U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the quarterly period ended
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TABLE OF CONTENTS
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PART I. FINANCIAL INFORMATION
Item 1. Financial statements
LOGICQUEST TECHNOLOGY, INC.
BALANCE SHEETS
| March 31, | December 31, | |||||||
| 2023 | 2022 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Prepaid expenses and other current assets | $ | $ | ||||||
| Total current assets | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
| Current liabilities: | ||||||||
| Accrued liabilities | $ | $ | ||||||
| Total current liabilities | ||||||||
| Stockholders’ deficit: | ||||||||
| Undesignated preferred stock, $ | ||||||||
| Series C convertible non-redeemable preferred stock, $ | ||||||||
| Common stock, $ | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ deficit | ( | ) | ( | ) | ||||
| Total liabilities and stockholders’ deficit | $ | $ | ||||||
The accompanying notes are an integral part of these financial statements.
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LOGICQUEST TECHNOLOGY, INC.
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022
(UNAUDITED)
| 2023 | 2022 | |||||||
| Operating expenses | ||||||||
| General and administrative expenses | $ | $ | ||||||
| Stock compensation expense | ||||||||
| Loss from operations | ( | ) | ( | ) | ||||
| Interest expense | ( | ) | ||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| $ | ( | ) | $ | ( | ) | |||
The accompanying notes are an integral part of these financial statements.
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LOGICQUEST TECHNOLOGY, INC.
STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT
FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022
(UNAUDITED)
| PREFERRED STOCK | ADDITIONAL | |||||||||||||||||||||||||||||||||||
| SERIES C | SERIES D | PAID-IN | ACCUMULATED | |||||||||||||||||||||||||||||||||
| SHARES | CAPITAL | SHARES | CAPITAL | SHARES | CAPITAL | CAPITAL | DEFICIT | TOTAL | ||||||||||||||||||||||||||||
| Balance at December 31, 2022 | $ | $ | - | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||||
| Net loss | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Issue of Common Stock | - | - | ||||||||||||||||||||||||||||||||||
| Balance at March 31, 2023 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||
| PREFERRED STOCK | ADDITIONAL | |||||||||||||||||||||||||||||||||||
| SERIES C | SERIES D | PAID-IN | ACCUMULATED | |||||||||||||||||||||||||||||||||
| SHARES | CAPITAL | SHARES | CAPITAL | SHARES | CAPITAL | CAPITAL | DEFICIT | TOTAL | ||||||||||||||||||||||||||||
| Balance at December 31, 2021 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||
| Net loss | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Balance at March 31, 2022 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||
The accompanying notes are an integral part of these financial statements.
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LOGICQUEST TECHNOLOGY, INC.
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022
(UNAUDITED)
| 2023 | 2022 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Stock compensation expense | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Accrued liabilities | ||||||||
| Net cash used in operating activities | ||||||||
| Net decrease in cash and cash equivalents | ||||||||
| Cash and cash equivalents at beginning of period | ||||||||
| Cash and cash equivalents at end of period | $ | $ | ||||||
| Supplemental disclosure of cash flows Information: | ||||||||
| Cash paid for interest | $ | $ | ||||||
| Cash paid for income taxes | $ | $ | ||||||
| Non-cash transactions: | ||||||||
| Operating expenses directly paid by a related party | $ | $ | ||||||
The accompanying notes are an integral part of these financial statements.
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LOGICQUEST TECHNOLOGY, INC.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2023 (UNAUDITED) AND DECEMBER 31, 2022
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Logicquest Technology, Inc. (“we”, “our”, the “Company” or “Logicquest”) is a Nevada Corporation that previously consisted of the networking service (carrier/circuit) business. It provided internet connectivity to corporate clients on a subscription basis; essentially operating as a value-added provider until it ceased operations effective June 30, 2014.
The Company was originally incorporated as Solis Communications, Inc. on July 23, 2001 and adopted a name change to Crescent Communications Inc. upon completion of a reverse acquisition of Berens Industries, Inc. In 2004, we changed our name to Bluegate Corporation (“Bluegate”). On March 19, 2015, the Company changed its name to Logicquest Technology, Inc. (“Logicquest”).
The Company currently has no operations and the Company’s Board of Directors is currently seeking investment opportunities.
Following is a summary of the Company’s significant accounting policies:
BASIS OF PRESENTATION
The accompanying unaudited interim financial statements of the Company, have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and the rules of the Securities and Exchange Commission, and should be read in conjunction with the audited financial statements and notes thereto contained in Logicquest’s Annual Report filed with the SEC on Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year.
SIGNIFICANT ESTIMATES
The preparation of financial statements in conformity with U.S. GAAP 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 dates of the financial statements and the reported amounts of revenues and expenses during the periods. The extent to which the COVID-19 pandemic may directly or indirectly impact our business, financial condition, and results of operations is highly uncertain and subject to change. We considered the potential impact of the COVID-19 pandemic on our estimates and assumptions and there was not a material impact to our financial statements as of March 31, 2023 and December 31, 2022, and for the three months ended March 31, 2023 and 2022. Actual results could differ from estimates making it reasonably possible that a change in the estimates could occur in the near term.
RELATED PARTY TRANSACTIONS
A related party is generally
defined as (i) any person that holds
FAIR VALUE OF FINANCIAL INSTRUMENTS
For certain of the Company’s financial instruments, including prepaid expenses and accrued liabilities, the carrying amounts approximate fair values due to their short maturities.
Transactions involving related parties cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive, free-market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm’s-length transactions unless such representations can be substantiated.
It is not, however, practical to determine the fair value of amounts due to related parties and lease and management arrangement with related parties, if any, due to their related party nature.
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INCOME TAXES
The Company uses the liability method of accounting for income taxes. Under this method, deferred income taxes are recorded to reflect the tax consequences on future years of temporary differences between the tax basis of assets and liabilities and their financial amounts at year-end. The Company provides a valuation allowance to reduce deferred tax assets to their net realizable value.
