● contain projections of our future results of operations or of our financial condition; and
During the year ended April 30, 2016, four convertible notes totaling $199,500 were converted into 19,950,000 shares of common stock of the Company pursuant to their terms. No convertible debt was issued and outstanding during the year ended April 30, 2017.
The following is a summary of the Company’s cash flows provided by (used in) operating, investing, and financing activities for the fiscal years ended April 30, 2017 and 2016.
As a “smaller reporting company” as defined by Rule 12b-2 of the Exchange Act, the Company is not required to provide this information.
We have audited the accompanying balance sheets of Prevention Insurance.Com (the “Company”) as of April 30, 2017 and 2016, and the related statements of operations, changes in stockholders’ deficit, and cash flows for the years then ended. Prevention Insurance.Com’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Prevention Insurance.Com as of April 30, 2017 and 2016, and the results of its operations and its cash flows for each of the years then ended in conformity with accounting principles generally accepted in the United States of America.
Prevention Insurance.Com (the “Company”) was incorporated under the laws of the State of Nevada in 1975 as Vita Plus Industries, Inc. In March 1999, the Company sold its remaining inventory and changed its name to Prevention Insurance.Com. In 2005, the Company added a second line of business and had been focused on its development of its ATM machine sale operations. On December 28, 2007, the Company entered into an agreement wherein the Company had a change in control which resulted in the divestiture of the ATM division “Quick Pay”. The Company divested itself of the ATM machine sales operations on October 31, 2008.
Effective May 24, 2016, Mr. Yik Kei Ong resigned as a member of the Company’s Board of Directors. Mr. Ong did not resign as a result of any disagreement with the Company over any matter related to its operations, policies or practices.
The Company has evaluated all transactions from April 30, 2017 through the financial statement issuance date for subsequent event disclosure consideration.
As of April 30, 2017, 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.
There are various accounting standards and interpretations that have been issued during 2017, none of which are expected to have a material impact on the Company’s financial position, operations or cash flows
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, 2017, the Company reported a net loss of $125,257 and has reported an accumulated deficit of $4,731,827 as of April 30, 2017. 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.
Subsequent to April 30, 2017, through the date these financial statements were issued, the entity related to the Company’s controlling shareholder advanced further funds totaling $21,328 to the Company to meet its working capital requirements.
On April 22, 2015, the Company entered into a Convertible Note Agreement with Paragon Capital, LP, at that time, the Company’s controlling shareholder, in the amount of $17,500. The note was due on August 31, 2017, bore an interest rate of 6% per annum, compounded and to be paid at August 31, 2017. While the note was outstanding, the outstanding principal amount and all unpaid accrued interest under the note were convertible into shares of Common Stock of the Company at $0.01 per share. The Company assessed the embedded conversion feature and determined that the intrinsic value of the beneficial conversion feature at inception exceeded the face value of this note and accordingly recorded at beneficial conversion feature (capped at the face value of the of the note) of $17,500. Such beneficial conversion feature was accounted for as a debt discount, which was amortized to interest expense using the effective interest rate method over the life of the note. Effective December 8, 2015, the $17,500 principal balance of the loan was converted into 1,750,000 shares of our common stock, the unamortized balance of $16,559 debt discount was expensed in full and accrued interest of $662 was forgiven. As the accrued interest was with a related party, the gain on forgiveness of the interest has been recognized in additional paid in capital.
On August 31, 2015, the Company entered into a Convertible Note Agreement with Paragon Capital, LP, at that time, the Company’s controlling shareholder, in the amount of $35,000. The note is due on August 31, 2017, and bore interest at 6% per annum. While the note was outstanding, the outstanding principal amount and all unpaid accrued interest under the note were convertible into shares of Common Stock of the Company at $0.01 per share. The Company assessed the embedded conversion feature and determined that the intrinsic value of the beneficial conversion feature at inception exceeded the face value of this note and accordingly recorded at beneficial conversion feature (capped at the face value of the of the note) of $35,000. Such beneficial conversion feature was accounted for as a debt discount, which was amortized to interest expense using the effective interest rate method over the life of the note. Effective December 8, 2015, the $35,000 principal balance of the loan was converted into 3,500,000 shares of our common stock, the unamortized balance of $34,383 debt discount was expensed in full and accrued interest of $570 was forgiven. As the accrued interest was with a related party, the gain on forgiveness of the interest has been recognized in additional paid in capital.
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, 2017, the Company determined it was more likely than not the deferred tax assets would not be realized and recorded a full valuation allowance.
Effective from March 9, 2016 to July 19, 2017, the Company has maintained office space in Kuala Lumpor, Malaysia provided by the Company’s controlling shareholder also at no cost to the Company. Since July 19, 2017, the Company has maintained office space in Kuala Lumpur provided by the Company’s sole officer.
Accordingly, for the years ended April 30, 2017 and 2016, the Company recognized no rent expense.
During the year ended April 30, 2016, effective December 8, 2015, Convertible Notes Payable with principal balances totaling $199,500 were converted into 19,950,000 shares of our common stock.