UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the quarterly period ended
or
For the transition period from to
Commission
file number:
(Exact name of registrant as specified in its charter)
| State
or other jurisdiction of incorporation or organization |
(I.R.S.
Employer |Identification No.) |
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered under Section 12(b) of the Exchange Act:
None
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.
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 ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
(Do not check if a smaller reporting company) |
☐ | Smaller reporting company |
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 ☐
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
shares of common stock are issued and outstanding as of December 13, 2021.
Table of Contents
| INDEX | ||
| Page | ||
| PART I | FINANCIAL INFORMATION | |
| Item 1. | Financial Statements (unaudited) | |
| BALANCE SHEETS as of October 31, 2021 and July 31, 2021 | 2 | |
| STATEMENTS OF OPERATIONS for the three months ended October 31, 2021 | 3 | |
| STATEMENTS OF CASH FLOWS for the three months ended October 31, 2021 | 5 | |
| NOTES TO THE UNAUDITED INTERIM FINANCIAL STATEMENTS | 6 | |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 9 |
| Item 3 | Quantitative and Qualitative Disclosures About Market Risk | |
| Item 4. | Controls and Procedures | 11 |
| PART II | OTHER INFORMATION | |
| Item 1. | Legal Proceedings | 12 |
| Item 1A. | Risk Factors | |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 12 |
| Item 3. | Defaults Upon Senior Securities. | 12 |
| Item 4 | Mine Safety Disclosures | 12 |
| Item 5. | Other Information | 12 |
| Item 6. | Exhibits | 13 |
| SIGNATURES | 14 | |
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PART I FINANCIAL INFORMATION
Certain information and footnote disclosures required under accounting principles generally accepted in the United States of America have been condensed or omitted from the following financial statements pursuant to the rules and regulations of the Securities and Exchange Commission. It is suggested that the following financial statements be read in conjunction with the year-end financial statements and notes thereto included in the Company’s Annual Report on Form 10K for the year ended July 31, 2021 In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature.
The results of operations for the three months ended October 31, 2021 are not necessarily indicative of the results for the entire fiscal year or for any other period.
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PRIVACY AND VALUE INC
UNAUDITED BALANCE SHEET
| October 31, 2021 | July 31, 2021 | |||||||
| $ | $ | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash | ||||||||
| Prepayment & Deposit | ||||||||
| Total current assets | ||||||||
| Fixed assets: | ||||||||
| Office Equipment | ||||||||
| Software | ||||||||
| Total fixed assets | ||||||||
| Total assets | ||||||||
| LIABILITIES & STOCKHOLDER’S EQUITY | ||||||||
| LIABILITIES | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued liabilities | ||||||||
| Total current liabilities | ||||||||
| Total Liabilities | ||||||||
| STOCKHOLDER’S EQUITY | ||||||||
| Common stock: $ par value, authorized, issued and outstanding as of October 31, 2021 | ||||||||
| Additional Paid in Capital | - | |||||||
| Accumulated Deficit | ( | ) | ( | ) | ||||
| Total stockholder’s equity | ( | ) | ||||||
| Total liabilities and stockholder’s equity | ||||||||
(The accompanying notes are an integral part of these unaudited financial statements)
2
PRIVACY AND VALUE INC.
UNAUDITED STATEMENT OF COMPREHENSIVE LOSS
For the three months period ended October 31, 2021
| Income: | ||||
| Affiliate revenue | $ | |||
| Total Income | ||||
| Expenses: | ||||
| General and administrative | ||||
| Net Loss: | ( | ) | ||
| Net loss per share – basic and diluted | ( | ) | ||
| Weighted average shares outstanding – basic and diluted |
(The accompanying notes are an integral part of these unaudited financial statements)
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PRIVACY AND VALUE INC.
UNAUDITED STATEMENT OF STOCKHOLDERS’ EQUITY
For the three months period ended October 31, 2021
| Common Stock | Additional Paid in | Accumulated | ||||||||||||||||||
| Number | Par Value | Capital | Deficit | Total | ||||||||||||||||
| $ | $ | $ | $ | |||||||||||||||||
| Opening Balance, July 31, 2021 | - | ( | ) | |||||||||||||||||
| Common Stock issued for Cash, October 30,2021 | - | |||||||||||||||||||
| Net Loss | - | - | - | ( | ) | ( | ) | |||||||||||||
| Closing Balance, October 31, 2021 | ( | ) | ( | ) | ||||||||||||||||
(The accompanying notes are an integral part of these unaudited financial statements)
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PRIVACY AND VALUE INC.