The Company recognizes the tax
benefit from an uncertain tax position only if it is more likely than not 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 financial statements from such positions
are then measured based on the largest benefit that has a greater than
LOSS PER SHARE
Basic and diluted net loss per share is computed on the basis of the weighted average number of shares of common stock outstanding during each period. The Company does not have any potentially dilutive instruments for the three months ended March 31, 2023 and 2022. Accordingly, basic and diluted losses per share were identical for the three months ended March 31, 2023 and 2022.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
All new accounting pronouncements issued but not yet effective or adopted have been deemed not to be relevant to us, hence are not expected to have any impact once adopted.
2. GOING CONCERN CONSIDERATIONS
During the three months ended March 31, 2023 and 2022, and as of March 31, 2023 and December 31, 2022, we have been unable to generate cash flows sufficient to support our operations and have been dependent on debt raised from a related party. We experienced negative financial results as follows:
| 2023 | 2022 | |||||||
| Net loss for the three months ended March 31, 2023 and 2022 | $ | ( | ) | $ | ( | ) | ||
| Negative working capital as of March 31, 2023 and December 31, 2022 | ( | ) | ( | ) | ||||
| Stockholders’ deficit as of March 31, 2023 and December 31, 2022 | ( | ) | ( | ) | ||||
These factors raise substantial doubt about our ability to continue as a going concern. The financial statements contained herein do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should we be unable to continue in existence. Our ability to continue as a going concern is dependent upon our ability to generate sufficient cash flows to meet our obligations on a timely basis, to obtain additional financing as may be required, and ultimately to attain profitable operations. However, there is no assurance that profitable operations or sufficient cash flows will occur in the future.
Our current operations are primarily funded by Logicquest Technology Limited, a company controlled by the Company’s Chief Financial Officer, Mr. Cheng Yew Siong.
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3. ACCRUED LIABILITIES
The accrued liabilities are summarized below:
| March 31, 2023 | December 31, 2022 | |||||||
| Accrued general and administrative expenses | $ | $ | ||||||
| Accrued liabilities | $ | $ | ||||||
As of March 31, 2023 and December 31, 2022, accrued liabilities was mainly consists of unpaid professional fee.
4. INCOME TAXES
On December 22, 2017 U.S. tax
reform legislation known as the Tax Cuts and Jobs Act (the “2017 Act”) was signed into law. The 2017 Act made substantial
changes to U.S. tax law, including a reduction in the corporate tax rate from
The composition of deferred tax assets at March 31, 2023 and December 31, 2022 were as follows:
| March 31, 2023 | December 31, 2022 | |||||||
| Deferred tax assets | ||||||||
| Benefit from carryforward of net operating loss | $ | $ | ||||||
| Less valuation allowance | ( | ) | ( | ) | ||||
| Net deferred tax asset | $ | $ | ||||||
The difference between the income
tax benefit in the accompanying statement of operations and the amount that would result if the U.S. Federal statutory rate of
At March 31, 2022, for federal
income tax reporting purposes, the Company has $
5. SHAREHOLDERS’ EQUITY
On
February 24, 2023, the Board of Directors agreed to issue
6. COMMITMENTS AND CONTINGENCIES
On May 27, 2016, the Company
entered into an agreement for the lease of a virtual office in Princeton, NJ for monthly rental of $
7. SUBSEQUENT EVENTS
The Company follows the guidance in FASB ASC 855-10 for the disclosure of subsequent events. The Company evaluated subsequent events through the date the financial statements were issued and determined the Company has the following material subsequent event that needs to be disclosed:
Effective on April 7, 2023, the
selling shareholder of the Company, who owns
After giving effect to the purchases, RYVYL, Inc. became the major and controlling shareholder of the Company.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
This quarterly report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.
Our unaudited financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles (“US GAAP”). All references to “common shares” refer to the common shares in our capital stock.
The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this quarterly report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this quarterly report.
As used in this quarterly report, the terms “we”, “us”, “our”, “our company” and “Logicquest” mean Logicquest Technology, Inc., unless otherwise indicated.
OVERVIEW
Our company was formed on July 23, 2001 when Solis Communications, Inc., a company incorporated in the State of Texas on February 26, 2001, completed the acquisition of Berens Industries, Inc., a company originally incorporated in the State of Nevada on January 9, 1985. On September 17, 2001, we changed our name to Crescent Communications Inc. d.b.a Crescent Broadband. On November 15, 2004, we changed our name to Bluegate Corporation. On March 19, 2015, we changed our name to Logicquest Technology, Inc.
We are a Nevada corporation that previously operated as a broadband network service provider, providing internet connectivity to corporate clients on a subscription basis. During May 2014 our board of directors authorized an orderly wind-down of our Company’s internet connectivity business which ceased effective June 30, 2014.
We are currently a company with no operations. To sustain our company’s operation, our board is currently seeking investment opportunities. At this stage, we can provide no assurance that we will be able to locate compatible business opportunities, what additional financing we will require to complete a business opportunity, or whether the opportunity’s operations will be profitable. If we are unable to secure adequate capital to continue our business, our shareholders will lose some or all of their investment and our business will likely fail.
Effective on April 7, 2023, the selling shareholder of our Company, who owns 97.7% equity ownership of the Company and also holds a control position in the Company sold all of his equity interest in the Company (consisting of 99,457,724 shares of restricted common stock, 48 shares of Series C convertible non-redeemable preferred stock and 10 shares of Series D convertible non-redeemable preferred stock) to RYVYL, Inc. for a total purchase price of $225,000. After giving effect to the purchases, RYVYL, Inc. became the major and controlling shareholder of the Company.
