UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

  

(Mark One)

x  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended June 30, 2014 

or

 

¨  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from ______to______.

 

Commission File Number: 333-170118

 

LICONT, CORP.

(Exact name of registrant as specified in its charter)

 

Nevada		72-1621890
(State or other jurisdiction of incorporation or organization)		(I.R.S Employer Identification No.)

 

316 California Avenue, #89

Reno, Nevada 89509

(Address of principal executive offices) (Zip Code)

  

919-933-2720

(Registrant’s telephone number, including area code)

 

n/a

(Former name, former address and former fiscal year, if changed since last report)

 

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 issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x     No ¨

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x    No ¨

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company filer.  See definition of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large Accelerated Filer ¨	Accelerated Filer ¨
Non-Accelerated Filer ¨ (Do not check if a smaller reporting company)	Smaller Reporting Company x

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes   x   No ¨

 

As of August 12, 2014, there were approximately 2,660,000 shares of the registrant’s common stock outstanding.  

 

 

LICONT CORP.

 

FORM 10-Q

 

June 30, 2014

 

INDEX

 

PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements		3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		4
Item 3	Quantitative and Qualitative Disclosures About Market Risk		6
Item 4	Control and Procedures		6
PART II - OTHER INFORMATION
Item 1	Legal Proceedings		6
Item 1A	Risk Factors		6
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		7
Item 3.	Defaults Upon Senior Securities		7
Item 4.	Mine Safety Disclosures		7
Item 5.	Other Information		7
Item 6.	Exhibits		8
SIGNATURES			8

 

 

PART I - FINANCIAL INFORMATION

 

Item 1.  Financial Statements. 

 

LICONT, CORP.

(A Development Stage Enterprise)

Table of Contents

Unaudited

 

Balance Sheets:
June 30, 2014 and September 30, 2013 (restated)		F-1
Statements of Operations:
For the three and nine months ended June 30, 2014 and 2013 and for the period
from Inception May 2, 2011 to June 30, 2014		F-2
Statements of Cash Flows:
For the nine months ended June 30, 2014 and 2013 and for the period
from Inception May 2, 2011 to June 30, 2014		F-3
Notes to Financial Statements:
June 30, 2014		F-4

 

 

 

 

LICONT, CORP.

(A Development Stage Enterprise)

Balance Sheets

  

		Unaudited				Audited
		June 30,				September 30,
		2014				2013
						(restated)
ASSETS
Current assets:
Cash		$	132,982			$	2,162
Total current assets			132,982				2,162
Other assets
			-				-
Total other assets			-				-
Total assets		$	132,982			$	2,162
LIABILITIES
Current liabilities:
Accounts payable and accrued expenses		$	20,612			$	4,500
Notes payable			173,600				108,121
Accrued rent, related party			1,000				4,500
Accrued expenses, related party			-				6,466
Total current liabilities			195,212				123,587
Total liabilities			195,212				123,587
STOCKHOLDERS' DEFICIT
Common stock, $.001 par value, 75,000,000 authorized,
2,710,000 and 2,640,000 shares issued and outstanding			2,710				2,640
Capital in excess of par value			470,590				208,160
Deficit accumulated during the development stage			(535,530	)			(332,225	)
Total stockholders' equity			(62,230	)			(121,425	)
Total liabilities and stockholders' deficit		$	132,982			$	2,162

  

The accompanying notes are an integral part of these statements.

 

 

LICONT, CORP.

(A Development Stage Enterprise)

Statements of Operations

Unaudited

 

																		(restated)  Cumulative,
																		Inception,
		Three months				Three months				Nine months				Nine months				May 2,
		ended				ended				ended				ended				2011 through
		June 30,				June 30,				June 30,				June 30,				June 30,
		2014				2013				2014				2013				2014
Revenue		$	-			$	-			$	-			$	-			$	-
Operating expenses
General and administrative			54,115				109,253				181,664				221,418				506,457
Total operating expenses			54,115				109,253				181,664				221,418				506,457
(Loss) from operations			(54,115	)			(109,253	)			(181,664	)			(221,418	)			(506,457	)
Other income/(expense)			(13,828	)			(2,322	)			(21,641	)			(5,235	)			(29,073	)
			(67,943	)			(111,575	)			(203,305	)			(226,653	)			(535,530	)
Provision/(credit) for taxes on income			-				-				-				-				-
Net Income/(loss)		$	(67,943	)		$	(111,575	)		$	(203,305	)		$	(226,653	)		$	(535,530	)
Basic earnings/(loss) per common share		$	(0.03	)		$	(0.04	)		$	(0.08	)		$	(0.09	)
Weighted average number of shares outstanding			2,678,333				2,640,000				2,678,333				2,640,000

 

The accompanying notes are an integral part of these statements.

