Indicate by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act. [ ] Yes [X] No
Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or 15(d) of the Act: [ ] Yes [X] No
Indicate by check mark whether the registrant(1) has filed all reports required
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 day. [X] Yes [ ] 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 (ss.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). [X] Yes [ ] No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulations S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] 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
State the aggregate market value of the voting and non-voting common equity held
by non-affiliates computed by reference to the price at which the common equity
was last sold, or the average bid and ask price of such common equity, as of the
last business day of the registrant's most recently completed second fiscal
quarter: $569,952 at March 31, 2014.
Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date: 106,626,666 shares of common
stock as of September 30, 2014.
Part III incorporates by reference certain information from the registrant's
definitive proxy statement for the 2014 Annual Meeting of Shareholders.
This Annual Report on Form 10-K contains "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. All statements
other than statements of historical fact are "forward-looking statements" for
purposes of federal and state securities laws, including, but not limited to,
any projections of earnings, revenue or other financial items; any statements of
the plans, strategies and objections of management for future operations; any
statements concerning proposed new services or developments; any statements
regarding future economic conditions or performance; any statements or belief;
and any statements of assumptions underlying any of the foregoing.
Forward-looking statements may include the words "may," "could," "estimate,"
"intend," "continue," "believe," "expect" or "anticipate" or other similar
words. These forward-looking statements present our estimates and assumptions
only as of the date of this report. Except for our ongoing securities laws, we
do not intend, and undertake no obligation, to update any forward-looking
statement. Although we believe that the expectations reflected in any of our
forward-looking statements are reasonable, actual results could differ
materially from those projected or assumed in any or our forward-looking
statements. Our future financial condition and results of operations, as well as
any forward-looking statements, are subject to change and inherent risks and
uncertainties. The factors impacting these risks and uncertainties include, but
are not limited to; increased competitive pressures from existing competitors
and new entrants; our ability to efficiently and effectively finance our
operations; deterioration in general or regional economic conditions; adverse
state or federal legislation or regulation that increases the costs of
compliance; ability to achieve future sales levels or other operating results;
the fact that our accounting policies and methods are fundamental to how we
report our financial condition and results of operations, and they may require
management to make estimates about matters that are inherently uncertain; the
psychic services market; our ability to develop a fully-functioning web portal;
changes in U.S. GAAP or in the legal, regulatory and legislative environments in
the markets in which we operate; inability to efficiently manage our operations;
the inability of management to effectively implement our strategies and business
plans; and the other risks and uncertainties detailed in this report.
Throughout this Annual Report on Form 10-K references to "we", "our", "us",
"PTOP", "the Company", and similar terms refer to Peer to Peer Network.
PART I
ITEM 1 BUSINESS
CORPORATE HISTORY AND BACKGROUND
Peer to Peer Network (OTC:PTOP) hereinafter, ("the Company") was incorporated in
the State of Nevada on May 9, 2007 under the name "Web Wizard, Inc.". On
February 17, 2012 the Company changed its name to "Psychic Friends Network,
Inc." pursuant to an asset purchase agreement executed on January 27, 2012. As
part of this agreement, all of the assets of PFN Holdings were purchased. These
assets are an integral part of the Company's business development and ultimately
the realization of the Company's anticipated cash flows. On August 27, 2014, the
Company changed its name to Peer to Peer Network.
BUSINESS
Peer to Peer Network, http://peer2peernet.com/ is a holding company centered in
the booming Peer-to-Peer Industry. We believe that Peer-to-Peer Networks are
here to stay. By sharing what they already own, instead of buying new, people
are able to save money, make money, and help the environment. At Peer-to
Peer-Network, OUR VISION is to accomplish all three, and we want the whole world
to join us. We like to call it COLLABORATIVE CONSUMPTION.
Our assets include the Psychic Friends Network ("PFN"), and 321Lend, Inc
("321Lend"), and we envision acquiring other properties in the growing Peer to
Peer Industry.
PFN is a marketing and entertainment company that provides on-demand psychic
advice, as well as daily and weekly horoscopes. www.psychicfriendsnetwork.com A
leader in the psychic industry with memorable television/radio marketing and
infomercials generating nearly $1 Billion in revenues. The same management team
who built the iconic "Psychic Friends" brand is working together again; this
time with the clear advantage of the internet, social media, and easier methods
for billing and better communication technology.
