Our management anticipates that it will likely be able to effect only one business combination, due primarily to our limited financing and the dilution of interest for present and prospective stockholders, which is likely to occur as a result of our management’s plan to offer a controlling interest to a target business in order to achieve a tax-free reorganization. This lack of diversification should be considered a substantial risk in investing in us, because it will not permit us to offset potential losses from one venture against gains from another.
The Company has not conducted any active operations since the divesture of the ATM machine sales operations as of October 31, 2008. No revenue has been generated by the Company for the fiscal years ended April 30, 2019 and 2018. It is unlikely the Company will have any revenues unless it is able to effect an acquisition or merger with an operating company, of which there can be no assurance. It is management's assertion that these circumstances may hinder the Company's ability to continue as a going concern. The Company’s plan of operation for the next twelve months shall be to continue its efforts to locate suitable acquisition candidates.
The $31,207 decrease in general and administrative expenses from $118,216 during the year ended April 30, 2018 to $87,009 during the year ended April 30, 2019 was due to decreased legal, accounting and audit fees during the current fiscal year.
During the year ended April 30, 2019, the Company incurred a net loss of $87,009 which, after adjusting for an increase in prepaid expenses of $667 and a decrease in accounts payable of $6,219, resulted in net cash of $93,895 being used in operating activities during the year. By comparison, during the year ended April 30, 2018, the Company incurred a net loss of $118,216 which, after adjusting for an increase in prepaid expenses of $3,333 and an increase in accounts payable of $8,201, resulted in net cash of $113,348 being used in operating activities during the period.
During the year ended April 30, 2019, the Company received $93,895 from advances from the Company’s majority shareholder. By comparison, during the year ended April 30, 2018, the Company received $113,348 from advances from related parties.
Our financial statements reflect the fact that we do not have any revenue to cover expenses. We are at present under-capitalized. The Company is dependent upon the receipt of capital investment or other financing to fund its ongoing operations and to execute its business plan of seeking a combination with a private operating company. In addition, the Company is dependent upon certain related parties to provide continued funding and capital resources. If continued funding and capital resources are unavailable at reasonable terms, the Company may not be able to implement its plan of operations.
We have audited the accompanying balance sheet of Prevention Insurance.Com (the “Company”) as of April 30, 2019, the related consolidated statements of operations, stockholders’ deficit and cash flows for the year then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of April 30, 2019, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.
We have also audited the retroactive effects on the financial statements as of and for the year ended April 30, 2018 of the reverse stock split that occurred during the year ended April 30, 2019 as discussed in Note 1 to the financial statements. In our opinion, the retroactive effects of the reverse stock split have been presented fairly, in all material respects, in conformity with accounting principles generally accepted in the United States of America. The financial statements of the Company as of and for the year ended April 30, 2018 were audited by other auditors whose report dated July 30, 2018, expressed an unqualified opinion on those statements, except that such report contained an explanatory paragraph in respect to uncertainty as of the Company’s ability to continue as a going concern.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has incurred losses since inception, has accumulated a significant deficit, has negative cash flows from operations, and currently has no revenues. These factors 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.
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting 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.
* as retrospectively restated for the 10:1 reverse stock split effective October 4, 2018
a reverse split of our outstanding common stock, $0.0001 par value, on a one (1) post-split share for ten (10)
The Corporate Actions became effective on October 4, 2018 (the “Effective Date”).
The fair value of cash and cash equivalents, prepayments and deposits, accounts payable and accrued liabilities approximate the carrying amount of these financial instruments due to their short maturity.
Basic net loss per common share (“EPS”) is computed by dividing loss available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted earnings per share is computed by dividing net income by the weighted average shares outstanding, assuming all dilutive potential common shares were issued. Diluted earnings per share is not presented when their effect is anti-dilutive. No potential dilutive securities were issued and outstanding during the years ended April 30, 2019 or 2018.
Income taxes are accounted for under the liability method. Under the liability method, future tax liabilities and assets are recognized for the estimated future tax consequences attributable to differences between the amounts reported in the financial statements and their respective tax bases. Future tax assets and liabilities are measured using enacted or substantially enacted income tax rates expected to apply when the asset is realized or the liability settled.
Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry-forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax basis. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax law and rates on the date of enactment.
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, 2019, the Company reported a net loss of $87,009, negative working capital of $347,421 and an accumulated deficit of $4,937,052 as of April 30, 2019. 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. In the interim, the Company intends to rely upon continued advances from the Company’s majority shareholder to fund its working capital needs. No assurances can be given that the Company will be successful in locating or negotiating with any target company or that the majority shareholder will continue to fund the Company’s working capital needs. As a result, there is substantial doubt about the Company’s ability to continue as a going concern.
During the year ended April 30, 2018, Haspro Holdings Sdn. Bhd., an entity related to the Company’s then controlling shareholders (“Former Affiliate”) advanced funds totaling $17,828 to the Company to meet its working capital requirements. The advances were unsecured, interest free and due on demand. As of April 30, 2018, the Former Affiliate had advanced $159,505 to the Company.
On June 25, 2018, the Former Affiliate assigned to Metrowork all of its rights to its loan to the Company in the amount of $159,505 and in addition, on that date, forever waived and discharged any and all claims that it has or may have against the Company.
During the year ended April 30, 2019, Metrowork advanced a further $93,895 to the Company to meet its working capital requirements, resulting in amounts owed to related parties totaling $348,920 and $255,025 at April 30, 2019 and 2018, respectively.
Deferred tax assets and valuation allowance at April 30, 2019 and 2018:
A provision for income taxes has not been made due to net operating loss carry-forwards of approximately $1,470,000. This carryforward is limited due to the changes in control of the Company that took place in the years ended April 30, 2008, 2016 and 2019 in accordance with the provisions under Internal Revenue Code Section 381. No tax benefit has been reported in the financial statements.
As of April 30, 2019, the Company did not have any tax positions for which it is reasonably possible that the total amount of unrecognized tax benefits will significantly increase or decrease within the next 12 months.
As of April 30, 2019, the Company was authorized to issue 10,000,000 shares of preferred stock with a par value of $0.0001.
No shares of preferred stock were issued or outstanding during the years ended April 30, 2019 and 2018.
As it relates to the reverse stock split, effective October 4, 2018 every 10 shares of issued and outstanding common stock were converted into one share of common stock. No fractional shares were issued in connection with the reverse stock split. Instead, a holder of record of common stock on October 4, 2018 who would otherwise have been entitled to a fraction of a share, received a whole share of common stock.
Other than adjustments arising from the reverse stock split, no shares of common stock were issued during the years ended April 30, 2019 and 2018.
The Company’s treasury stock comprised one share of common stock acquired at a cost of $52,954.