 

 

LICONT, CORP.

(A Development Stage Enterprise)

Statements of Cash Flows

Unaudited

 

										(Restated)
										Cumulative,
										Inception,
		Nine months				Nine months				May 2,
		Ended				Ended				2011 through
		June 30,				June 30,				June 30,
		2014				2013				2014
Cash flows from operating activities:
Net income (loss)		$	(203,305	)		$	(226,653	)		$	(535,530	)
Adjustments to reconcile net (loss) to cash
provided (used) by developmental stage activities:
Interest expense			6,541								10,919
Amortization of note discount			13,600								13,600
Change in current assets and liabilities:
Other receivables							7,566				(63	)
Accounts payable and accrued expenses			1,450				13,250				9,756
Net cash flows from operating activities			(181,714	)			(205,837	)			(501,318	)
Cash flows from investing activities:
Net cash flows from investing activities			-				-				-
Cash flows from financing activities:
Proceeds from sale of common stock			262,500				187,500				473,300
Proceeds from note payable			60,000				55,833				160,000
Related party transaction			(9,966	)			3,000				1,000
Net cash flows from financing activities			312,534				246,333				634,300
Net cash flows			130,820				40,496				132,982
Cash and equivalents, beginning of period			2,162				38,973				-
Cash and equivalents, end of period		$	132,982			$	79,469			$	132,982
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS FOR:
Interest		$	-			$	-			$	-
Income taxes		$	-			$	-			$	-
SUPPLEMENTAL DISCLOSURE OF
NON-CASH FINANCING AND INVESTING:
Foregiveness of debt		$	-			$	-				7,779

 

The accompanying notes are an integral part of these statements.

 

 

 

LICONT, CORP.

 (A DEVELOPMENT STAGE ENTERPRISE)

NOTES TO FINANCIAL STATEMENTS

June 30, 2014 

 

Note 1 - Summary of Significant Accounting Policies:

 

General Organization and Business

Licont, Corp. (“the Company”) was incorporated under the laws of the State of Nevada, U.S. on May 2, 2011. The Company is in the development stage as defined under Accounting Codification Standard, Development Stage Entities (“FASB ASC-915”). The Company has not generated any revenue to date and consequently its operations are subject to all risks inherent in the establishment of a new business.

 

Licont Corp. is currently developing a multidisciplinary preferred provider network in an attempt to offer contracting auto insurance carriers significant savings in the medical treatment and management of accident patients. Licont Corp. is a personal injury preferred provider network and is looking to be the first managed medical solution provider specifically tailored to personal injury medical risk management.

 

Basis of presentation

The accompanying financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America, and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) and reflect all adjustments, consisting of normal recurring adjustments, which management believes are necessary to fairly present the financial position, results of operations and cash flows of the Company as of and for the period ending June 30, 2014 and year ending September 30, 2013 and for the period May 2, 2011 (inception) through June 30, 2014.

 

Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

Cash and cash equivalents

The Company maintains a cash balance in a non-interest-bearing account that currently does not exceed federally insured limits. For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents. There were no cash equivalents as of and for the period ending June 30, 2014 and year ending September 30, 2013.

 

Fair value of financial instruments and derivative financial instruments

The Company’s financial instruments include cash, accounts payable, and notes payable. All instruments are accounted for on a historical cost basis, which, due to the short maturity of these financial instruments, approximates fair value at June 30, 2014 and September 30, 2013. The Company did not engage in any transaction involving derivative instruments.

 

Federal income taxes

Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. The Company has adopted FASB Accounting Standards Codification 740.10.05 “Accounting for Income Taxes” as of its inception. Pursuant to FASB Accounting Standards Codification 740.10.05, the Company is required to compute tax asset benefits for net operating losses carried forward. Potential benefits of net operating losses have not been recognized in these financial statements because the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward to future years.