321Lend is a peer-to-peer lending platform offering prime consumers in the
United States a fast and efficient way to borrow money at attractive interest
rates. 321Lend also offers accredited investors a robust, transparent platform
for investing in consumer loans.
321LEND
On August 7, 2014, the "Company closed its previously announced merger
("Merger") with 321Lend, Inc. ("321Lend") pursuant to an Agreement and Plan of
Merger dated July 17, 2014 by and among the Company, 321Lend and PFN Sub Inc., a
wholly owned subsidiary of the Company ("Merger Sub"). At the effective time of
the Merger, Merger Sub merged with and into 321Lend, and the Company issued
18,000,000 shares of its common stock to stockholders of 321 Lend ("Merger
Stock"), and Shin Hwang was appointed to the Company's board of directors
("321Lend Director").
Pursuant to the Merger, the Merger Stock and the assets of 321Lend shall be held
in escrow pending 321Lend's ability to raise $500,000 in capital financing on
terms acceptable to the Company's board of directors (including the 321Lend
Director) within 90 days of the effective time of the Merger (the "Capital
Raise"). If the Capital Raise is unsuccessful, the Merger Stock shall be
canceled and returned to treasury, the 321Lend assets shall be returned to its
stockholders, and the 321Lend Director shall resign. On December 3, 2014, the
parties agreed to extend the 90 day deadline for the capital raise by an
additional 90 days, with all other terms of the agreement remaining the same. As
of the date of this filing, the capital raise is not complete.
Upon successful completion of the Capital Raise, (i) the Merger Stock and
321Lend assets shall be released from escrow, (ii) the Company shall issue
warrants to purchase an aggregate of 100,000,000 shares of Company common stock
at a price of $0.02, with a minimum exercise of 1,000,000 shares, a term of 7
years, and cash-only exercise, to the 321Lend stockholders, (iii) the Company
shall take steps to cause its shareholders to approve an increase in the size of
the Company board of directors to five directors, upon which the Company board
4
of directors shall fill the remaining two director vacancies with two
representatives of 321Lend, and (iiii) the Company shall adopt employment
agreements for the Company's Chief Executive Officer Marc Lasky and President
Michael Lasky, and 321Lend's Shin Hwang, Johnny Tong and Chris Wu.
Upon 321Lend's successful commercial launch of its website and resulting
origination of its first loan to a borrower, the Company shall issue warrants to
purchase an aggregate of 36,000,000 shares of Company common stock at a price of
$0.05, with a minimum exercise of 1,000,000 shares, a term of 7 years, and
cash-only exercise, to the 321Lend stockholders.
Upon 321Lend's successful origination of an aggregate of $2,500,000 in loans to
borrowers, the Company shall issue warrants to purchase an aggregate of
72,000,000 shares of Company common stock at a price of $0.10, with a minimum
exercise of 1,000,000 shares, a term of 7 years, and cash-only exercise, to the
321Lend stockholders.
Upon 321Lend's successful commercial launch of its website and resulting
origination of its first loan to a borrower, the Company shall issue warrants to
purchase an aggregate of 36,000,000 shares of Company common stock at a price of
$0.05, with a minimum exercise of 1,000,000 shares, a term of 7 years, and
cash-only exercise, to the 321Lend stockholders.
Upon 321Lend's successful origination of an aggregate of $2,500,000 in loans to
borrowers, the Company shall issue warrants to purchase an aggregate of
72,000,000 shares of Company common stock at a price of $0.10, with a minimum
exercise of 1,000,000 shares, a term of 7 years, and cash-only exercise, to the
321Lend stockholders.
MARKETING
For PFN, we plan to advertise and market our services via the following avenues:
INFOMERCIALS - we anticipate that paid advertisements on television/radio will
be used to provide information about our services and direct traffic to our
different mediums.
WEB-BASED ANALYTICS - we plan to use advertisements, social media and search
engine optimization to help inform our target audience as well as make us stand
out from our peers.
