PTOP Peer to Peer Network (PK)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

[X]   QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2015

[ ]   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to _________

Commission file number: 001-33968

PEER TO PEER NETWORK

(Address of principal executive offices, including zip code)

(Issuer's telephone number, including area code)

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

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange  Act during the past 12 months (or for such shorter period that the registrant was required to file such reports),  and (2) has been subject to such filing requirements for the past 90 days.

Yes [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-5 (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).  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. See the definitions 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 [ ]                          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 [  ] No [X]

APPLICABLE ONLY TO CORPORATE ISSUERS:

The issuer had 225,722,836 outstanding shares of common stock outstanding as of 12/10/2015.

 

TABLE OF CONTENTS

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PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

INDEX TO FINANCIAL STATEMENTS

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		June 30,				September 30,
		2015				2014
ASSETS		(unaudited)
Current assets
Cash		$	-			$	2,644
Accounts receivable			153				125
Equity securities available for sale			1				229
Total current assets			154				2,998
Investment in securities, at cost			-				70,000
Intangible assets
Software development costs, net of $78,643 and $57,300 of accumulated amortization, respectively			5,792				27,136
Total Assets		$	5,946			$	100,134
LIABILITIES
Current Liabilities
Accounts payable and accrued liabilities		$	142,591			$	88,087
Accrued salaries to an officer			58,019				11,250
Derivative liability			185,054				-
Convertible notes payable, net of discount of $22,808 and $18,504, respectively			18,845				34,496
Total current liabilities			404,509				133,833
Convertible debt related parties, net of discount of $121,834 and $-0-, respectively			128,166				-
Total Liabilities			532,675				133,833
STOCKHOLDERS' DEFICIT
Common stock; 750,000,000 shares authorized at $0.001 par value; 210,339,352 and 88,977,543 issued and outstanding at June 30, 2015 and September 30, 2014, respectively			210,340				88,978
Common stock payable			-				171,000
Additional paid-in capital			950,732				1,001,212
Accumulated other comprehensive loss			(859	)			(631	)
Accumulated deficit			(1,686,942	)			(1,294,258	)
Total stockholders' deficit			(526,729	)			(33,699	)
Total liabilities and stockholders' deficit		$	5,946			$	100,134

 

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.

 

 

 

		For the Nine Months Ended
		June 30, 2015				June 30, 2014
OPERATING ACTIVITIES
Net loss		$	(392,684	)		$	(263,168	)
Adjustments to reconcile net loss from operations:
Amortization expense			21,344				21,343
Common stock issued for services			107,536				2,870
Amortization of debt discount			21,773				24,879
Expenses paid by convertible note holders			25,000				18,000
Derivative expense			37,143				-
Asset impairment			73,000				-
Change in operating assets and liabilities:
Increase in accounts receivable			(28	)			(75	)
Increase in accounts payable to a related party			46,769				-
Increase in accrued interest			2,700				3,572
Increase in accounts payable and accrued liabilities			51,803				45,953
Net cash used in operating activities			(5,644	)			(146,626	)
INVESTING ACTIVITIES
Investment in securities, at cost			(3,000	)			-
Net cash used in investing activities			(3,000	)			-
FINANCING ACTIVITIES
Proceeds from stock subscriptions payable			6,000				-
Proceeds from convertible notes payable			-				88,000
Net cash provided by financing activities			6,000				88,000
NET CHANGE IN CASH AND CASH EQUIVALENTS			(2,644	)			(58,626	)
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD			2,644				75,393
CASH AND CASH EQUIVALENTS - END OF PERIOD		$	-			$	16,767
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest		$	-			$	-
Cash paid for taxes		$	-			$	-
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Common stock issued in exchange for convertible note payable		$	36,347			$	-
Beneficial conversion feature		$	-			$	72,264
Common stock issued for subscriptions payable		$	177,000			$	-
Debt discount for derivative liability on convertible notes		$	147,911			$	-
Convertible note issued for license agreement with related party		$	250,000			$	-

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

 

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 periods ended June 30, 2015 and 2014 are not necessarily indicative of results for the full fiscal years. 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 June 30, 2015, the Company has accumulated losses from inception (May 9, 2007) of $1,686,942. 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.