 

 

Net income per share of common stock

Net loss per share is provided in accordance with FASB ASC 260-10, “Earnings per Share”. Basic net loss per common share ("EPS") is computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted earnings per share is computed by dividing net income by the weighted average shares outstanding, assuming all dilutive potential common shares were issued, unless doing so is anti-dilutive.

 

Common Stock Registration Expenses

The Company considers incremental costs and expenses related to the registration of equity securities with the SEC, whether by contractual arrangement as of a certain date or by demand, to be unrelated to original issuance transactions.  As such, subsequent registration costs and expenses are reflected in the accompanying financial statements as general and administrative expenses, and are expensed as incurred.

 

Recently Issued Accounting Pronouncements:

As of and for the period ending June 30, 2014 and year ending September 30, 2013, the Company does not expect any of the recently issued accounting pronouncements to have a material impact on its financial condition or results of operations.

 

Note 2 - Uncertainty, going concern:

The Company’s financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs to allow it to continue as a going concern. As of June 30, 2014, the Company had an accumulated deficit of $535,530. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.

 

In order to continue as a going concern, the Company will need, among other things, additional capital resources. The Company is contemplating conducting an offering of its debt or equity securities to obtain additional operating capital. The Company is dependent upon its ability, and will continue to attempt, to secure equity and/or debt financing. There are no assurances that the Company will be successful and without sufficient financing it would be unlikely for the Company to continue as a going concern.

 

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and 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.

 

Note 3 – Notes Payable:

On September 20, 2012, The Company entered into a Convertible Promissory Note with Amalfi Coast Capital, Inc. The Company has received $50,000 with a stated rate of 8% and due on April 20, 2013. This note has matured and continues to earn interest at 8%. Amalfi Coast Capital has determined that the stock may go up more than the conversion rate of $3.75 and is satisfied with earning interest until a conversion price is at an acceptable level. The balance of the accrued interest as of June 30, 2014 was $7,560 and $3,500 on June 30, 2013.

 

On December 13, 2012, The Company entered into a Convertible Promissory Note with Amalfi Coast Capital, Inc. The Company has received $50,000 with a stated rate of 8% and due on June 13, 2013. This note has matured and continues to earn interest at 8%. Amalfi Coast Capital has determined that the stock may go up more than the conversion rate of $3.75 and is satisfied with earning interest until a conversion price is at an acceptable level. The balance of the accrued interest as of June 30, 2014 was $6,562 and $2,501 on June 30, 2013.

 

On February 28, 2014, The Company entered into a Convertible Promissory Note with Amalfi Coast Capital, Inc. The Company has received $60,000 with a stated rate of 8% and due on February 28, 2015. This note has conversion feature that allows the lender to convert this note at a rate of $3.75 per share. The Company has recorded a beneficial conversion feature of $40,800. During the period ending June 30, 2014, the Company has amortized $13,600 of note discount and has accrued $2,040 in interest expense.

 

The balance of these notes, including accrued interest, net of discount as of June 30, 2014 was $173,600.

 

Note 4 - Common Stock:

 

On May 27, 2011 the Company issued 1,500,000 shares of common stock at a price of $0.001 per share for total cash proceeds of $1,500.

 

During the year ended September 30, 2011 the Company issued 1,090,000 shares for $21,800 and 2,590,000 shares of common stock issued and outstanding.

 

During the year ended September 30, 2012 the Company had 2,590,000 shares of common stock issued and outstanding.

 

On February 26, 2013, The Company issued 50,000 share of common stock at a price of $3.75 per share for total cash proceeds of $187,500.

 

On October 18, 2013, the Company issued 20,000 shares of common stock at a price of $3.75 per share for total cash proceeds of $75,000.

 

On April 12, 2014, the Company issued 50,000 shares of common stock at a price of $3.75 per share for total cash proceeds of $187,500.

 

As of June 30, 2014, The Company had 2,710,000 share of common stock issued and outstanding.

 

Note 5 – Consulting Agreement, Related Party:

The Company has an informal agreement with its officer to pay them a monthly consulting fee of $10,000. The agreement started on January 1, 2013 at $8,500 per month and modified April 1, 2014 to $10,000 per month. The Company is current on all payments.