WORD OF MOUTH - from historical experience, we believe that our clients will
tend to be repeat customers and friends of past customers. Word of mouth and
positive client experiences are a very important source of marketing and based
on providing a high level of service. With the strength of our brand name both
psychics and customers are very excited about the re-launch.
COMPETITION
The market for psychic services is competitive. PFN compete with a significant
number of online, telephone and brick and mortar psychic service companies, the
largest of which are Keen, California Psychics, Ask Now, Psychic Source and Live
Person.
Many of PFN competitors have significant advantages over PFN in terms of scale,
operating histories, number of locations in operation, capital and other
resources. PFN is a start-up company that has just begun to commence commercial
operations. Accordingly, there can be no assurances that PFN can successfully
compete in this market.
EMPLOYEES
As of September 30, 2014, the Company had two full time consultants and no
employees. Our personnel are responsible for performing or overseeing all
operations of the Company. Specifically, our personnel direct responsibilities
include, but are not limited to, developing our website and mobile application,
seeking the investment capital necessary to commence and build commercial
operations, creating our marketing, branding and sales strategy, driving the
overall services strategy, customer service, operations, and all financial
reporting and general administrative duties.
ITEM 1A RISK FACTORS
Not required for a smaller reporting company.
5
ITEM 1B UNRESOLVED STAFF COMMENTS
Not required for a smaller reporting company.
ITEM 2 PROPERTIES
Our principle corporate offices are located at 2360 Corporate Circle, Suite 400,
Henderson NV 89074.
ITEM 3 LEGAL PROCEEDINGS
None.
ITEM 4 MINE SAFETY DISCLOSURES
Not applicable.
6
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2014 and September 30, 2013
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
Peer to Peer Network (OTC:PTOP) hereinafter, ("the Company") was incorporated in
the State of Nevada on May 9, 2007 under the name "Web Wizard, Inc.". On
February 17, 2012 the Company's board passed a motion to change the corporate
name to "Psychic Friends Network, Inc." pursuant to an asset purchase agreement
executed on January 27, 2012. As part of this agreement, all of the assets of
PFN Holdings were purchased. These assets are an integral part of the Company's
business development and ultimately the realization of the Company's anticipated
cash flows. On September 8, 2014 the Company's board passed a motion to change
the corporate name to "Peer to Peer Network".
The Company is in the business of providing daily horoscopes and live psychic
advice by telephone, internet or our soon to be released mobile application. Our
website is www.psychicfriendsnetwork.com. First time customers will be offered
promotions and are able to choose their psychic friend by specialties. They also
are able to establish an ongoing relationship with their advisor, or they can
choose to try someone new the next time they call. We will strive to stay on the
cutting edge of technology in an effort to deliver our content. Currently this
includes Facebook applications, and twitter pages, that reward our customers
with free credits towards readings for sharing, liking or tweeting about PTOP.
We will also be giving all of our psychics their own website, to find new
customers.
BASIS OF PRESENTATION
The Company has not generated significant revenues from operations. There is no
bankruptcy, receivership, or similar proceedings against our company.
The accompanying audited financial statements have been prepared in accordance
with accounting principles generally accepted in the United States of America
and the rules and regulations of the United States Securities and Exchange
Commission for annual financial information.
GOING CONCERN
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. Its ability to continue as a going concern is
dependent upon the ability of the Company to obtain the necessary financing to
meet its obligations and pay its liabilities arising from normal business
operations when they come due. Furthermore, as of September 30, 2014, the
Company has accumulated losses from inception (May 9, 2007) of $1,294,258. The
outcome of these matters cannot be predicted with any certainty at this time and
raise substantial doubt that the Company will be able to continue as a going
concern. These financial statements do not include any adjustments to the
amounts and classification of assets and liabilities which may be necessary
should the Company be unable to continue as a going concern. Management believes
that the Company will need to obtain additional funding by borrowing funds from
its directors and officers, or a private placement of common stock through
various sales and public offerings.
The financial statements of the Company have been prepared in accordance with
generally accepted accounting principles in the United States of America.
Because a precise determination of many assets and liabilities is dependent upon
future events, the preparation of financial statements involves the use of
estimates, which have been made using judgment. Actual results may vary from
these estimates.
