KARX 10-Q
Karbon-X Corp. (KARX)
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 | |
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Commission File Number
(Exact name of registrant as specified in its charter) |
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(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)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
OTCBB |
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. ☐ Yes ☒
Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted 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 such files). ☐ Yes ☒
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ☐ | Accelerated filer | ☐ |
Non-accelerated filer | ☐ | Smaller reporting company | |
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| Emerging growth 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).
As of January 12, 2022, there were
TABLE of CONTENTS
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Management’s Discussion and Analysis of Financial Condition and Results of Operations. |
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PART I—FINANCIAL INFORMATION
Item 1. Financial Statements.
COCOLUV INC.
FINANCIAL STATEMENTS
November 30, 2021
(Un-Audited)
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COCOLUV INC.
BALANCE SHEETS
(Un-Audited)
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| November 30, 2021 |
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| May 31, 2021 |
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ASSETS |
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CURRENT ASSETS |
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Cash |
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Prepaid |
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TOTAL CURRENT ASSETS |
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LIABILITIES AND STOCKHOLDER’S (DEFICIT) | ||||||||
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CURRENT LIABILITIES |
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Accounts payable |
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Due to related party |
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TOTAL CURRENT LIABILITIES |
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COMMITMENTS AND CONTINGENCIES |
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STOCKHOLDERS’ (DEFICIT) |
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Common stock |
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Authorized |
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Issued and outstanding |
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Additional paid in capital |
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Accumulated deficit |
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TOTAL STOCKHOLDERS’ (DEFICIT) |
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TOTAL LIABILITIES AND STOCKHOLDER’S (DEFICIT) |
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The accompanying notes are an integral part of these financial statements.
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| Table of Contents |
COCOLUV INC.
STATEMENTS OF OPERATIONS
(Un-Audited)
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| For the three months ended November 30, 2021 |
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| For the three months ended November 30, 2020 |
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REVENUE |
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OPERATING EXPENSES |
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General and administrative |
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Professional fees |
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TOTAL OPERATING EXPENSES |
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NET LOSS |
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NET LOSS PER COMMON SHARE – BASIC AND DILUTED |
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WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING – BASIC AND DILUTED |
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The accompanying notes are an integral part of these financial statements.
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| Table of Contents |
COCOLUV INC.
STATEMENT OF STOCKHOLDER’S DEFICIT
FOR SIX-MONTH ENDED FROM JUNE 1, 2021 TO NOVEMBER 30, 2021
(Un-Audited)
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Balance, May 31, 2021 |
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Net loss for the three months ending August 31, 2021 |
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Balance, August 31, 2021 |
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Net loss for the three-months ending November 30, 2021 |
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Balance, November 30, 2021 |
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COCOLUV INC.
STATEMENT OF STOCKHOLDER’S DEFICIT
FOR THE SIX-MONTH ENDED FROM JUNE 1, 2020 TO NOVEMBER 30, 2020
(Un-Audited)
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Balance, May 31, 2020 |
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Net loss for the three-months ended August 31, 2020 |
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Balance, August 31, 2020 (unaudited) |
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Net loss for the three-months ended November 30, 2020 |
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Balance, November 30, 2020 (unaudited) |
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May 20, 2020, the Company approved a special resolution to undertake a forward split of the common stock of the Company on a basis of 50 new common shares for 1 old common share
The accompanying notes are an integral part of these financial statements.
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COCOLUV INC.
STATEMENTS OF CASH FLOWS
(Un-Audited)
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CASH FLOWS FROM OPERATING ACTIVITIES |
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Net loss for the period |
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Adjustments to reconcile net loss to net cash used in operating activities |
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Expenses paid by related party |
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Changes in operating assets and liabilities |
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Prepaid |
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Accounts payable |
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NET CASH USED IN OPERATING ACTIVITIES |
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CASH FLOWS FROM INVESTING ACTIVITIES |
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CASH FLOWS FROM FINANCING ACTIVITIES |
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Payment of purchase common stock |
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Proceeds on sale of common stock |
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NET CASH PROVIDED BY FINANCING ACTIVITIES |
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NET INCREASE IN CASH |
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CASH, BEGINNING OF PERIOD |
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CASH, END OF PERIOD |
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SUPPLEMENTAL CASH FLOW INFORMATION AND NONCASH INVESTING AND FINANCING ACTIVITIES: |
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Cash paid during the period for: |
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Interest |
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The accompanying notes are an integral part of these financial statements.