RESULTS OF OPERATIONS
Three Months Ended March 31, 2023 compared to the Three Months Ended March 31, 2022
We had a net loss of $275,620 for the three months ended March 31, 2023, which was $176,223 more than the net loss of $99,397 for the three months ended March 31, 2022. The increase in our net loss was mainly due to the increase in stock compensation expense and professional fee which was partly offset by a decrease in interest expenses resulting from clearing up of all the outstanding notes by the Company in June 2022.
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The following table summarizes key items of comparison and their related decrease for the three months ended March 31, 2023 and 2022:
| Increase (Decrease) | ||||||||||||
| 2023 | 2022 | 2023 from 2022 | ||||||||||
| Revenue | $ | — | $ | — | $ | — | ||||||
| Stock compensation expense | 249,654 | — | 249,654 | |||||||||
| General and administrative expenses | 25,966 | 19,924 | 6,042 | |||||||||
| Loss from operations | (275,620 | ) | (19,924 | ) | 255,696 | |||||||
| Interest expense | — | (79,473 | ) | (79,473 | ) | |||||||
| Net loss | $ | (275,620 | ) | $ | (99,397 | ) | $ | (176,223 | ) | |||
Revenue
We did not earn any revenues during the three months ended March 31, 2023 or 2022.
Operating expenses
We had $25,966 general and administrative expenses for the three months ended March 31, 2023, an increase of $6,042 from $19,924 general and administrative expenses for the three months ended March 31, 2022, the increase was mainly due to increased professional fees of $ 6,042. For the three months ended March 31, 2023, the Company had stock compensation expense of $249,654 paid to the Company’s director.
LIQUIDITY AND CAPITAL RESOURCES
As of March 31, 2023, our cash and cash equivalents were $0; total current liabilities were $54,928 and total stockholders’ deficit was $54,417.
Working Capital
| At March 31, 2023 | At December 31, 2022 | |||||||
| Current assets | $ | 511 | $ | 511 | ||||
| Current liabilities | 54,928 | 28,962 | ||||||
| Working capital deficit | $ | (54,417 | ) | $ | (28,451 | ) | ||
We anticipate generating losses and, therefore, may be unable to continue operations further in the future.
FINANCIAL CONDITION
| Increase (Decrease) | ||||||||||||
| 2023 | 2022 | 2023 from 2022 | ||||||||||
| Net cash provided by (used in) operating activities | $ | — | $ | — | $ | — | ||||||
| Net cash provided by (used in) investing activities | ||||||||||||
| Net cash provided by (used in) financing activities | — | — | — | |||||||||
| Net increase (decrease) in cash | $ | — | $ | — | $ | — | ||||||
| Cash balance at end of period | $ | — | $ | — | $ | — | ||||||
We did not generate any revenues nor have any cash activities during the three months ended March 31, 2023 and 2022; however, we accrued professional fees of $ 25,966 and stock compensation expense of $249,654 during the three months ended March 31, 2023.
To date we have relied on proceeds from the sale of our shares and on loans from officers and directors, related companies and an independent third party in order to sustain our basic, minimum operating expenses; however, we cannot guarantee that we will secure any further sales of our shares or that our officers and directors, related companies or the independent third party will provide us with any future loans. We intend to use debt to cover the anticipated negative cash flows until we can operate at a break-even cash flow mode. We may seek additional capital to fund potential costs associated with possible expansion and/or acquisitions. We believe that future funding may be obtained from public or private offerings of equity securities, debt or convertible debt securities, or other sources. Stockholders should assume that any additional funding will likely be dilutive.
We are not aware of any known trends, demands, commitments, events or uncertainties that will result in or that are reasonably likely to result in our liquidity increasing or decreasing in any material way.
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CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Our discussion and analysis of our financial condition and results of operations are based upon financial statements which have been prepared in accordance with generally accepted accounting principles in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate these estimates. We base our estimates on historical experience and on assumptions that are believed to be reasonable. These estimates and assumptions provide a basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions, and these differences may be material. See Note 1 of the Notes to Financial Statements included in this quarterly report for a summary of significant accounting policies and the effect on our financial statements.
GOING CONCERN
We remain dependent on outside sources of funding for continuation of our operations. Our independent registered public accounting firm issued a going concern qualification in their report contained herein regarding substantial doubt about our ability to continue as a going concern.
During the three months ended March 31, 2023 and 2022, and as of March 31, 2023 and December 31, 222, we have been unable to generate cash flows sufficient to support our operations and have been dependent on debt raised from related parties and independent third parties. We experienced negative financial results as follows:
| 2023 | 2022 | |||||||
| Net loss for the three months ended March 31, 2023 and 2022 | $ | (275,620 | ) | $ | (99,397 | ) | ||
| Negative working capital as of March 31, 2023 and December 31, 2022 | (54,417 | ) | (28,451 | ) | ||||
| Stockholders’ deficit as of March 31, 2023 and December 31, 2022 | (54,417 | ) | (28,451 | ) | ||||
These factors raise substantial doubt about our ability to continue as a going concern. The financial statements contained herein do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should we be unable to continue in existence. Our ability to continue as a going concern is dependent upon our ability to generate sufficient cash flows to meet our obligations on a timely basis, to obtain additional financing as may be required, and ultimately to attain profitable operations. However, there is no assurance that profitable operations or sufficient cash flows will occur in the future.
Our current operations are primarily funded by Logicquest Technology Limited, a company controlled by the Company’s Chief Financial Officer, Mr. Cheng Yew Siong.
These steps have provided us with the cash flows to continue our business, but have not resulted in significant improvement in our financial position. We are considering alternatives to address our cash flow situation that include:
| ● | Raising capital through additional sale of our common stock and/or debt securities. | |
| ● | Reducing cash operating expenses to levels that are in line with current revenues. |
These alternatives could result in substantial dilution of existing stockholders. There can be no assurance that our current financial position can be improved, that we can raise additional working capital or that we can achieve positive cash flows from operations. Our long-term viability as a going concern is dependent upon the following:
| ● | Our ability to locate sources of debt or equity funding to meet current commitments and near-term future requirements. | |
| ● | Our ability to achieve profitability and ultimately generate sufficient cash flow from operations to sustain our continuing operations. |
OFF-BALANCE SHEET ARRANGEMENTS
We have no 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, and capital expenditures or capital resources that are material to stockholders.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
As a smaller reporting company, as defined in 17 CFR § 229.10(f)(1), we are not required to provide the information requested by this Item.