 

Note 6 - Income Taxes:

The provision (benefit) for income taxes for the years ended September 30, 2013 and 2012 were as follows:

 

		Year Ended September 30,
		2013				2012
Current Tax Provision:
Federal-
Taxable income		$	-			$	-
Total current tax provision		$	-			$	-
Deferred Tax Provision:
Federal-
Loss carryforwards		$	102,188			$	10,208
Change in valuation allowance			(102,188	)			(10,208	)
Total deferred tax provision		$	-			$	-

 

The Company had deferred income tax assets as of September 30, 2013 and 2012 were as follows:

 

		September 30,
		2013				2012
Loss carryforwards		$	102,188			$	10,208
Less - Valuation allowance			(102,188	)			(10,208	)
Total net deferred tax assets		$	-			$	-

 

The Company provided a valuation allowance equal to the deferred income tax assets for the years ended September 30, 2013 and 2012 because it is not presently known whether future taxable income will be sufficient to utilize the loss carryforwards.

 

As of September 30, 2013 and 2012, the Company had approximately $332,225 and $30,025, respectively, in tax loss carryforwards that can be utilized in future periods to reduce taxable income, and will begin to expire in the year 2037. Due to a change in control (see note 6) the Company may lose its associated tax attributes.

 

 

Note 7 – Change in Control:

On August 31, 2012, Andro Gvichiya and Dr. Trevor Robertson entered into and closed a stock purchase agreement, whereby the Dr. Trevor purchased 1,500,000 shares of common stock from Andro Gvichiya, par value $0.001 per share, representing approximately 57.91% of the issued and outstanding shares of the Company, for an aggregate purchase price of $150,000. Prior to the closing of the Stock Purchase Agreement, Andro Gvichiya was the President, Chief Executive Officer, Chief Financial Officer, sole director, and majority shareholder.

 

Andro Gvichiya submitted to the Company a resignation letter pursuant to which he resigned from his position as director of the Company. In addition, Mr. Gvichiya resigned from his position as President, Chief Executive Officer, and Chief Financial Officer of the Company.

  

Note 8 – Leases, Related Party:

The company currently leases on a month to month basis space from a related party. The monthly lease amount is $500 per month. The balance of this accrued rent was $1,000 as of June 30, 2014.

 

Note 9 – Subsequent Events:

In accordance with SFAS 165 (FASB ASC 855-10) management has reviewed events from June 30, 2014 to the date the financial statements were issued, August 5, 2014, and has determined that it does not have any material subsequent events to disclose in these financial statements.

 

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operation.

 

Overview

 

We were incorporated under the laws of Nevada on May 2, 2011. From inception until the closing of the Stock Purchase Agreement on August 31, 2012, we sought to develop mobile applications for handheld mobile devices. Prior to the Change of Control, we had not generated any revenue and our operations were limited to capital formation, organization and development of our business plan.  As a result of the Change of Control, we ceased our prior operations and are now engaging in the administration of a PI-PPO network.

 

Change of Control

 

On August 31, 2012, we completed the Change of Control, whereby Trevor Robertson acquired 1,500,000 shares outstanding capital stock of Licont, Corp in exchange for $150,000.

 

In connection with the Change of Control, Andro Gvichiya resigned as the sole member of our board of directors and chief executive officer of the Company, effective upon the closing of the Change of Control.  Also effective upon closing of the Change of Control, Trevor Robertson was appointed to fill the vacancy on our Board of Directors created by the resignation of Andro Gvichiya.  In addition, Dr. Robertson was appointed as our President, Chief Executive Officer, Chief Financial Officer and Secretary, all effective upon the closing of the Change of Control.

  

Plan of Operation

 

Our plan is to build a regional multi-disciplinary provider network that can contract with personal injury insurance carriers on a local level throughout the United States. We intend to initially offer our network savings on a contracted cost basis with additional opportunities geared towards claims management and review. The initial provider network lease agreement requires minimal infrastructure. Accordingly, we will create an online interactive database of preferred personal injury providers. All claims and processing flow through the insurance carriers’ existing channels with savings coming from contracted provider agreements.