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COCOLUV INC.
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 2021 (Un-Audited) |
NOTE 1 – NATURE OF OPERATIONS AND BASIS OF PRESENTATION |
CocoLuv Inc. was incorporated in the State of Nevada as a for-profit Company on September 13, 2017 and established a fiscal year end of May 31. The Company intends to manufacture market and sell a product line of 5 hair care products derived from Virgin Coconut Oil. The initial 5 products will be 3 for women and 2 for men.
Going concern
To date the Company has generated no revenues from its business operations and has incurred operating losses since inception of $
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
Basis of Presentation
The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles for financial information and with the instructions to Form 10-Q. They do not include all information and footnotes required by United States generally accepted accounting principles for complete financial statements. However, except as disclosed herein, there has been no material changes in the information disclosed in the notes to the financial statements for the fiscal year ended May 31, 2021 included in the Company’s year-end financial statements on Form 10-K filed with the Securities and Exchange Commission. The unaudited financial statements should be read in conjunction with those financial statements included in the Form 10-K. In the opinion of Management, all adjustments considered necessary for a fair presentation, consisting solely of normal recurring adjustments, have been made. Operating results for the six-months ended November 30, 2021 are not necessarily indicative of the results that may be expected for the year ending May 31, 2022.
Use of Estimates and Assumptions
Preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain 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 period. Accordingly, actual results could differ from those estimates.
Commitments and Contingencies
On September 26, 2018
Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers highly liquid financial instruments purchased with a maturity of three months or less to be cash equivalents.
Fair Value of Financial Instruments
The carrying amount of the Company’s financial assets and liabilities approximates their fair values due to their short-term maturities.
COCOLUV INC.
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 2021 (Un-Audited) |
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) |
Loss per Common Share
The basic loss per share is calculated by dividing the Company’s net loss available to common shareholders by the weighted average number of common shares during the year. The diluted loss per share is calculated by dividing the Company’s net loss available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. Diluted loss per share is the same as basic loss per share due to the lack of dilutive items in the Company. As of November 30, 2021, there were no common stock equivalents outstanding.
Income Taxes
The Company follows the liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax balances and tax loss carry-forwards. Deferred tax assets and liabilities are measured using enacted or substantially enacted tax rates expected to apply to the taxable income in the years in which those differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the date of enactment or substantive enactment.
Stock-based Compensation
The Company follows ASC 718-10, "Stock Compensation", which addresses the accounting for transactions in which an entity exchanges its equity instruments for goods or services, with a primary focus on transactions in which an entity obtains employee services in share-based payment transactions. ASC 718-10 is a revision to SFAS No. 123, "Accounting for Stock-Based Compensation," and supersedes Accounting Principles Board ("APB") Opinion No. 25, "Accounting for Stock Issued to Employees," and its related implementation guidance. ASC 718-10 requires measurement of the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). Incremental compensation costs arising from subsequent modifications of awards after the grant date must be recognized. The Company has not adopted a stock option plan and has not granted any stock options. As at November 30, 2021 the Company had not adopted a stock option plan nor had it granted any stock options. Accordingly no stock-based compensation has been recorded to date.
Recent Accounting Pronouncements
The Company does not expect the adoption of any recent accounting pronouncements to have a material impact on its financial statements.
| NOTE 3 – COMMON STOCK |
The Company’s capitalization is
On September 30, 2017, the Company issued
Between August 2019 and April, 2020 the Company sold
On May 20, 2020, the founding shareholder of the Company returned
On May 20, 2020, the directors of the Company approved a special resolution to undertake a forward split of the common stock of the Company on a basis of 50 new common shares for 1 old common share.