The financial statements have, in management's opinion, been prepared within the
framework of the significant accounting policies summarized below:
F-6
Peer to Peer Network
(Formerly "Psychic Friends Network, Inc.")
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2014 and September 30, 2013
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
CASH AND CASH EQUIVALENTS
The Company considers highly liquid financial instruments purchased with a
maturity of three months or less to be cash equivalents.
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 amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
ACCOUNTS RECEIVABLE
Accounts receivable are reported at the customers' outstanding balances less any
allowance for doubtful accounts. Interest is not accrued on overdue accounts
receivable. The Company evaluates receivables on a regular basis for potential
reserve.
FAIR VALUE OF FINANCIAL INSTRUMENTS
Fair value accounting establishes a fair value hierarchy that prioritizes the
inputs to valuation techniques used to measure fair value. The hierarchy gives
the highest priority to unadjusted quoted prices in active markets for identical
assets or liabilities (Level 1 measurements) and the lowest priority to
unobservable inputs (Level 3 measurements). The three levels of the fair value
hierarchy are described below:
Level 1 Unadjusted quoted prices in active markets that are accessible at the
measurement date for identical, unrestricted assets or liabilities;
Level 2 Quoted prices in markets that are not active, or inputs that are
observable, either directly or indirectly, for substantially the full
term of the asset or liability; and
Level 3 Prices or valuation techniques that require inputs that are both
significant to the fair value measurement and unobservable (supported
by little or no market activity).
The Company's financial instruments consist of cash, accounts receivable, equity
securities available for sale, accounts payable and accrued liabilities. Except
for the equity securities available for sale which are valued using level 1
inputs, the carrying amount of these financial instruments approximate fair
value due to either length of maturity or interest rates that approximate
prevailing market rates unless otherwise disclosed in these financial
statements.
REVENUE RECOGNITION
The Company recognizes revenue on an accrual basis. The Company generally earns
revenue through the online sale of service minutes. These purchases obligate the
Company to arrange a telephonic conversation with a designated service provider
of the customers choosing. The Company remits a portion of the fee to the
service provider and retains the balance. At the time of sale, the formal
arrangements are made and the Company has fulfilled its obligation. Furthermore,
the Company's portions of any fees collected are non-refundable. Revenue is
generally realized or realizable and earned when all of the following criteria
are met: 1) persuasive evidence of an arrangement exists between the Company and
our customer(s); 2) services have been rendered; 3) our price to our customer is
fixed or determinable; and 4) collectability is reasonably assured. For the year
ended September 30, 2014 and 2013, the Company recognized revenues of $1,785 and
$987 for which each of the four aforementioned criteria were satisfied.
F-7
Peer to Peer Network
(Formerly "Psychic Friends Network, Inc.")
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2014 and September 30, 2013
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED)
PER SHARE DATA
In accordance with "ASC 260 - Earnings per Share", the basic loss per common
share is computed by dividing net loss available to common stockholders by the
weighted average number of common shares outstanding. Diluted loss per common
share is computed similar to basic loss per common share except that the
denominator is increased to include the number of additional common shares that
would have been outstanding if the potential common shares had been issued and
if the additional common shares were dilutive. At September 30, 2014 and
September 30, 2013, the Company had no stock equivalents that were anti-dilutive
and excluded in the loss per share computation.
STOCK-BASED COMPENSATION
The Company records stock based compensation in accordance with the guidance in
ASC Topic 718 which requires the Company to recognize expenses related to the
fair value of its employee stock option awards. This eliminates accounting for
share-based compensation transactions using the intrinsic value and requires
instead that such transactions be accounted for using a fair-value-based method.
The Company records the value for options granted over the vesting period of the
options granted. Accordingly, the Company did not recognized expenses during the
year ended September 30, 2014 and 2013, respectively (see Note 6).
INVESTMENT IN SECURITIES
The cost of the Company's cost-method investment consist of an investment in a
company with which a merger is contemplated (see subsequent events footnote Note
9) that totaled $70,000 and $0 at September 30, 2014 and 2013. As the Company
owned less than 20% of that company's stock as of September 30, 2014, and no
significant influence or control exists, the investment is accounted for using
the cost method. The Company evaluated the investment for impairment. No
impairment was noted as of September 30, 2014.