UNAUDITED STATEMENT OF CASH FLOWS
For the three months period ended on October 31, 2021
| $ | ||||
| Cash flows from operating activities | ||||
| Net loss for the period | ( | ) | ||
| Change in operating assets and liabilities | ||||
| Prepayments & deposits | - | |||
| Accounts payable and accrued liabilities | ||||
| Net cash used in operating activities | ||||
| Cash flows from investing activities | ||||
| Software | ( | ) | ||
| Net cash used in investing activities | ( | ) | ||
| Cash flows from financing activities | ||||
| Common stock | ||||
| Net cash used in investing activities | ||||
| Change in cash | ||||
| Cash – beginning of period | ||||
| Cash – end of period | ||||
| Supplemental cash flow disclosures | ||||
| Cash paid For: | ||||
| Interest | - | |||
| Income tax | - | |||
(The accompanying notes are an integral part of these unaudited financial statements)
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PRIVACY AND VALUE INC
NOTES TO FINANCIAL STATEMENTS
October 31, 2021
1. NATURE AND CONTINUANCE OF OPERATIONS
PRIVACY AND VALUE INC. (the “Company”) was incorporated in the state of Wyoming on April 21, 2021 (“Inception”). The Company is a development stage company that is currently developing employee monitoring software that balances employer concerns regarding employee efficiency and productivity with employee privacy.
2. GOING CONCERN
These financial
statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets and discharge its
liabilities in the normal course of business. The Company has incurred a net loss for the period of $(
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
These financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America and are presented in US dollars. The Company has selected July 31 as its year-end. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of its financial position and the results of operations have been reflected herein.
Cash and Cash Equivalents
The
Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. The
Company maintains cash and cash equivalent balances at one financial institution that is insured by the FDIC. As of October 31, 2021,
the Company had $
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PRIVACY AND VALUE INC
NOTES TO FINANCIAL STATEMENTS
October 31, 2021
Revenue Recognition
The
Company recognizes revenue in accordance with Accounting Standards Codification No. 605, “Revenue Recognition” (“ASC-605”),
ASC-605 requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists;
(2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured. Determination
of criteria (3) and (4) are based on management’s judgments regarding the fixed nature of the selling prices of the products delivered
and the collectability of those amounts. Provisions for discounts and rebates to customers, estimated returns and allowances, and other
adjustments are provided for in the same period the related sales are recorded. The Company will defer any revenue for which the product
has not been delivered or is subject to refund until such time that the Company and the customer jointly determine that the product has
been delivered or no refund will be required. Since inception to October 31, 2021, the Company has generated affiliate revenue of $
Because the Company assumes that the reported amounts of assets and liabilities will be recovered and settled, respectively, a difference between the tax basis of an asset or a liability and its reported amount in the balance sheet will result in a taxable or a deductible amount in some future years when the related liabilities are settled or the reported amounts of the assets are recovered, which gives rise to a deferred tax asset. The Company must then assess the likelihood that the deferred tax assets will be recovered from future taxable income and to the extent the Company believes that recovery is not likely, the Company must establish a valuation allowance.
The Company has adopted FASB guidance on accounting for uncertainty in income taxes which provides a consolidated financial statement recognition threshold and measurement attribute for a tax position taken or expected to be taken in a tax return. Under this guidance, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such a position should be measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The guidance also extends to de-recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, and income tax disclosures.
The Company computes income (loss) per share in accordance with FASB ASC 260 “Earnings per Share”. Basic loss per share is computed by dividing net income (loss) available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted income (loss) per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive. For the period from April 21, 2021 through October 31, 2021 there were no potentially dilutive debt or equity instruments issued or outstanding.
Use of Estimates and Assumptions
The preparation of consolidated 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 consolidated financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates.
Due to the limited level of operations, the Company has not had to make material assumptions or estimates other than the assumption that the Company is a going concern.
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PRIVACY AND VALUE INC
NOTES TO FINANCIAL STATEMENTS
October 31, 2021
4. CAPITAL STOCK
The total number of common shares authorized that may be issued by the Company is shares with a par value of $ per share.
During
the period ended October 31, 2021, the Company issued shares of common stock for total cash proceeds of $
At October 31, 2021, there were no issued and outstanding stock options or warrants.
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ITEM 2. Management’s Discussion and Analysis of Financial Conditions and Results of Operations.
Forward Looking Statements
This quarterly report contains forward-looking statements that involve risks and uncertainties. We use words such as anticipate, believe, plan, expect, future, intend and similar expressions to identify such forward-looking statements. You should not place too much reliance on these forward-looking statements. Our actual results are likely to differ materially from those anticipated in these forward-looking statements for many reasons, including the risks faced by us described in this section.