NOTE 4 – RELATED PARTY TRANSACTIONS
During the six-month period ended November 30, 2021 the CEO, Reymund Guillermo, paid expenses of $
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
This section of this Form 10-Q includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our predictions.
Business Overview
CocoLuv Inc. (“CocoLuv Inc.” or the “Company”) was incorporated in the State of Nevada. We are an early-stage company that plans to commence operations as an online retailer offering was incorporated in the State of Nevada as a for-profit Company on September 13, 2017 and established a fiscal year end of May 31. The Company intends to manufacture market and sell a product line of 5 hair care products derived from Virgin Coconut Oil. The initial 5 products will be 3 for women and 2 for men.
CocoLuv Inc. is an emerging growth stage company which intends to manufacture market and sell a proposed product line of 5 hair care products derived from Virgin Coconut Oil. We currently have no product to sell, but we intend to create a haircare line of that will initially consist of 5 products; 3 for women and 2 for men. Our proposed products will be of superior quality in that they will have a base of Virgin Coconut Oil. CocoLuv Inc. CocoLuv Inc. anticipates that it will derive its income from the sale of its intended products as follows: Hair Shine (for women), Curl Balm (for women), Hair Treatment (for women), Hair Pomade (for men’s hair, beards, moustaches) and Hair Cream (for men). We do not anticipate revenues until such time as we enter into retail operations. Since we are presently in the development stage of our business, we can provide no assurance that we will successfully bring retail online sales to fruition.
We have not earned any revenues to date. Our independent registered public accountant has issued an audit opinion which includes a statement expressing substantial doubt as to our ability to continue as a going concern.
Results of Operations Three and Six-month periods
or the three-month periods ended November 30, 2021 and November 30, 2020, we had no revenue. Expenses for the three-month period ended November 30, 2021 totaled $24,692 resulting in a net loss of $24,962, compared to expenses for the three-month period ended November 30, 2020, totaled $9,001 resulting in a net loss of $9,001. The net loss for the three-month period ended November 30, 2021 is a result of office and general expense of $24,962 comprised primarily of professional fees of $23,500; filing fees of $655; telephone expenses of $28; rent expenses of $179; transfer agent expenses of $297; and bank service charges of $33. Compared to expenses for the three-months ended November 30, 2020 is a result of office and general expenses of $9,001 comprised primarily of professional fees of $6,000; filing fees of $1,833; telephone expenses of $27; rent expense of $312; transfer expenses of $796; and bank service charges of $33. The increase in expenses for the three-month period ended November 30, 2021 compared to November 30, 2020 is primarily due to an increase in professional fees of $20,000 relating to the Depository Trust Company application fee.
For the six-month periods ended November 30, 2021 and November 30, 2020, we had no revenue. Expenses for the six-month period ended November 30, 2021 totaled $32,916 resulting in a net loss of $32,916, compared to expenses for the six-month period ended November 30, 2020, totaled $15,763 resulting in a net loss of $15,763. The net loss for the six-month period ended November 30, 2021 is a result of office and general expense of $32,916 comprised primarily of professional fees of $30,145; filing fees of $1,228; telephone expenses of $55; rent expenses of $665; transfer agent expenses of $757; and bank service charges of $66. Compared to expenses for the six-months ended November 30, 2020 is a result of office and general expenses of $15,763 comprised primarily of professional fees of $12,000; filing fees of $2,333; telephone expenses of $55; rent expense of $513; transfer agent expenses of $796; and bank service charges of $66. The increase in expenses for the six-month period ended November 30, 2021 compared to November 30, 2020 is primarily due to an increase in professional fees of $20,000 relating to the Depository Trust Company application fee.
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| Table of Contents |
Capital Resources and Liquidity
There is substantial doubt that we can continue as an on-going business for the next twelve months unless we obtain additional capital. No substantial revenues are anticipated until we have implemented our plan of operations. With the exception of cash advances from our sole Officer and Director, our only source for cash at this time is investments by others by way of private placements. Since inception, we have raised $18,900 through the sale of Company’s common stock. We must raise additional cash to implement our strategy and stay in business.
