Mr. Keith Wong, has devoted substantial software engineering time into these various platforms. As a result, his contributions to date have obviated or minimized the need to hire similar professionals, and has resulted in a considerable saving for the Company. Nonetheless, we will need additional funds to enable us to fully develop and market our 4 platforms for the next 12 months. However, if the external funding is not available, Mr. Keith Wong will devote more of his engineering time to the software development and some of the software features would have to be curtailed. The breakdown of these costs is as follows:
Amount ($) | Expenditure |
50,000 | Costs for being a public entity |
100,000 | Software programming across 4 platforms |
39,000 | Cloud Hosting across 4 platforms |
550,000 | Marketing for Talguu.com, ManagerSpecial.com and JobDor.com |
600,000 | General, administrative and miscellaneous costs, |
| |
$1,339,000 | |
In this regard, we have filed a Form S-1 Registration Statement for an offering of our common stock totaling $2.5 million which went effective on October 31, 2019. As of the date of this filing, partially because of the Covid pandemic, we have not received any funds from the offering. We plan to continue the fund raising effort in 2022 and beyond. If we are unable to receive this minimum amount of funding from the offering, the Company will be required to scale back or delay our software development and marketing efforts. Further, if we do not receive any funds from the Offering or other funding, our operations will be limited as stated in Our Plan for Fiscal Year 2022 above. We continue to rely on our founder, Mr. Wong, to provide financial support for our platforms. However, we cannot be assured that Mr. Wong will continue to do so in the future.
Impact of COVID-19 on Our Business.
The Company continues to execute its business plan and seeks to achieve the results set forth in Our Current Operations above. At the present time, the Company has been affected by the full impact of the COVID-19 virus on its business. Our launch plans for ManagerSpecial and JobDor were delayed numerous times in 2020 and 2021. Our projections on spending, product development and milestone achievements are likely to be further revised as new information is obtained about this pandemic.
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RESULTS OF OPERATIONS
Results of Operations (Unaudited) for the Three Months Ended March 31, 2022 Compared to the Three Months Ended March 31, 2021.
The following table sets forth key components of the results of operations for the three month periods ended March 31, 2022 and 2021, respectively. The discussion following the table addresses these results.
| | For the Three Months Ended March 31, |
| | 2022 | | 2021 |
| | | | |
Revenue, net | | $ | 238 | | | $ | — | |
| | | | | | | | |
Operating Expenses: | | | | | | | | |
Officer compensation – related party | | | 56,875 | | | | 56,875 | |
Software development expense | | | 9,600 | | | | — | |
Amortization expense | | | 6,300 | | | | — | |
General and administrative expenses | | | 32,655 | | | | 21,886 | |
Total operating expenses | | | 105,430 | | | | 78,761 | |
| | | | | | | | |
Loss from operations | | | (105,192) | | | | (78,761) | |
| | | | | | | | |
Other income (expense): | | | | | | | | |
Interest expense | | | (35,075) | | | | (24,384) | |
Unrealized gain on trading securities | | | 8,321 | | | | — | |
Interest income | | | 5 | | | | 56 | |
Total other expense | | | (26,749) | | | | (24,328) | |
| | | | | | | | |
Loss before income taxes | | | (131,941) | | | | (103,089) | |
| | | | | | | | |
Provision for income taxes | | | — | | | | — | |
| | | | | | | | |
Net loss | | $ | (131,941) | | | $ | (103,089) | |
Revenues.
For the quarter ended March 31, 2022, we had $238 in revenues attributable to our Trabahanap.com platform in the Philippines. For the year ended March 31, 2021, we did not have any revenue.
Operating Expenses.
For the year ended March 31, 2022, we had total operating expenses of $105,430 as compared to total operating expenses of $78,761 for the three months ended March 31, 2021, an increase of approximately 25% from the prior year’s three-month period for the reasons discussed below. Operating expenses consists of officer compensation, software development expense, amortization expense and general and administrative expenses, which includes consulting and professional fees.
Officer compensation for the three months ended March 31, 2022 and March 31, 2021, respectively was $56,875 for both periods. Officer compensation relates to monthly compensation expense for Mr. Wong under his consulting agreement.
General and administrative expenses for the three months ended March 31, 2022 and March 31, 2021 were $32,655 and $21,886, respectively. The increase in general and administrative expenses for the current quarter was due to an increase of travel expense of approximately $3,500, consulting of $3,050 and $6,300 in software amortization expenses. In addition, during the current period, we had $9,600 in software development expense payable to third party programmers. We did not have similar charges for the same period last year.