  

Although we currently do not have any contract with personal injury insurance carriers, we believe it is critical to first establish infrastructure for our provider network before attempting to secure any contracts with personal injury carriers.

 

We intend to appoint provider relations specialists, either as employees or independent contractors to attract and enter into contracts with insurance carriers. Initially, we will rely on existing relationships, with local hospitals, facilities, physicians chiropractors, and physical therapists to build out the network with advertising in specialty specific journals and publication in addition to direct marketing campaigns.

 

As of June 30, 2014, Licont is continuing to develop its managed medical solution on both the provider and carrier fronts with growth and development ahead of expectations. Licont’s product has been well received by all parties to date. Our product caters to the $40 billion a year liability claims arena with $20 billion dollar in direct medical payments alone. Moving forward we will require significant additional funding that if raised will allow us to reach our goal of being in revenue by June 2015.

  

Limited Operating History

 

We have not previously demonstrated that we will be able to expand our business. We cannot guarantee that the expansion efforts described in this annual report will be successful. Our business is subject to risks inherent in growing an enterprise, including limited capital resources and possible rejection of our renovation services offering.

 

 

Our independent auditors have issued a going concern opinion that raises substantial doubt about our ability to continue as a going concern. As reflected in the financial statements in this Form 10-Q, we are a development stage company with limited operations. We had a net loss of $467,588 and a loss operations of $452,343 since inception (May 2, 2011) through March 31, 2014.

  

Results of Operation

 

For the three months ended June 30, 2014 and June 30, 2013

 

Revenue: Revenues for the three months ended June 30, 2014 were $0, compared with $0 in three months ended June 30, 2014, reflecting 0% change as the Company is not generating revenue at this time.

 

Total Operating Expenses: Total operating expenses for the three months ended June 30, 2014 were $54,115, compared with $109,253 in three months ended June 30, 2013, reflecting a decrease of $55,138. The decrease in the six months ended June 30, 2014 was primarily attributable to the decrease in marketing and legal and professional fees.

 

Loss from Operations: Loss from operations for the quarter ended June 30, 2014 were $54,115, compared with $109,253 in the quarter ended June 30, 2013, reflecting a decrease of $55,138. The decrease in loss from operations in quarter ended June 30, 2014 was primarily attributable to the decrease in marketing and legal and professional fees.

 

Net loss: We incurred a net loss of $67,943 in quarter ended June 30, 2014 compared to a net loss of $111,575 in the comparable period in 2013. 

 

For the nine months ended June 30, 2014 and June 30, 2013

 

Revenue: Revenues for the nine months ended June 30, 2014 were $0, compared with $0 in for the six months ended June 30, 2013, reflecting 0% change as the Company is not generating revenue at this time.

 

Total Operating Expenses: Total operating expenses for the for the nine months ended June 30, 2014 were $181,664, compared with $221,418 in the nine months ended June 30, 2013, reflecting a decrease of $39,754. The decrease in the nine months ended June 30, 2013 was primarily attributable to a decrease in marketing and legal and professional fees.

 

Loss from Operations: Loss from operations for the nine months ended June 30, 2014 were $181,664, compared with $221,418 for the nine months ended June 30, 2013, reflecting a decrease of $39,754. The decrease in loss from operations for the nine months ended June 30, 2013 was primarily attributable to a decrease in marketing and legal and professional fees.

 

Net loss: We incurred a net loss of $203,305 for the nine months ended June 30, 2014 compared to a net loss of $226,653 in the comparable period in 2013. 

 

Liquidity and Capital Resources

 

We anticipate that depending on market conditions and our plan of operations, we may incur operating losses in the foreseeable future. Therefore, our auditors have raised substantial doubt about our ability to continue as a going concern.

 

As reflected in the accompanying audited financial statements, the Company is in the development stage with limited operations, working capital deficiency, has a net cash flow from operations of ($501,318) from inception and has an accumulated deficit of ($535,530). This raises substantial doubt about its ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company's ability to raise additional capital and implement its business plan. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

 

Recent Accounting Pronouncements

 

In May 2011, the FASB issued guidance to amend certain measurement and disclosure requirements related to fair value measurements to improve consistency with international reporting standards. This guidance is effective prospectively for public entities for interim and annual reporting periods beginning after December 15, 2011, with early adoption by public entities prohibited. The Company is currently evaluating this guidance, but does not expect its adoption will have a material effect on its consolidated financial statements.