 

NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS - (CONTINUED)

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 nine months ended June 30, 2015 and 2014, the Company recognized revenues of $81 and $1,735, 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 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. As of June 30, 2015 and 2014, the Company had 188,698,889 and -0- stock equivalents that were anti-dilutive and excluded in the loss per share computation, respectively.

 

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES – (CONTINUED)

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 nine months ended June 30, 2015 and 2014, respectively (see Note 8).

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 $73,000 and $70,000 at June 30, 2015 and September 30, 2014, respectively. During the period ended June 30, 2015, 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 June 30, 2015 and 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.  On March 6, 2015 the agreement between 321Lend and the Company was canceled and the value of the ownership in 321Lend was deemed to be worthless by management. Accordingly, an impairment expense of $73,000 was realized during the nine months ended June 30, 2015.

Software 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 nine months ended June 30, 2015 and 2014, respectively. The Company’s capitalized website amortization is included in depreciation and amortization in the Company’s consolidated statements of operations, and totaled $21,343 and $21,343 for the nine months ended June 30, 2015 and 2014, respectively.

Advertising Costs

Advertising costs are to be expensed as incurred in accordance to Company policy; for the nine ended June 30, 2015 and 2014, advertising expenses totaled $861 and $2,661, 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.

 

NOTE 3 – INTANGIBLE ASSET

The following table presents the detail of other intangible assets for the periods presented:

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:

NOTE 5 – CONVERTIBLE NOTES 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 matured 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 June 30, 2015, the entire debt discount has been recorded as interest expense leaving a remainder of $-0-. As of June 30, 2015 there was a total of $5,746 in accrued interest assessed on this note of which $2,700 was expensed during the nine months ended June 30, 2015. During the nine months ended June 30, 2015, the note holder exercised their conversion rights and converted $36,347 of the note payable into 28,949,309 shares of common stock (see Note 8). As part of this transaction the proportional remaining debt discount of $2,069 related to this conversion was expensed.

 

NOTE 5 – CONVERTIBLE NOTE PAYABLE - (CONTINUED)

On May 29, 2015 a third party paid Company expenses forming a convertible note payable of $22,000. The note has an original issue discount (OID) of $3,000 (12%) resulting in a face value of $25,000. The note is unsecured due 1 year from the date of issuance. The note is convertible with an anti-dilutive feature into common stock at a discount of 50% of the closing market price of the average 3 lowest days of the preceding 20 trading days. Accordingly, a debt discount of $22,000 has been charged against the note of which $1,929 was expensed during the three months ended June, 30, 2015. Likewise, $263 of the OID was expensed during the same three months. This $22,000 is a partial draw on a $600,000 financing agreement entered into with a third party. All draws pursuant to the financing agreement contain a 12% OID and are convertible at 50% as previously described. The convertibility of the note results in a derivative liability (see Note 6).

NOTE 6 – DERIVATIVE LIABILITY

Due to the conversion features on two note payables issued during the quarter, management has determined that the conversion features result in a derivative liability. The liability was calculated on the $250,000 and $22,000 notes using the Black Scholes model with the following variables: strike prices of $0.002034 and $0.0006, volatility of $348.75%, dividend rate of 0.00%, and a risk free rate of return of 2.12% and 0.6%, respectively. Therefore, for the three months ended June 30, 2015, a derivative liability of $122,911 and $41,476 was expensed at the date of valuation (May 29, 2015). The liabilities were revalued at June 30, 2015 resulting in a mark-to-market fair value expense of $20,666. The liability will be revalued on a quarterly basis.

 

NOTE 8 – STOCKHOLDERS’ DEFICIT

As summarized in Note 1 on February 17, 2012, in addition to the name change, our board of directors approved a ten (10) 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).

On January 27, 2015 the Company issued 200,000 shares of common stock at $0.0015 per share or $300 in exchange for services rendered.