As of November 30, 2021, we had $134 of cash compared to $352 of cash as of May 31, 2021. We anticipate that our current cash and cash equivalents and cash generated from financing activities will be insufficient to satisfy our liquidity requirements for the next 12 months. To date, the Company has incurred operating losses since inception of $117,058. As at November 30, 2021, the Company has working capital deficit of $98,168.
The Company requires additional funding to meet its ongoing obligations and to fund anticipated operating losses. Our auditor has expressed substantial doubt about our ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on raising capital to fund its initial business plan and ultimately to attain profitable operations. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might result from this uncertainty.
We expect to incur marketing, professional, and administrative expenses as well expenses associated with maintaining our filings with the Commission. We will require additional funds during this time and will seek to raise the necessary additional capital. If we are unable to obtain additional financing, we may be required to reduce the scope of our business development activities, which could harm our business plans, financial condition and operating results. Additional funding may not be available on favorable terms, if at all. The Company intends to continue to fund its business by way of equity or debt financing and advances from related parties. Any inability to raise capital as needed would have a material adverse effect on our business, financial condition and results of operations.
If we cannot raise additional funds, we will have to cease business operations. As a result, investors in the Company’s common stock would lose all of their investment.
Off-balance sheet arrangements
Other than the situation described in the section titled Capital Recourses and Liquidity, 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
Critical Accounting Policies and Estimates
The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and 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.
Risks
As a “smaller reporting company,” as defined in Rule 12b-2 of the Exchange Act, we are not required to provide the information called for by this Item.
Item 3. Quantitative and Qualitative Disclosures about Market Risk.
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.
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Item 4. Controls and Procedures.
Disclosure Controls and Procedures
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time period specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934 is accumulated and communicated to management including our principal executive officer and principal financial officer as appropriate, to allow timely decisions regarding required disclosure.
In connection with this quarterly report, as required by Rule 15d-15 under the Securities Exchange Act of 1934, we have carried out an evaluation of the effectiveness of the design and operation of our company’s disclosure controls and procedures. The material weaknesses in our disclosure control procedures are as follows:
1. Lack of formal policies and procedures necessary to adequately review significant accounting transactions. We utilize a third-party independent contractor for the preparation of our financial statements. Although the financial statements and footnotes are reviewed by our management, we do not have a formal policy to review significant accounting transactions and the accounting treatment of such transactions. The third-party independent contractor is not involved in our day to day operations and may not be provided information from our management on a timely basis to allow for adequate reporting/consideration of certain transactions.
2. Lack of audit committee and financial expert. We do not have an audit committee with a financial expert and, thus, we lack the appropriate oversight within the financial reporting process.
We intend to initiate measures to remediate the identified material weaknesses, including, but not necessarily limited to, the following:
| · | Establishing a formal review process of significant accounting transactions that includes participation of our principal executive officer, principal financial officer and corporate legal counsel. |
| · | Form an audit committee that will establish policies and procedures that will provide our Board of Directors with a formal review process that will among other things, assure that management controls and procedures are in place and being maintained consistently. |
Changes in Internal Control Over Financial Reporting
None
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PART II—OTHER INFORMATION
Item 1. Legal Proceedings.
Currently, we are not involved in any pending litigation or legal proceeding.
Item 1A. Risk Factors.
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.
Item 2. Unregistered Sales of Securities and Use of Proceeds.
None
Item 3. Defaults Upon Senior Securities.
None
Item 4. Mine Safety Disclosures
None
Item 5. Other Information.
None
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Item 6. Exhibits.
| Rule 13(a)-14(a)/15(d)-14(a) Certification of Chief Executive Officer | |
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| Rule 13(a)-14(a)/15(d)-14(a) Certification of Chief Financial Officer * | |
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* | Included in Exhibit 31.1 |
** | Included in Exhibit 32.1 |
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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.
CocoLuv Inc. (Registrant) | |||
| Date: January 12, 2022 | By: | /s/ Reymund Guillermo | |
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| Reymund Guillermo President and Director Principal and Executive Officer Principal Financial Officer Principal Accounting Officer | |
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