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Item 4. Controls and Procedures.
The Company’s Chief Executive, Yin Yan, is responsible for establishing and maintaining disclosure controls and procedures for the Company.
Evaluation of Disclosure Controls and Procedures
We are required to maintain “disclosure controls and procedures” as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934. In designing and evaluating our disclosure controls and procedures, our management recognized that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of disclosure controls and procedures are met. Additionally, in designing disclosure controls and procedures, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Based on their evaluation as of the end of the period covered by this report, our Chief Financial Officer has concluded that our disclosure controls and procedures were not effective such that the information relating to our company, required to be disclosed in our Securities and Exchange Commission reports (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and (ii) is accumulated and communicated to our management, including our Chief Executive Officer, who until such time the Company hires a Chief Financial Officer/Treasurer will be serving as our principal accounting officer, to allow timely decisions regarding required disclosure as a result of continuing weaknesses in our internal control over financial reporting.
As disclosed in our Annual Report on Form 10-K for the year ended December 31, 2022, based on management’s assessment of the effectiveness of our internal controls over financial reporting, management concluded that our internal controls over financial reporting were not effective as of December 31, 2022, due to insufficiently qualified accounting and other finance personnel with an appropriate level of U.S. GAAP knowledge and experience, and lack of segregation of duties. Management believes that our lack of experience with U.S. GAAP and lack of segregation of duties constitutes a material weakness in our internal control over financial reporting. Until such time, if ever, that we remediate the material weakness in our internal control over financial reporting we expect that the material weaknesses in our disclosure controls and procedures will continue.
Report of Management
Our management is responsible for establishing and maintaining adequate internal control over financial reporting (“ICFR”), as defined in Exchange Act Rule 13a-15. Our ICFR is designed to provide reasonable assurance to our management and board of directors regarding the preparation and fair presentation of published financial statements. Management conducted an assessment of our ICFR based on the framework and criteria established by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework (2013). Based on the assessment, management concluded that, as of March 31, 2023, our ICFR was not effective at the reasonable assurance level based on those criteria.
Our independent public accountant has not conducted an audit of our controls and procedures regarding ICFR and therefore expresses no opinion with regards to the effectiveness or implementation of our controls and procedures with regards to ICFR.
Changes in Internal Controls over Financial Reporting
There was no change in the Company’s internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) that occurred during the quarter ended March 31, 2023, that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
Inherent Limitations on Effectiveness of Controls
The Company’s management does not expect that its disclosure controls or its ICFR will prevent or detect all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting during the quarter ending on March 31, 2023 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.
We know of no material, active or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.
Item 1A. Risk Factors
As a smaller reporting company, we are not required to provide the information required by this Item.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
On March 6, 2023, the Company issued 98,000,000 shares of its common stock to Ang Woon Han as compensation under an Employment Agreement for Director between the Company and Mr. Han dated February 24, 2023. The shares were issued in consideration of past services rendered by Mr. Han as a Director of the Company and for future services. Mr. Han paid no cash consideration for the shares. The Company relied on Section 4(a)(2) of the Securities Act as an available exemption to registration, and the shares were issued as restricted securities under Rule 144 of the Securities Act.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
On April 17, 2023, in a private transaction consented to by the Company, Ang Woon Han sold 99,457,724 shares of restricted common stock to RYVYL, Inc., a California corporation (NASDAQ:RVYL), along with 48 shares of Series C Convertible Non-Redeemable Preferred Stock (“Series C”) and 10 shares of Series D Convertible Non-Redeemable Preferred Stock (“Series D”), for $225,000 resulting in the change in control of the Company. The Company is holding in escrow, however, 1,457,724 shares of the common stock sold, and $50,000 of the purchase price, pending a lost certificate replacement, which the Company expects to close in the second quarter. The Series C converts into 1,250 shares of common stock, and each share votes at the equivalence of 18,750 per share, and Series D converts into 1,250 shares of common stock, and each share votes at the equivalence of 187,500 shares of common stock. As a result of this transaction, RYVL holds title to 97.7% of the Company’s common stock, and all issued and outstanding shares of preferred stock in the Company. The source of the funds used for the purchase was general operating revenue of RYVL. There are no arrangements or understandings between RYVL and Mr. Han, or their respective associates, with respect to election of directors or other matters.
As a result of the above-referenced transaction, Cheng Yew Siong resigned as Director, Chief Financial Officer and Principal Accounting Officer, and Ang Woon Han resigned as Director effective April 7, 2023. In turn, RVYL voted its shares to appoint Ben Errez, as Chairman of the Board of Directors, and Ezra Laniado and Genevieve Baer, both of whom are deemed independent under Rule 5605(a)(2) of the Nasdaq Capital Markets, as directors. In turn, the Board appointed Errez as President and Chief Executive Officer, and Jasmine Farrington as Secretary. Farrington has no policy-making authority as Secretary. The Board has yet elected a Chief Financial Officer but intends on doing so within the second quarter of 2023. Until such time, Errez shall be serving as principal financial and accounting officer.