On February 10, 2015 a convertible note holder converted $10,105 into 5,318,421 shares of common stock at a price of $0.0019 per share (see Note 5).

On February 17, 2015 the Company issued 8,850,000 shares for $177,000 of subscriptions payable previously received at $0.02 per share.

On March 25, 2015 the Company issued 4,800,000 shares for $0.0027 per share for $12,960 of consulting services.

On April 8, 2015 a convertible note holder converted $5,145 into 5,415,789 shares of common stock at a price of $0.00095 per share (see Note 5).

On April 29, 2015 a convertible note holder converted $4,380 into 55,407,407 shares of common stock at a price of $0.00081 per share (see Note 5).

On May 13, 2015 a convertible note holder converted $4,060 into 5,384,615 shares of common stock at a price of $0.00075 per share (see Note 5).

 

NOTE 8 – STOCKHOLDERS’ DEFICIT - (CONTINUED)

On May 14, 2015 the Company issued 78,562,500 common shares to Company officers in extinguishment of $94,275 in salaries payable valued at $0.0012 per share.

On June 24, 2015 a convertible note holder converted $2,657 into 5,500,000 shares of common stock at a price of $0.00048 per share (see Note 5).

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 9 - SUBSEQUENT EVENTS

On July 7, 2015 the Board of Directions passed a motion to transfer the intellectual property of the Psychic Friends Network to Marc Lasky in lieu of $17,000 in accrued compensation.

On July 10, 2015 the Company entered into a convertible note with a 10% Original Issue Discount (OID). The note bears no interest for the first three months and the OID is prorated thereafter. The note matures on a rolling two years from the date of funding and the total face value to be funded is $150,000 ($135,000 cash plus $15,000 OID) with the initial $25,000 being funded upon closing of the note and the balance in subsequent tranches. The note is convertible at the lesser $0.002 or 60% of the lowest trade price in the 25 trading days previous to the conversion.

On July 10, 2015 the Company entered into a convertible note with a third party with an OID of $4,092 or 12% and a face value of $34,100. The note matures on May 28, 2016 and is convertible into share of the Company's common stock at $0.001 par value. The note contains a default interest rate of 20% per annum. This is the second draw on the $600,000 financing agreement disclosed in Note 5.

On July 13, 2015 hired a Director of Business Development. The director will receive 2.5% of the diluted shares of the Company payable in two equal notes with the first being due July 21, 2015. The consulting agreement with the director is to raise $10 million in financing. The Company agreed to pay the consultant 8% cash and 8% in warrants on the equity lines of credit and 3% cash and no warrants on straight debt capital raised. The agreement contains a retainer with two phases: 1) selling the public vehicle and exclusive license, and 2) selling the public vehicle all of Code2Action's intellectual property and assets. The third party shall be issued 2.5% of the post closing fully-diluted capitalization of the Company. As of the issuance date of these financials, the Company owed 5,383,484 shares pursuant to this retainer.

On July 17, 2015 the Company entered into a convertible debt financing agreement with a third party financer. The agreement consists of an initial $31,500 in funding as well as $31,500 in 'back-end' funding for a total face value of $63,000 which is collateralized and matured March 17, 2016. The note bears an 8% interest rate and has a 30 day prepayment penalty of 118% to 148% of the notes face value plus interest. The principal and interest are convertible into common shares at a 50% discount to the lowest previous 20 day trading price. The note matures on July 17, 2016.

On July 27, 2015 a convertible note holder converted $5,220 into 10,000,000 shares of common stock at a price of $0.000522 per share.

On August 7, 2015 the Company entered into a convertible note with a 10% OID with a face value of $30,250. The principal and interest are convertible into common shares at a 50% discount to the lowest previous 20 day trading price. The note matures on August 7, 2016. The note stipulates a total of $110,000 in funding (with a $121,000 face value) issuable in $27,500 tranches within 120 days of the execution of the agreement.