Background
We were incorporated on April 21, 2021 under the laws of the state of Wyoming. We are involved in the development of computer monitoring software known as Privacy and Value. We have retained independent computer software and application developers to develop our product to the specifications that we outline. Our president, Daniel Okelo, is responsible for developing the product concept that the independent developers subsequently design.
Privacy and Value Employee Monitoring Software
We are currently developing employee monitoring software known as “Privacy and Value”. Our goal is to develop a software product that balances employer concerns regarding employee efficiency and productivity with employee privacy.
As companies are increasingly attempting to meet the demands of employees that want work environment flexibility and are forced to avoid employee congregation in response to the current global Covid-19 pandemic, they are retaining staff that either work from home or they rely on outsourcing to retain employees and independent contractors in other countries. One of the primary concerns with having staff work in a separate location that removes them from the daily, direct oversight of management is that employee productivity will suffer. One of the responses to this concern is for businesses to use some form of worker surveillance in order to ensure that employees are utilizing their work time efficiently. However, businesses may face pushback from their staff due to concerns that their personal privacy is compromised when they are subject to constant monitoring during work hours. They may resist practices such as webcam surveillance or persistent computer screen observation.
To address employer concerns regarding staff efficiency and employee concerns regarding privacy, we intend to develop the Privacy and Value software that has features to monitor worker computer productivity while providing employees with reasonable privacy during their work days. The intended features of the software are as follows:
| ● | the software will monitor the employees’ computer desktops while they are actually working on the system. Surveillance will commence when an employee logs on to his or her computer through our software and will continue until the employee logs out of the system. After an employee signs out of the software, recording and monitoring will cease and the employee can access his or her computer contents and the Internet for personal purposes; |
| ● | when the employee is logged in, the software will allow management to maintain real-time access to employee activity and to view each employee’s desktop screen content and the keystrokes that the employee is typing. All of this information will also be recorded and stored for future management use with all information time stamped. The file name for each day’s recording will be the employee’s first name, last name, and the year, month, and day, which will allow a manager to identify the appropriate recording without difficulty; and |
| ● | based on employee actions, the software will calculate the amount of time that the employee was logged into the system based on a searchable time period (e.g., a shift, a week, or a month). It will also indicate the length of various time periods during which the employee did not make any keystrokes on his or her computer and allow the manager to quickly access the recording of employee’s desktop at the times when keystrokes commenced and stopped. The software will also provide details of the length of each break that the employee takes during the work period analyzed. It will also have tools that the manager can use, in tabular and graphic form, to compare the efficiency of employees in terms of keystrokes and time logged in to their computer. |
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Joint Venture Development of Software
Our parent company, Limitless Projects Inc., has entered into an Asset Purchase and Joint Venture agreement, as amended, whereby Cyber Apps World, Inc. (“Cyber Apps”), a reporting company, has agreed to purchase a 50% interest in the Privacy and Value software for the following payments:
| 1. | $10,000 upon execution of the agreement, which has been paid; and |
| 2. | an amount equal to the estimation of the value of the 50% interest in Privacy and Value based upon an independent business valuation, less the $10,000 payment, which amount shall be no less than $50,000 and no more than $250,000 and was due by June 15, 2021. |
Limitless Projects Inc. obtained an independent valuation of the Privacy and Value software in its present form of development that estimated its value at approximately $2,200,000. Accordingly, the amount that was due from Cyber Apps to Limitless Projects Inc. under the Asset Purchase and Joint Agreement was $250,000.
Our president, Daniel Okelo and our parent company, Limitless Projects Inc., also entered into agreements with Cyber Apps whereby they each will transfer 50,000,000 of our shares, for a total of 100,000,000 to Cyber Apps and its principals for a cash payment of $250,000 that was due on June 15, 2021. Cyber Apps did not make the $250,000 payment by the deadline date of June 15, 2021 and has not made the payment as of the date of this report. The parties are in the process of renegotiating the agreement payment terms. However, there is no guarantee that a revised agreement will be reached.
If Limitless Projects Inc. completes the sale of the 50% interest in the Privacy and Value software to Cyber Apps, the parties will form a single purpose joint for the purpose of completing, testing, marketing, and selling the Privacy and Value software. The joint venture will be managed by a management committee with each party appointing one member to the committee and those two members jointly appointing an independent third member of the committee.