12
Business Experience of Directors and Executive Officer
Ben Errez, age 62, is our Chairman of the Board, and President and Chief Executive Officer (and principal accounting officer). He has acted as Chairman of the Board of Directors, Executive Vice President, Principal Financial Officer and Principal Accounting Officer for RVYL since July 2017. Since 2017, Errez has been a principal of the GreenBox Business. From August 2004 until August 2015, Errez formed the start-up IHC Capital, where he held the position of Principal Consultant from founding to the present date, through which he advises clients in the South Pacific region with market capitalizations ranging from $50M to $150M on matters such as commerce, security, reliability and privacy. From January 1991 to August 2004, he served as Software Development Lead for the Microsoft International Product Group. He led the International Microsoft Office Components team (Word, Excel, PowerPoint) in design, engineering, development and successful deployment. He also served as Executive Representative of Microsoft Office and was a founding member of the Microsoft Trustworthy Computing Forum, both within the company, and internationally. Errez co-authored the first Microsoft Trustworthy Computing Paper on Reliability. At Microsoft, Mr. Errez was responsible for the development of the first Microsoft software translation Software Development Kit (“SDK”) in Hebrew, Arabic, Thai and Simplified Chinese, as well as the development of the first bidirectional extensions to Rich Text Format (“RTF”) file format, all bidirectional extensions in text converters for Microsoft Office, and contributed to the development of the international extensions to the Unicode standard to include bidirectional requirements under the World Wide Web Consortium (“W3C”). He received his Bachelor Degree in Mathematics and Computer Science from the Hebrew University.
Ezra Laniado, age 39, is a director. He has served as a Director for RYVL since February 2021 and has, since 2018, been Executive Director of the San Diego chapter of Friends of Israel Defence Forces and, since 2017, been Regional Director of the San Diego chapter of the Israeli-American Council, two American charitable organizations providing support and funds for Israel and the Israeli community in America. In such capacity, Laniado has raised over $5 million in donations and managed over 30 volunteers. From 2014 to 2017, Laniado was Co-Founder and Business Director of Shonglulu Group, a fashion brand. As Business Director, Laniado raised capital, coordinated the company’s marketing strategy, and implemented its business plan. Prior to 2014, Laniado was an attorney in Israel for 4 years. Laniado received a B.A. and an L.L.B. from the Interdisciplinary Center Herzliya.
Genevieve Baer, age 45, is a director. She has served as a Director for RVYL since February 2021 and has been chief executive officer of JKH Consulting since 2009. JKH Consulting is a real estate finance consulting firm that has advised on transactions with a collective value of over $10 billion. Prior to her work with JKH Consulting, Baer worked at Magnet Industrial Bank for 6 years at the end of which tenure she was a Senior Vice President. Baer also worked at US Bancorp Piper Jaffray for 9 years as a Vice President working on equity and debt real estate financings. Baer earned a B.S. in chemistry from the University of Utah.
Item 6. Exhibits.
| Incorporated by reference | ||||||||||||
| Exhibit | Exhibit Description | Filed herewith | Form | Period ending | Exhibit | Filing date | ||||||
| 31.1 | Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | X | ||||||||||
| 32.1 | Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | X | ||||||||||
| 101.INS | Inline XBRL Instance Document | X | ||||||||||
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | X | ||||||||||
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | X | ||||||||||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | X | ||||||||||
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | X | ||||||||||
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | X | ||||||||||
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | X | ||||||||||
13
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
| LOGICQUEST TECHNOLOGY, INC. | |
| /s/ Ben Errez | |
| By: Ben Errez | |
| Its: Director, Chief Executive Officer, and | |
| Principal Accounting Officer | |
| Date: May 22, 2023 |
14
Exhibit 31.1
LOGICQUEST
TECHNOLOGY, INC.
OFFICER’S CERTIFICATE PURSUANT TO SECTION 302
I, Ben Errez, certify that:
| 1. | I have reviewed this Form 10-Q of Logicquest Technology, Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | I am the registrant’s principal executive officer and thus am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
| 5. | I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the registrant’s board of directors (or persons performing the equivalent functions): |
| a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information, including but not limited to those identified in Item 4 (Controls and Procedures) in the registrant’s quarterly report on Form 10-Q; and |
| b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Dated: May 22, 2023
| By: | /s/ Ben Errez | |
| Ben Errez | ||
| Chief Executive Officer | ||
| (Principal Executive Officer) | ||
LOGICQUEST TECHNOLOGY, INC.
OFFICER’S CERTIFICATE PURSUANT TO SECTION 302
I, Ben Errez, certify that:
| 1. | I have reviewed this Form 10-Q of Logicquest Technology, Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | I am the registrant’s principal financial officer and am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
| 5. | I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the registrant’s board of directors (or persons performing the equivalent functions): |
| a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information in the registrant’s quarterly report on Form 10-Q; and |
| b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Dated: May 22, 2023
| By: | /s/ Ben Errez | |
| Ben Errez | ||
| Chief Financial Officer | ||
| (Principal Financial Officer) |
Exhibit 32.1
LOGICQUEST TECHNOLOGY, INC.
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF
THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Logicquest Technology, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Ben Errez, Principal Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
| (1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| (2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
A signed original of this written statement required by Section 906 has been provided to Ben Errez and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
Dated: May 22, 2023
| By: | /s/ Ben Errez | |
| Ben Errez | ||
| Chief Executive Officer | ||
| (Principal Executive Officer) |
LOGICQUEST TECHNOLOGY, INC.