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Total Other Expense. For the three months ended March 31, 2022, we incurred interest expense of $35,075, as compared to $24,384 for the three months ended March 31, 2021 due to an increase in related party loans. Interest expense results from loans from our Chief Executive Officer. We had unrealized gain in trading securities of $8,321 for the current period. We did not have a gain or loss from such activity in the same period last year. We had interest income of $5 for the current three-month period compared with $56 for the same period last year. Interest income is derived from funds held in an interest-bearing account.
Net Loss. We had a net loss of $131,941 for the three months ended March 31, 2022 compared with a net loss of $103,089 for the three months ended March 31, 2021. The increase in our net loss is due to the reasons discussed above.
Summary of Cash Flows
| | For the Three Months Ended March 31, |
| | 2022 | | 2021 |
Net cash used in operating activities | | $ | (38,880) | | $ | (21,218) |
| | | | | | |
Net cash used in investing activities | | $ | (2,400) | | $ | (12,000) |
| | | | | | |
Net cash provided by financing activities | | $ | - | | $ | 40,000 |
Net cash used in operating activities. We used cash in our operating activities for the three months ended March 31, 2022 primarily to fund our net loss and unrealized gains from securities, offset by accrued stock-based compensation to our sole executive officer, accrued accounts payable, accrued interest and accrued compensation to our sole executive officer. For the three months ended March 31, 2021, we used cash in our operating activities primarily to fund our net loss, offset by accrued stock-based compensation to our sole executive officer and a former officer, accrued accounts payable, accrued interest and accrued compensation to our sole executive officer.
Net cash used in investing activities. We used cash in our investing activities for the three months ended March 31, 2022 and March 31, 2021, respectively for software development of our various platforms.
Net cash provided by financing activities. We had no loans from our sole officer for the three months ended March 31, 2022 compared with $40,000 in such loans for the three month period ended March 31, 2021, respectively.
Liquidity and Capital Resources
From inception through March 31, 2022, we have received a total of $204,000 in funds from the private placement of our common stock. As of March 31, 2022, our total current assets are $226,078. In addition, Mr. Wong, has loaned the Company the sum of $611,641, plus accrued interest of $300,319 which amounts are due on demand. Mr. Wong has informed the Company in writing that he does not intend to demand payment, in whole or in part, of the outstanding promissory note until the earlier of (i) December 31, 2023 or (ii) at such time as the Company receives a minimum of $2,000,000 in proceeds from a public or private offering.
As set forth in our Full Implementation of Our Business Plan above, we will need additional debt or equity funding for the future development of our business, including funds form the public offering described herein. Given our limited cash on hand, if we are unable to receive a significant amount of funding, we will be unable to fully develop our business plan. Thus, we will be highly dependent upon the success of the public offering described herein. Therefore, the failure thereof would result in need to seek capital from other resources such as debt financing, which may not even be available to us. However, if such financing were available, because we are in are early stages of our business plan, we would likely have to pay additional costs associated with high risk loans and be subject to an above market interest rate. At such time these funds are required, management would evaluate the terms of such debt financing. If we cannot raise additional proceeds via a private placement of its common stock or secure debt financing, it would be required to cease business operations. As a result, investors could lose all of their investment.
These conditions and the ability to successfully resolve these factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements of the Company do not include any adjustments that may result from the outcome of these aforementioned uncertainties.
Recently issued accounting pronouncements
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The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.
Off-balance sheet arrangements
The Company has no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect or change on the Company’s financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors. The term “off-balance sheet arrangement” generally means any transaction, agreement or other contractual arrangement to which an entity unconsolidated with the Company is a party, under which the Company has (i) any obligation arising under a guarantee contract, derivative instrument or variable interest; or (ii) a retained or contingent interest in assets transferred to such entity or similar arrangement that serves as credit, liquidity or market risk support for such assets.
ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. |
As a "smaller reporting company" as defined by Item 10 of Regulation S-K, we are not required to provide information required by this Item.
ITEM 4. | CONTROLS AND PROCEDURES |
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 March 31, 2022. 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 Commission rules and forms. Management also confirmed that there was no change in our internal control over financial reporting during the nine months period ended March 31, 2022 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
PART II. | OTHER INFORMATION |
We know of no material, existing or pending legal proceedings against our Company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.
As a "smaller reporting company" as defined by Item 10 of Regulation S-K, we are not required to provide information required by this Item.
ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
None
ITEM 3. | DEFAULTS UPON SENIOR SECURITIES |
None
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ITEM 4. | MINE SAFETY DISCLOSURES |
Not applicable to our Company.
None
The following exhibits are included as part of this report by reference:
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SIGNATURES
Pursuant to 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.
Date: May 11, 2022
Live Inc. | |
| |
| |
/s/ Keith Wong | |
Keith Wong | |
Chief Executive Officer and | |
Chief Financial officer | |
(Principal Executive, Financial | |
and Accounting Officer) | |
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