Results of Operations for the Three months Ended October 31, 2021
Our net loss for the three-month period ended October 31, 2021 was $57,426, which consisted of general and administrative fees of $57,565 less revenue during the period of $139 relating to sales and affiliate revenue from our Privacy and Value software product.
Operating expenses have increased in the quarter ended October 31, 2021 as compared to the three months ended July 31, 2021 as a result of higher software development, marketing, and maintenance expenses relating to the Privacy and Value employee monitoring software. This is also reflected in higher accounts payable at period end.
LIQUIDITY AND CAPITAL RESOURCES
As of October 31, 2021, our current assets were $39,607 compared to $17,587 at July 31, 2021. The increase in current assets in the current fiscal year is due to subscription proceeds that we generated through our sale of common stock pursuant to our registration statement on Form S-1, as amended.
As of October 31, 2021, our current liabilities were $237,510 compared to $20,364 at July 31, 2021. Current liabilities on October 31, 2021 were comprised entirely of accounts payable and accrued liabilities.
We expect we will require additional capital to meet our long-term operating requirements. We expect to raise additional capital through, among other methods, the sale of equity or debt securities.
Cash Flows from Operating Activities
We have not generated positive cash flows from operating activities. For the three-month period ended October 31, 2021, net cash flows used in operating activities were $159,720 consisting of a net loss of $57,426, which was offset by non-cash components of accounts payable and accrued liabilities, as well as prepayments and deposits.
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Cash Flows from Investing Activities
For the period ended October 31, 2021, our cash flows used in investing activities were $160,000 which consisted of the purchase costs of fixed assets and software related to the development and sale of the Privacy and Value computer monitoring software.
Cash Flows from Financing Activities
We have financed our operations from the issuance of our shares of common stock. Net cash flows generated from financing activities were $22,300 in the three-month period ended October 31, 2021 relating to our sale of 1,115,000 shares of common stock at a price of $0.02 pursuant to our registration statement on Form S-1, as amended.
OFF-BALANCE SHEET ARRANGEMENTS
As of the date of this report, 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 are material to investors.
GOING CONCERN
The independent auditors’ report accompanying our July 31, 2021 financial statements contained an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern. The financial statements have been prepared “assuming that we will continue as a going concern,” which contemplates that we will realize our assets and satisfy our liabilities and commitments in the ordinary course of business.
Item 4. Controls and Procedures.
As supervised by our board of directors and our principal executive and principal financial officer, management has established a system of disclosure, controls and procedures and has evaluated the effectiveness of that system. The system and its evaluation are reported on in the below Management’s Annual Report on Internal Control over Financial Reporting. Our principal executive and financial officer have concluded that our disclosure, controls and procedures (as defined in Securities Exchange Act of 1934 (“Exchange Act”) Rule 13a-15(e)) as of October 31, 2021, were not effective, based on the evaluation of these controls and procedures required by paragraph (b) of Rule 13a-15.
Management’s Annual Report on Internal Control over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) of the Exchange Act. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles.
Management assessed the effectiveness of internal control over financial reporting as of October 31, 2021. We carried out this assessment using the criteria of the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework.
This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm, pursuant to rules of the Securities and Exchange Commission that permit us to provide only management’s report in this annual report. Management concluded in this assessment that as of October 31, 2021, our internal control over financial reporting is not effective.
There have been no significant changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the first quarter of our 2021 fiscal year that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II—OTHER INFORMATION
Item 1. Legal Proceedings.
None
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety
Not Applicable.
Item 5. Other Information
None.
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PART II
Item 6. Exhibits.
Copies of the following documents are included as exhibits to this report pursuant to Item 601 of Regulation S-K.
| SEC Ref. No. | Title of Document | |
| 101. INS | XBRL Instance Document | |
| 101. SCH | XBRL Taxonomy Extension Schema Document | |
| 101. CAL | XBRL Taxonomy Calculation Linkbase Document | |
| 101. DEF | XBRL Taxonomy Extension Definition Linkbase Document | |
| 101. LAB | XBRL Taxonomy Label Linkbase Document | |
| 101. PRE | XBRL Taxonomy Presentation Linkbase Document |
The XBRL related information in Exhibits 101 to this Annual Report on Form 10-K shall not be deemed “filed” or a part of a registration statement or prospectus for purposes of Section 11 or 12 of the Securities Act of 1933, as amended, and is not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of those sections.
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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.
Privacy and Value Inc. | ||
| Dated: December 13, 2021 | By: | /s/ Daniel Okelo |
| Daniel Okelo | ||
| President, Chief Executive Officer, Chief Financial Officer, and director | ||
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