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF
THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Logicquest Technology, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Ben Errez, Principal Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
| (1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| (2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
| (3) | A signed original of this written statement required by Section 906 has been provided to Ben Errez and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request. |
Dated: May 22, 2023
| By: | /s/ Ben Errez | |
| Ben Errez | ||
| Chief Financial Officer | ||
| (Principal Financial Officer) |
Statements of Operations (Unaudited) - USD ($) |
3 Months Ended | |
|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
| Operating expenses | ||
| General and administrative expenses | $ 25,966 | $ 19,924 |
| Stock compensation expense | 249,654 | |
| Loss from operations | (275,620) | (19,924) |
| Interest expense | (79,473) | |
| Net loss | $ (275,620) | $ (99,397) |
| Net loss per share – basic (in Dollars per share) | $ (0.01) | $ (0.04) |
| Basic weighted average shares outstanding (in Shares) | 40,581,181 | 2,301,968 |
Statements of Operations (Unaudited) (Parentheticals) - $ / shares |
3 Months Ended | |
|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
| Income Statement [Abstract] | ||
| Net loss per share – diluted | $ (0.01) | $ (0.04) |
| Diluted weighted average shares outstanding | 40,581,181 | 2,301,968 |
Statements of Changes in Stockholders’ Deficit (Unaudited) - USD ($) |
Series C
Preferred Stock
|
Series D
Preferred Stock
|
Common Stock |
Additional Paid-in Capital |
Accumulated Deficit |
Total |
|---|---|---|---|---|---|---|
| Balance at Dec. 31, 2021 | $ 2,302 | $ 22,487,937 | $ (29,002,430) | $ (6,512,191) | ||
| Balance (in Shares) at Dec. 31, 2021 | 48 | 10 | 2,301,968 | |||
| Net loss | (99,397) | (99,397) | ||||
| Balance at Mar. 31, 2022 | $ 2,302 | 22,487,937 | (29,101,827) | (6,611,588) | ||
| Balance (in Shares) at Mar. 31, 2022 | 48 | 10 | 2,301,968 | |||
| Balance at Dec. 31, 2022 | $ 2,302 | 29,198,773 | (29,229,526) | (28,451) | ||
| Balance (in Shares) at Dec. 31, 2022 | 48 | 10 | 2,301,968 | |||
| Net loss | (275,620) | (275,620) | ||||
| Issue of Common Stock | $ 98,000 | 151,654 | 249,654 | |||
| Issue of Common Stock (in Shares) | 98,000,000 | |||||
| Balance at Mar. 31, 2023 | $ 100,302 | $ 29,350,427 | $ (29,505,146) | $ (54,417) | ||
| Balance (in Shares) at Mar. 31, 2023 | 48 | 10 | 100,301,968 |
Statements of Cash Flows (Unaudited) - USD ($) |
3 Months Ended | |
|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
| Cash flows from operating activities: | ||
| Net loss | $ (275,620) | $ (99,397) |
| Adjustments to reconcile net loss to net cash used in operating activities: | ||
| Stock compensation expense | 249,654 | |
| Changes in operating assets and liabilities: | ||
| Prepaid expenses and other current assets | 980 | |
| Accrued liabilities | 25,966 | 98,417 |
| Net cash used in operating activities | ||
| Net decrease in cash and cash equivalents | ||
| Cash and cash equivalents at beginning of period | ||
| Cash and cash equivalents at end of period | ||
| Supplemental disclosure of cash flows Information: | ||
| Cash paid for interest | ||
| Cash paid for income taxes | ||
| Non-cash transactions: | ||
| Operating expenses directly paid by a related party | $ 22,685 | |
Organization and Summary of Significant Accounting Policies |
3 Months Ended |
|---|---|
Mar. 31, 2023 | |
| Accounting Policies [Abstract] | |
| ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Logicquest Technology, Inc. (“we”, “our”, the “Company” or “Logicquest”) is a Nevada Corporation that previously consisted of the networking service (carrier/circuit) business. It provided internet connectivity to corporate clients on a subscription basis; essentially operating as a value-added provider until it ceased operations effective June 30, 2014.
The Company was originally incorporated as Solis Communications, Inc. on July 23, 2001 and adopted a name change to Crescent Communications Inc. upon completion of a reverse acquisition of Berens Industries, Inc. In 2004, we changed our name to Bluegate Corporation (“Bluegate”). On March 19, 2015, the Company changed its name to Logicquest Technology, Inc. (“Logicquest”).
The Company currently has no operations and the Company’s Board of Directors is currently seeking investment opportunities.
Following is a summary of the Company’s significant accounting policies:
BASIS OF PRESENTATION
The accompanying unaudited interim financial statements of the Company, have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and the rules of the Securities and Exchange Commission, and should be read in conjunction with the audited financial statements and notes thereto contained in Logicquest’s Annual Report filed with the SEC on Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year.
SIGNIFICANT ESTIMATES
The preparation of financial statements in conformity with U.S. GAAP 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 dates of the financial statements and the reported amounts of revenues and expenses during the periods. The extent to which the COVID-19 pandemic may directly or indirectly impact our business, financial condition, and results of operations is highly uncertain and subject to change. We considered the potential impact of the COVID-19 pandemic on our estimates and assumptions and there was not a material impact to our financial statements as of March 31, 2023 and December 31, 2022, and for the three months ended March 31, 2023 and 2022. Actual results could differ from estimates making it reasonably possible that a change in the estimates could occur in the near term.
RELATED PARTY TRANSACTIONS
A related party is generally defined as (i) any person that holds 10% or more of the Company’s securities and their immediate families, (ii) the Company’s management, (iii) someone that directly or indirectly controls, is controlled by or is under common control with the Company, or (iv) anyone who can significantly influence the financial and operating decisions of the Company. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties.
FAIR VALUE OF FINANCIAL INSTRUMENTS
For certain of the Company’s financial instruments, including prepaid expenses and accrued liabilities, the carrying amounts approximate fair values due to their short maturities.
Transactions involving related parties cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive, free-market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm’s-length transactions unless such representations can be substantiated.
It is not, however, practical to determine the fair value of amounts due to related parties and lease and management arrangement with related parties, if any, due to their related party nature.
INCOME TAXES
The Company uses the liability method of accounting for income taxes. Under this method, deferred income taxes are recorded to reflect the tax consequences on future years of temporary differences between the tax basis of assets and liabilities and their financial amounts at year-end. The Company provides a valuation allowance to reduce deferred tax assets to their net realizable value.
The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not 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 financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon settlement.