 

In June 2011, the FASB issued new guidance on the presentation of comprehensive income that will require a company to present components of net income and other comprehensive income in one continuous statement or in two separate, but consecutive statements. There are no changes to the components that are recognized in net income or other comprehensive income under current GAAP. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2011, with early adoption permitted.  The Company is currently evaluating this guidance, but does not expect its adoption will have a material effect on its consolidated financial statements.

 

 

Off Balance Sheet Transactions

 

None.

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

 

Smaller reporting companies are not required to provide such information.

 

Item 4. Controls and Procedures.

 

Evaluation of Disclosure Controls

 

Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 (“Exchange Act”), the Company carried out an evaluation, with the participation of the Company’s management, including the Company’s Chief Executive Officer (“CEO”) and Principal Financial Officer (“PFO”) (the Company’s principal financial and accounting officer), of the effectiveness of the Company’s disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, the Company’s CEO and PFO concluded that the Company’s disclosure controls and procedures are not effective due to the presence of material weaknesses in internal control over financial reporting.

 

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. Management has identified the following material weaknesses which have caused management to conclude that, as of December 31, 2013, our disclosure controls and procedures were not effective: (i) inadequate segregation of duties and effective risk assessment; and (ii) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of both US GAAP and SEC guidelines.

 

Remediation Plan to Address the Material Weaknesses in Internal Control over Financial Reporting

 

Our company plans to take steps to enhance and improve the design of our internal controls over financial reporting. During the period covered by this quarterly report on Form 10-Q, we have not been able to remediate the material weaknesses identified above. To remediate such weaknesses, we plan to implement the following changes during our fiscal year ending September 30, 2014: (i) appoint additional qualified personnel to address inadequate segregation of duties and ineffective risk management; and (ii) adopt sufficient written policies and procedures for accounting and financial reporting. The remediation efforts set out are largely dependent upon our securing additional financing to cover the costs of implementing the changes required. If we are unsuccessful in securing such funds, remediation efforts may be adversely affected in a material manner.

 

We are unable to remedy our controls related to the inadequate segregation of duties and ineffective risk management until we receive financing to hire additional employees.

 

Changes in internal control over financial reporting

 

There have been no changes in our internal control over financial reporting that occurred during the last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

PART II - OTHER INFORMATION

 

Item 1. Legal Proceedings.

 

We are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

 

Item 1A. Risk Factors.

 

Not applicable because we are a smaller reporting company.

 

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

 

On April 12, 2014, the Company issued 50,000 shares of common stock at a price of $3.75 per share for total cash proceeds of $187,500 to one accredited investor. The securities were offered and sold to the investor in a private placement transaction made in reliance upon exemptions from registration pursuant to Section 4(2) under the Securities Act of 1933, as amended (the “Securities Act”) and/or Rule 506 promulgated under the Securities Act. The investors are accredited investors as defined in Rule 501 of Regulation D promulgated under the Securities Act.

 

Item 3. Defaults Upon Senior Securities.

 

None.

 

Item 4. Mine Safety Disclosures.

 

Not applicable.

  

Item 5. Other Information.

 

None.

 

 

Item 6. Exhibits.

 

Exhibit Number		Exhibit Title
31.1		Certification of Principal Executive Officer and Principal Financial Officer, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1		Certification of Principal Executive Officer and Principal Financial Officer, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS *		XBRL Instance Document
101.SCH *		XBRL Taxonomy Schema
101.CAL *		XBRL Taxonomy Calculation Linkbase
101.DEF *		XBRL Taxonomy Definition Linkbase
101.LAB *		XBRL Taxonomy Label Linkbase
101.PRE *		XBRL Taxonomy Presentation Linkbase

 

In accordance with SEC Release 33-8238, Exhibit 32.1 is being furnished and not filed.

 

* Furnished herewith. XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections. 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

	LICONT CORP.
Date: August 14, 2014	By:	/s/ Trevor Robertson
		Trevor Robertson
		President and  Chief Executive Officer (Duly Authorized Officer, Principal Executive Officer and Principal Financial Officer)