The accompanying notes are an integral part of these
condensed consolidated financial statements.
The accompanying notes are an integral part of these
condensed consolidated financial statements.
The accompanying notes are an integral part of these
condensed consolidated financial statements.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2014 and 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.
Certain information or footnote disclosures normally included in financial
statements prepared in accordance with accounting principles generally accepted
in the United States of America have been condensed or omitted, pursuant to the
rules and regulations of the Securities and Exchange Commission for interim
financial reporting. Accordingly, they do not include all the information and
footnotes necessary for a comprehensive presentation of financial position,
results of operations, or cash flows. It is management's opinion, however, that
all material adjustments (consisting of normal recurring adjustments) have been
made which are necessary for a fair financial statement presentation. The
interim results for the three months ended December 31, 2014 are not necessarily
indicative of results for the full fiscal year. It is suggested that these
financial statements be read in conjunction with the audited financial
statements and notes thereto included in the Company's annual report on Form
10-K for the year ended September 30, 2014.
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 December 31, 2014, the Company
has accumulated losses from inception (May 9, 2007) of $1,376,198. 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.
7
Peer to Peer Network
(Formerly "Psychic Friends Network, Inc.")
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2014 and 2013
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:
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
The fair value of the Company's financial instruments, consisting of cash and
accounts payable and accrued liabilities, is equal to fair value due to their
short-term to maturity. Unless otherwise noted, it is management's opinion that
the Company is not exposed to significant interest, currency or credit risks
arising from these financial instruments.
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
three months ended December 31, 2014 and 2013, the Company recognized revenues
of $-0- and $1,529, respectively for which each of the four aforementioned
criteria were satisfied.
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
8
Peer to Peer Network
(Formerly "Psychic Friends Network, Inc.")
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2014 and 2013
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED)
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 December 31, 2014 and 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
three months ended December 31, 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
7) that totaled $70,000 and $0 at September 30, 2014 and 2013. During the period
ended December 31, 2014, the Company invested an additional $3,000 in the cost
method investment for a total of $73,000. 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
December 31, 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 $-0- during the three months
ended December 31, 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 $7,193 and $7,193
for the three months ended December, 2014 and 2013, respectively.
ADVERTISING COSTS
Advertising costs are to be expensed as incurred in accordance to Company
policy; for the three ended December31, 2014 and 2013, advertising expenses
totaled $693 and $-0-, respectively.
RECENT ACCOUNTING PRONOUNCEMENTS
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.
9
Peer to Peer Network
(Formerly "Psychic Friends Network, Inc.")
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2014 and 2013
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
------ ------------ ------ --------------
December 31, 2014:
Capitalized website
development costs $ 84,436 $(64,493) $ 19,943 0.71 years
-------- -------- -------- ----------
Total $ 84,436 $(64,493) $ 19,943 0.71 years
======== ======== ======== ==========
|
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 three months ended
December 30, 2014 Shares Amount Gain (Loss)
----------------- ------ ------ -----------
Shares held, September 30, 2014 9,143 $ 229 $ --
Unrealized loss, December 31, 2014 -- (183) (183)
----- ----- -----
Balance, December 31, 2014 9,143 $ 46 $(183)
===== ===== =====
|
NOTE 5 - CONVERTIBLE NOTE PAYABLE
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
beneficial conversion feature discount of $38,379 calculated on this note. As of
December, 2014, $33,597 in debt discount has been recorded as interest expense
leaving a remainder of $4,782. As of December 31, 2014 there is was a total of
$4,874 in accrued interest assessed on this note of which $1,828 was expensed
during the three months ended December 31, 2014. On November 24, 2014, the note
holder exercised their conversion rights and converted $10,000 of the note
payable into 1,923,077 shares of common stock (see Note 6). As part of this
transaction the proportional remaining debt discount of $2,069 related to this
conversion was expensed.
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.
COMMON STOCK
On November 24, 2014 a convertible note holder converted $10,000 into 1,923,077
shares of common stock at a price of $0.0052 per share (see Note 5).
10
Peer to Peer Network
(Formerly "Psychic Friends Network, Inc.")
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2014 and 2013
NOTE 6 - STOCKHOLDERS' EQUITY (DEFICIT) - (CONTINUED)
COMMON STOCK SUBSCRIPTIONS PAYABLE
On November 19, 2014 the Company received $6,000 in exchange for 300,000 in
common stock subscriptions payable valued at $0.02 per share. These shares will
be issued in conjunction with the total capital raise of $500,000 and the
pending merger with 321 Lend.
NOTE 7 - SUBSEQUENT EVENTS
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 December 31, 2014, $177,000 of the $500,000 had been raised (see Note 6).
Furthermore, the Company has acquired securities of 321 Lend, Inc in the amount
of $73,000 as of December 31, 2014, which is presented in the balance sheet as
"Investment in securities, at cost"
On January 27, 2017 the Company issued 200,000 shares of common stock at $0.005
per share or $1,000 in exchange for services rendered.
On February 2, 2015 a convertible note holder converted $10,105 into 5,318,421
shares of common stock at a price of $0.0019 per share.
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.
11