LOSS PER SHARE
Basic and diluted net loss per share is computed on the basis of the weighted average number of shares of common stock outstanding during each period. The Company does not have any potentially dilutive instruments for the three months ended March 31, 2023 and 2022. Accordingly, basic and diluted losses per share were identical for the three months ended March 31, 2023 and 2022.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
All new accounting pronouncements issued but not yet effective or adopted have been deemed not to be relevant to us, hence are not expected to have any impact once adopted. |
Going Concern Considerations |
3 Months Ended | ||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||
| Going Concern Considerations [Abstract] | |||||||||||||||||||||||||||||||||||||
| GOING CONCERN CONSIDERATIONS | 2. GOING CONCERN CONSIDERATIONS
During the three months ended March 31, 2023 and 2022, and as of March 31, 2023 and December 31, 2022, we have been unable to generate cash flows sufficient to support our operations and have been dependent on debt raised from a related party. We experienced negative financial results as follows:
These factors raise substantial doubt about our ability to continue as a going concern. The financial statements contained herein do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should we be unable to continue in existence. Our ability to continue as a going concern is dependent upon our ability to generate sufficient cash flows to meet our obligations on a timely basis, to obtain additional financing as may be required, and ultimately to attain profitable operations. However, there is no assurance that profitable operations or sufficient cash flows will occur in the future.
Our current operations are primarily funded by Logicquest Technology Limited, a company controlled by the Company’s Chief Financial Officer, Mr. Cheng Yew Siong. |
||||||||||||||||||||||||||||||||||||
Accrued Liabilities |
3 Months Ended | |||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2023 | ||||||||||||||||||||||||||||
| Accrued Liabilities [Abstract] | ||||||||||||||||||||||||||||
| ACCRUED LIABILITIES | 3. ACCRUED LIABILITIES
The accrued liabilities are summarized below:
As of March 31, 2023 and December 31, 2022, accrued liabilities was mainly consists of unpaid professional fee. |
|||||||||||||||||||||||||||
Income Taxes |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||
| Income Taxes [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
| INCOME TAXES | 4. INCOME TAXES
On December 22, 2017 U.S. tax reform legislation known as the Tax Cuts and Jobs Act (the “2017 Act”) was signed into law. The 2017 Act made substantial changes to U.S. tax law, including a reduction in the corporate tax rate from 34% to 21%, a limitation on deductibility of interest expense, a limitation on the use of net operating losses to offset future taxable income, the allowance of immediate expensing of capital expenditures, deemed repatriation of foreign earnings through a transition tax and significant changes to the taxation of foreign earnings going forward. As a result of the 2017 Act, NOL carryforwards generated in years beginning after December 31, 2017 would carryforward indefinitely, and would apply to 80% of future taxable income. Under the Act, carrybacks of NOLs were disallowed. In March 2021, the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act was enacted providing a five-year carryback for losses incurred in 2018, 2019, 2020 or 2021, which allows companies to modify tax returns up to five years prior to offset taxable income from those tax years. The CARES Act also suspended the NOL limit of 80% of taxable income, but the NOLs generated in 2018 and forward will still carryforward indefinitely.
The composition of deferred tax assets at March 31, 2023 and December 31, 2022 were as follows:
The difference between the income tax benefit in the accompanying statement of operations and the amount that would result if the U.S. Federal statutory rate of 21% were applied to pre-tax loss for 2023 and 2022, is attributable to the valuation allowance.
At March 31, 2022, for federal income tax reporting purposes, the Company has $9,134,775 in unused net operating losses available for carryforward to future years which will expire in various years through 2037, and $2,029,044 that will carryforward indefinitely. |
|||||||||||||||||||||||||||||||||||||||||||||
Shareholders' Equity |
3 Months Ended |
|---|---|
Mar. 31, 2023 | |
| Stockholders' Equity Note [Abstract] | |
| SHAREHOLDERS’ EQUITY | 5. SHAREHOLDERS’ EQUITY
On February 24, 2023, the Board of Directors agreed to issue 98,000,000 shares of the Company’s to Ang Woon Han (the major shareholder and senior officer of the Company) to serve as the Company’s director. The fair value of the shares issued to Ang Woon Han was $249,654. |
Commitments and Contingencies |
3 Months Ended |
|---|---|
Mar. 31, 2023 | |
| Commitments and Contingencies [Abstract] | |
| COMMITMENTS AND CONTINGENCIES | 6. COMMITMENTS AND CONTINGENCIES
On May 27, 2016, the Company entered into an agreement for the lease of a virtual office in Princeton, NJ for monthly rental of $200. The lease began on May 12, 2016 on monthly basis and can be cancelled at either party’s discretion with a three-month notice. |
Subsequent Events |
3 Months Ended |
|---|---|
Mar. 31, 2023 | |
| Subsequent Events [Abstract] | |
| SUBSEQUENT EVENTS | 7. SUBSEQUENT EVENTS
The Company follows the guidance in FASB ASC 855-10 for the disclosure of subsequent events. The Company evaluated subsequent events through the date the financial statements were issued and determined the Company has the following material subsequent event that needs to be disclosed:
Effective on April 7, 2023, the selling shareholder of the Company, who owns 97.7% equity ownership of the Company and also holds a control position in the Company sold all of his equity interest in the Company (consisting of 99,457,724 shares of restricted common stock, 48 shares of Series C convertible non-redeemable preferred stock and 10 shares of Series D convertible non-redeemable preferred stock) to RYVYL, Inc. for a total purchase price of $225,000.
