We do not currently intend to retain any entity to act as a “finder” to identify and analyze the merits of potential target businesses. However, if we do, at present, we contemplate that at least one of the third parties who may introduce business combinations to us may be our majority shareholder, Paragon, or certain of its affiliates. Alan Donenfeld, our sole officer and director, is also the managing member of the General Partner of Paragon. There is currently no signed agreement or preliminary agreements or understandings between us and Paragon. Any finder’s fees paid to Paragon will be comparable with unaffiliated third party fees.
As of April 30, 2015, the Company has received an aggregate of $127,000 from Paragon to pay for fees and expenses incurred by the Company in connection with its Securities Exchange Act reporting requirements evidenced by a written demand note.
Our auditors have issued a going concern opinion on our financial statements.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
The accompanying financial statements have been prepared assuming that Prevention Insurance.Com will continue as a going concern. As discussed in Note 2 to the financial statements, Prevention Insurance.Com has suffered recurring losses from operations and has a working capital deficiency that raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
For the years ended April 30, 2015 and 2014, the Company did not realize any revenue.
The Company has evaluated all transactions from April 30, 2015 through the financial statement issuance date for subsequent event disclosure consideration.
As of April 30, 2015, the Company is an “emerging growth company” under the federal securities laws and will be subject to reduced public company reporting requirements. In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. The Company is choosing to take advantage of the extended transition period for complying with new or revised accounting standards.
The Company’s financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. For the year ended April 30, 2015, the Company reported a net loss of $39,709 and has reported an accumulated deficit of $4,334,054 as of April 30, 2015. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of these uncertainties. The Company’s ability to continue as a going concern is dependent upon its ability to develop additional sources of capital, locate and complete a merger with another company and ultimately achieve profitable operations. No assurances can be given that the Company will be successful in locating or negotiating with any target company.
As of April 30, 2015, the Company maintains office space in New York, New York with the Company’s majority shareholder at no cost to the Company. For the years ended April 30, 2015 and 2014, the rent expense was zero.
During the year ended April 30, 2015, the Company entered into a Convertible Note Agreement with Paragon Capital, LP in the amount of $17,500. The note is due on August 31, 2017, bears an interest rate of 6% per annum, compounded and to be paid at August 31, 2017. While the note is outstanding, the outstanding principal amount of and all unpaid accrued interest under the note share be convertible into shares of Common Stock of the Company at $0.01 per share.
During the years ended April 30, 2015 and 2014, the Company did not issue any shares of common or preferred stock.
As of April 30, 2015, the Company had a federal net operating loss carryforward of approximately $867,000, which expires beginning in 2017 and through 2035. This carryforward is limited due to the change in control that took place in the year ended April 30, 2008 and maybe further limited in the future upon change(s) in control of the Company in accordance with the provisions under Internal Revenue Code Section 381.
In assessing the recovery of the deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income in the periods in which those temporary differences become deductible. As of April 30, 2015, the Company determined it was more likely than not the deferred tax assets would not be realized and recorded a full valuation allowance.
As of April 30, 2015, the Company had an aggregate of $127,000 non-interest bearing demand notes payable to Paragon Capital LP.
On August 31, 2015, the Company exchanged the aggregate $127,000 non-interest bearing demand notes payable to Paragon Capital LP for a new promissory note in the aggregate amount of $127,000. The note is due on August 31, 2017 and bears an interest rate of 6% per annum. While the note is outstanding, the outstanding principal amount of and all unpaid accrued interest under the note share be convertible into shares of Common Stock of the Company at $0.01 per share.