WEBSITE DEVELOPMENT COSTS
The Company capitalizes its costs to develop its website and when preliminary
development efforts are successfully completed, management has authorized and
committed project funding, and it is probable that the project will be completed
and the website will be used as intended. Such costs are amortized on a
straight-line basis over the estimated useful life of the related asset, which
approximates three years. Costs incurred prior to meeting these criteria,
together with costs incurred for training and maintenance, are expensed as
incurred. Costs incurred for enhancements that are expected to result in
additional material functionality are capitalized and expensed over the
estimated useful life of the upgrades.
The Company capitalized website costs of $-0- and $37,686 during the year ended
September 30, 2014 and 2013, respectively. The Company's capitalized website
amortization is included in depreciation and amortization in the Company's
consolidated statements of operations, and totaled $28,536 and $23,261 for the
year ended September 30, 2014 and 2013, respectively.
ADVERTISING COSTS
Advertising costs are to be expensed as incurred in accordance to Company
policy; for the year ended September 30, 2014 and 2013, advertising expenses
totaled $3,520 and $28,523, respectively.
F-8
Peer to Peer Network
(Formerly "Psychic Friends Network, Inc.")
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2014 and September 30, 2013
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED)
INCOME TAXES
The Company records income taxes under the asset and liability method, whereby
deferred tax assets and liabilities are recognized based on the future tax
consequences attributable to temporary differences between the financial
statement carrying amounts of existing assets and liabilities and their
respective tax bases, and attributable to operating loss and tax credit
carryforwards. Accounting standards regarding income taxes requires a reduction
of the carrying amounts of deferred tax assets by a valuation allowance, if
based on the information available it is more likely than not that such assets
will not be realized. Accordingly, the need to establish valuation allowances
for deferred tax assets is assessed at each reporting period based on a
more-likely-than-not realization threshold. This assessment considers, among
other matters, the nature, frequency and severity of current and cumulative
losses, forecasts of future profitability, the duration of statutory
carryforward periods, the Company's experience with operating loss and tax
credit carryforwards not expiring unused, and tax planning alternatives.
RECENT ACCOUNTING PRONOUNCEMENTS
In June 2014, the Financial Accounting Standards Board issued Accounting
Standards Update No. 2014-10, which eliminated certain financial reporting
requirements of companies previously identified as "Development Stage Entities"
(Topic 915). The amendments in this ASU simplify accounting guidance by removing
all incremental financial reporting requirements for development stage entities.
The amendments also reduce data maintenance and, for those entities subject to
audit, audit costs by eliminating the requirement for development stage entities
to present inception-to-date information in the statements of income, cash
flows, and shareholder equity. Early application of each of the amendments is
permitted for any annual reporting period or interim period for which the
entity's financial statements have not yet been issued (public business
entities) or made available for issuance (other entities). Upon adoption,
entities will no longer present or disclose any information required by Topic
915. The Company has adopted this standard and will not report inception to date
financial information.
Management has evaluated all recent accounting pronouncements issued by the FASB
(including its Emerging Issues Task Force), the American Institute of Certified
Public Accountants, and the SEC did not, or are not believed by management to,
have a material impact on the Company's present or future financial position,
results of operations or cash flows.
NOTE 3 - INTANGIBLE ASSET
The following table presents the detail of other intangible assets for the
periods presented:
Gross
Carrying Accumulated Net Carrying Weighted-Average
Amount Amortization Amount Remaining Life
------ ------------ ------ --------------
September 30, 2014:
Capitalized website
development costs $ 84,436 $(57,300) $ 27,136 0.96 years
-------- -------- -------- ----------
Total $ 84,436 $(57,300) $ 27,136 0.96 years
======== ======== ======== ==========
|
F-9
Peer to Peer Network
(Formerly "Psychic Friends Network, Inc.")