After giving effect to the purchases, RYVYL, Inc. became the major and controlling shareholder of the Company. |
Accounting Policies, by Policy (Policies) |
3 Months Ended |
|---|---|
Mar. 31, 2023 | |
| Accounting Policies [Abstract] | |
| BASIS OF PRESENTATION | BASIS OF PRESENTATION
The accompanying unaudited interim financial statements of the Company, have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and the rules of the Securities and Exchange Commission, and should be read in conjunction with the audited financial statements and notes thereto contained in Logicquest’s Annual Report filed with the SEC on Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year.
|
| SIGNIFICANT ESTIMATES | SIGNIFICANT ESTIMATES
The preparation of financial statements in conformity with U.S. GAAP 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 dates of the financial statements and the reported amounts of revenues and expenses during the periods. The extent to which the COVID-19 pandemic may directly or indirectly impact our business, financial condition, and results of operations is highly uncertain and subject to change. We considered the potential impact of the COVID-19 pandemic on our estimates and assumptions and there was not a material impact to our financial statements as of March 31, 2023 and December 31, 2022, and for the three months ended March 31, 2023 and 2022. Actual results could differ from estimates making it reasonably possible that a change in the estimates could occur in the near term.
|
| RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS
A related party is generally defined as (i) any person that holds 10% or more of the Company’s securities and their immediate families, (ii) the Company’s management, (iii) someone that directly or indirectly controls, is controlled by or is under common control with the Company, or (iv) anyone who can significantly influence the financial and operating decisions of the Company. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties.
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| FAIR VALUE OF FINANCIAL INSTRUMENTS | FAIR VALUE OF FINANCIAL INSTRUMENTS
For certain of the Company’s financial instruments, including prepaid expenses and accrued liabilities, the carrying amounts approximate fair values due to their short maturities.
Transactions involving related parties cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive, free-market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm’s-length transactions unless such representations can be substantiated.
It is not, however, practical to determine the fair value of amounts due to related parties and lease and management arrangement with related parties, if any, due to their related party nature.
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| INCOME TAXES | INCOME TAXES
The Company uses the liability method of accounting for income taxes. Under this method, deferred income taxes are recorded to reflect the tax consequences on future years of temporary differences between the tax basis of assets and liabilities and their financial amounts at year-end. The Company provides a valuation allowance to reduce deferred tax assets to their net realizable value.
The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not 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 financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon settlement.
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| LOSS PER SHARE | LOSS PER SHARE
Basic and diluted net loss per share is computed on the basis of the weighted average number of shares of common stock outstanding during each period. The Company does not have any potentially dilutive instruments for the three months ended March 31, 2023 and 2022. Accordingly, basic and diluted losses per share were identical for the three months ended March 31, 2023 and 2022.
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| RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
All new accounting pronouncements issued but not yet effective or adopted have been deemed not to be relevant to us, hence are not expected to have any impact once adopted. |
Going Concern Considerations (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||
| Going Concern Considerations [Abstract] | |||||||||||||||||||||||||||||||||||||
| Schedule of Financial Results |
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Accrued Liabilities (Tables) |
3 Months Ended | |||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2023 | ||||||||||||||||||||||||||||
| Accrued Liabilities [Abstract] | ||||||||||||||||||||||||||||
| Schedule of accrued liabilities |
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Income Taxes (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||
| Income Taxes [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of deferred tax asset |
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Organization and Summary of Significant Accounting Policies (Details) |
3 Months Ended |
|---|---|
Mar. 31, 2023 | |
| Accounting Policies [Abstract] | |
| Percentage of related party | 10.00% |
| Percentage of tax benefits | 50.00% |
Going Concern Considerations (Details) - Schedule of Financial Results - USD ($) |
3 Months Ended | 12 Months Ended |
|---|---|---|
Mar. 31, 2023 |
Dec. 31, 2022 |
|
| Schedule of Financial Results [Abstract] | ||
| Net loss | $ (275,620) | $ (99,397) |
| Negative working capital | (54,417) | (28,451) |
| Stockholders’ deficit | $ (54,417) | $ (28,451) |
Accrued Liabilities (Details) - Schedule of accrued liabilities - USD ($) |
3 Months Ended | 12 Months Ended |
|---|---|---|
Mar. 31, 2023 |
Dec. 31, 2022 |
|
| Schedule of Accrued Liabilities [Abstract] | ||
| Accrued general and administrative expenses | $ 54,928 | $ 28,962 |
| Accrued liabilities | $ 54,928 | $ 28,962 |
Income Taxes (Details) - USD ($) |
3 Months Ended | ||
|---|---|---|---|
Mar. 31, 2021 |
Mar. 31, 2022 |
Mar. 31, 2023 |
|
| Income Taxes (Details) [Line Items] | |||
| Taxable income percentage | 80.00% | ||
| Offset taxable income | 5 years | ||
| pre-tax loss percentage | 21.00% | 21.00% | |
| Federal income tax (in Dollars) | $ 9,134,775 | ||
| Carryforward amount (in Dollars) | $ 2,029,044 | ||
| Minimum [Member] | |||
| Income Taxes (Details) [Line Items] | |||
| Corporate tax rate | 34.00% | ||
| Maximum [Member] | |||
| Income Taxes (Details) [Line Items] | |||
| Corporate tax rate | 21.00% | ||
| NOL limit [Member] | |||
| Income Taxes (Details) [Line Items] | |||
| Taxable income percentage | 80.00% |
Income Taxes (Details) - Schedule of deferred tax asset - USD ($) |
Mar. 31, 2023 |
Dec. 31, 2022 |
|---|---|---|
| Schedule of deferred tax assetd [Abstract] | ||
| Benefit from carryforward of net operating loss | $ 2,334,641 | $ 2,333,496 |
| Less valuation allowance | (2,334,641) | (2,333,496) |
| Net deferred tax asset |
Shareholders' Equity (Details) - Ang Woon Han [Member] - USD ($) |
3 Months Ended | |
|---|---|---|
Mar. 31, 2023 |
Feb. 24, 2023 |
|
| Shareholders' Equity (Details) [Line Items] | ||
| Shares issued | 98,000,000 | |
| Fair value amount | $ 249,654 |
Commitments and Contingencies (Details) |
1 Months Ended |
|---|---|
|
May 27, 2016
USD ($)
| |
| Commitments and Contingencies Disclosure [Abstract] | |
| Monthly rent expense for virtual office | $ 200 |
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