 

NOTE 9 - SUBSEQUENT EVENTS - (CONTINUED)

 

 

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

This report 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 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 report references to "we", "our",  "us", "the Company", and similar terms refer to Peer to Peer Network.

OVERVIEW

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." On August 27, 2014, the Company changed its name to Peer to Peer Network.

 

Business

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On September 1, 2015, the Company has discontinued its operations as Psychic Friends Network and pursuant to a public auction, sold its assets related to that business for $17,000.

RESULTS OF OPERATIONS

The following discussion of the financial condition and results of operations should be read in conjunction with the unaudited interim financial statements included herewith. This discussion should not be construed to imply that the results discussed herein will necessarily continue into the future, or that any conclusion reached herein will necessarily be indicative of actual operating results in the future.

For the three and nine months ended June 30, 2014 versus 2015:

We generated $0 in revenue for the three months and $81 for the nine months ended June 30, 2015, compared to $24 and $1,735 during the same respective periods in 2014. All such minimal revenues are from the Company’s prior operations of the Psychic Friends Network. The Company has yet to earn revenues from its current C2A business.

For the three and nine months ended June 30, 2015, total operating expenses for the Company were $90,235 and $254,685 respectively, compared to $69,167 and $236,285 for the same respective periods in 2014. The minor increase was mainly attributable to increased payroll expenses in operating C2A.

Our net loss for the three and nine months ended June 30, 2015 was $112,768 and $392,684 respectively compared to $90,573 and $254,685 during the same respective periods in 2014. As we have generated no substantial revenues, the net loss figures generally follow our operating expenses, however the increase from 2014 to 2015 was attributable to an asset impairment from our prior investment in 321Lend and a change in derivative value.

LIQUIDITY AND CAPITAL RESOURCES

As of June 30, 2015, we have yet to generate any revenues from our C2A business.

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As of June 30, 2015, we had no cash and $5,946 in total assets, nearly all of which is attributed to software development.  Our total liabilities were $532,675.

The Company believes it currently does not have sufficient funds to execute its business plan.  We anticipate that additional capital will be required to implement our business plan to support revenue generation for the remainder of 2015 and 2016.  In order to obtain the necessary capital, the Company may need to sell additional shares of common stock or borrow funds from private lenders.

Even if we are able to raise the funds required, it is possible that we could incur unexpected costs and expenses, fail to collect significant amounts owed to us or experience unexpected cash requirements that would force us to seek alternative financing.  Further, if we issue additional equity or debt securities as a means of raising additional capital, stockholders may experience dilution or the new equity securities may have rights, preferences or privileges senior to those of existing holders of common stock.

OFF BALANCE SHEET ARRANGEMENTS

None.

 

CRITICAL ACCOUNTING POLICIES

See Note 2 “Significant Accounting Policies” within the notes to our financial statements.

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 4. CONTROLS AND PROCEDURES

(A) EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the  Securities Exchange  Act of 1934,  as  amended,  is  recorded,  processed,  summarized  and reported  within the time  periods  specified  in the  Securities  and  Exchange Commission's  rules and forms,  and that such  information  is  accumulated  and communicated to our management, including our Chief Executive Officer (our principal executive officer, principal financial officer and principle accounting officer) to allow for timely decisions regarding required disclosure.

As of the end of the quarter covered  by  this  report,  we  carried  out an evaluation,  under the supervision and with the  participation  of our Chief Executive Officer,  of the  effectiveness  of the design and operation of our disclosure controls and procedures. Based on that evaluation, our management, including our Chief Executive Officer have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures are not effective in ensuring that information required to be disclosed in our Exchange Act reports is (1) recorded, processed, summarized and reported in a timely manner, and (2) accumulated and communicated to our management, including our Chief Executive Officer, as appropriate to allow timely decisions regarding required disclosure.

(B) CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

There were no significant changes in the Company's internal control over financial reporting  during the quarter ended June 30, 2015.

 

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

N/A

ITEM 5. OTHER INFORMATION

None.

 

 

 

 

 

ITEM 6. EXHIBITS

18

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SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Exhibit 31

 

Exhibit 32

 

 

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