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2014 and September 30, 2013
NOTE 4 - SECURITIES AVAILABLE FOR SALE
During the year ended September 30, 2014 the Company purchased equity securities
that are being held for sale in Telecorp, Inc. (TLNF.pk). Below is a table
summarizing the activity in TLNF:
For the period ended September 30, 2014 Shares Amount Gain (Loss)
--------------------------------------- ------ ------ -----------
Shares purchased ($0.0000269/share) 80,000,000 $ 2,150 $ --
Shares sold (total sale of $5,555) 48,000,000 (1,290) 4,265
Reverse stock split (basis $0.094061/share) 9,143 -- --
Unrealized loss at September 30, 2014 -- (631) (631)
---------- ---------- ----------
Total 9,143 $ 229
========== ========== ==========
|
NOTE 5 - CONVERTIBLE NOTE PAYABLE
On February 6, 2014 the Company entered into a $53,000 Convertible Promissory
Note with an unrelated third party finance company to fund operating expenses in
the form of $44,000 in cash and $9,000 advanced directly to vendors for
expenses. The Note shall accrued interest at 8% per annum with a 22% default
rate and matures on November 10, 2014. The holder has the right to convert into
common stock 180 days after issuance at a variable rate of 61% of the market
price as defined in the debenture document. Upon default, the Note will be
convertible at par or $0.001 per share. On August 18, 2014 the Company
extinguished this note by paying $73,641 in cash which included $20,115 in
interest and prepayment penalties. Accordingly, the remaining debt discount on
this note of $28,881 was expensed upon the extinguishment of this debt and
charged to interest expense.
On May 8, 2014 the Company entered into a $53,000 Convertible Promissory Note
with an unrelated third party finance company to fund operating expenses in the
form of $53,000 in cash . The Note shall accrued interest at 8% per annum with a
22% default rate and matures on February 12, 2015. The holder has the right to
convert into common stock 180 days after issuance at a variable rate of 58% of
the market price as defined in the debenture document. Upon default, the Note
will be convertible at par or $0.001 per share.
Accordingly, there has been a combined aggregate beneficial conversion feature
discount of $72,264 was calculated on these notes and as of September 30, 2014,
$53,760 in combined debt discount has been recorded as interest expense leaving
a remainder of $28,764. As of June 30, 2014 there is an aggregate combined total
of $3,572 in accrued interest assessed on these notes all of which was expensed
during the nine months ended June 30, 2014.
NOTE 6 - STOCKHOLDERS' EQUITY (DEFICIT)
As summarized in Note 1 on February 17, 2012, in addition to the name change,
our board of directors approved a ten (10) new for one (1) forward stock split
of our authorized and issued and outstanding shares of common stock. Upon effect
of the forward stock split, our authorized capital was increased from 75,000,000
to 750,000,000 shares of common stock and correspondingly, our issued and
outstanding shares of common stock was increased from 8,225,000 to 82,250,000
shares of common stock as of September 30, 2011, all with a par value of $0.001.
OPTIONS AND WARRANTS
During July 2012, the Company's shareholders approved its 2012 Stock Option Plan
("the Plan"). Under the Plan, the Company may issue up to 8,250,000 shares at
its discretion. On December 13, 2013, the Company granted 500,000 stock options
to a consultant of the Company of which 200,000 vested immediately, 150,000 on
December 13, 2014 and the balance of 150,000 on December 13, 2015. The options
expire five (5) years following the vesting date and carry a strike price of
$0.04.
F-10
Peer to Peer Network
(Formerly "Psychic Friends Network, Inc.")
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2014 and September 30, 2013
NOTE 6 - STOCKHOLDERS' EQUITY (DEFICIT) - (CONTINUED)
The 500,000 vested options were valued using the Black-Scholes model and the
following inputs: 5 year life, volatility of 154%, interest rate of 1.55%, and
0% forfeiture rate. The resulting value was $0.0377 per option for a total value
of $7,543. The 500,000 vested options were canceled in February of 2014.
Accordingly for options granted during the years pursuant to ASC Topic 718,
during the year ended September 30, 2014, the Company recognized expense of $-0-
and ($2,429), respectively.
A summary of the status of the options granted at September 30, 2014 and
September 30, 2013 and changes during the periods then ended is presented below:
September 30, 2014 September 30, 2013
----------------------------- -----------------------------
Weighted Average Weighted Average
Shares Exercise Price Shares Exercise Price
------ -------------- ------ --------------
Outstanding at -- $ -- 200,000 $ 0.35
beginning of period
Granted 500,000 0.04 -- --
Exercised -- -- -- --
Expired or canceled (500,000) 0.04 (200,000) 0.35
-------- ------- -------- -------
Outstanding at end
of period -- $ -- -- $ --
======== ======= ======== =======
Exercisable -- $ -- -- $ --
======== ======= ======== =======
|
COMMON STOCK
NOTE 7 - INCOME TAXES
The Company provides for income taxes under FASB ASC 740, Accounting for Income
Taxes. FASB ASC 740 requires the use of an asset and liability approach in
accounting for income taxes. Deferred tax assets and liabilities are recorded
based on the differences between the financial statement and tax bases of assets
and liabilities.
FASB ASC 740 requires the reduction of deferred tax assets by a valuation
allowance, if, based on the weight of available evidence, it is more likely than
not that some or all of the deferred tax assets will not be realized. In the
Company's opinion, it is uncertain whether they will generate sufficient taxable
income in the future to fully utilize the net deferred tax asset. Accordingly, a
valuation allowance equal to the deferred tax asset has been recorded. The total
deferred tax asset since inception is $342,572 which is calculated by
multiplying a 34% estimated tax rate by the cumulative net operating loss (NOL)
adjusted for the following items:
F-11
Peer to Peer Network
(Formerly "Psychic Friends Network, Inc.")
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2014 and September 30, 2013
NOTE 7 - INCOME TAXES - (CONTINUED)
For the period ended September 30, 2014 2013
---------------------------------- ---------- ----------
Book loss for the year $ (395,584) $ (444,040)
Adjustments:
Meals and entertainment 640 4,065
Stock based compensation 2,870 54,201
Unpaid payroll taxes 29,542 29,542
Discount amortization 53,760 --
---------- ----------
Tax loss for the year $ (308,773) $ (356,232)
Estimated effective tax rate 34% 34%
---------- ----------
Deferred tax asset $ (104,983) $ (121,120)
========== ==========
|
The total valuation allowance is $342,572. Details for the last two periods are
as follows:
For the period ended September 30, 2014 2013
---------------------------------- ---------- ----------
Deferred tax asset $ 104,983 $ 121,120
Valuation allowance (104,983) (121,120)
---------- ----------
Net deferred tax asset -- --
---------- ----------
Income tax expense $ -- $ --
========== ==========
|
Below is a chart showing the estimated corporate federal cumulative net
operating loss (NOL) carry forward of $1,007,564 and the years in which it will
expire.
Year Amount Expiration
---- ------ ----------
2014 $ 308,773 2034
2013 $ 356,232 2033
Prior to 2013 $ 342,559 Prior to 2033
|
NOTE 8 - RELATED PARTY TRANSACTIONS
As of September 30, 2013, the President was owed $11,250 in accrued salaries
payable.
NOTE 9 - SUBSEQUENT EVENTS
On November 11, 2014, the Company approved an issuance of 300,000 shares valued
at $0.02 per share in exchange for $6,000 in cash.
On July 17, 2014, the Company entered into an agreement and plan of merger with
PFN Sub, Corp and 321 Lend, Inc. The agreement stipulates that 18,000,000 shares
of the Company valued at $270,000 or $0.015 per share shall be issued in
exchange for the intellectual and ownership rights of 321 Lend, Inc. The merger
will not officially close and the assets of 321 Lend, Inc. and Company's common
stock will be held in escrow until $500,000 in capital financing is achieved. As
of September 30, 2014, $171,000 of the $500,000 had been raised (see Note 5).
Furthermore, the Company has acquired securities of 321 Lend, Inc in the amount
of $70,000 during the year ending September 30, 2014, which is presented in the
balance sheet as "Investment in securities, at cost"
The Company has evaluated events subsequent to the balance sheet date through
the issuance date of these financial statements in accordance with FASB ASC 855
and has determined there are no other events that would require adjustment to,
or disclosure in, the financial statements.
F-12
