UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q
 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended: September 30, 2020
 
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: 000-52917
 
FRIENDABLE, INC.

  (Exact name of registrant as specified in its charter)
 
Nevada
 
98-0546715
(State or other jurisdiction of incorporation)
 
(I.R.S. Employer Identification No.)
 
1821 S Bascom Ave., Suite 353, Campbell, California 95008

  (Address of principal executive offices) (zip code)
 
(855) 473-8473

  (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 registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
 
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 (§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 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
(Do not check if a smaller reporting company)
Smaller reporting company
 
 
 
Emerging growth company
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
 
Yes No
 
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:
 
132,663,982 shares of common stock outstanding as of November 23, 2020 of which 106,558,432 are issuable as of the date of this report.
 
 
i
 
 
TABLE OF CONTENTS
 
 
 
 
 
 
ii
 
 
As used in this report, the term “the Company” means Friendable, Inc., formerly known as iHookup Social, Inc., and its subsidiary, unless the context clearly indicates otherwise.
 
Special Note Regarding Forward-Looking Information
 
This quarterly report on Form 10-Q contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. The use of words such as “anticipates,” “estimates,” “expects,” “intends,” “plans” and “believes,” among others, generally identify forward-looking statements. These forward-looking statements include, among others, statements relating to: the Company’s future financial performance, the Company’s business prospects and strategy, anticipated trends and prospects in the industries in which the Company’s businesses operate and other similar matters. These forward-looking statements are based on the Company’s management's expectations and assumptions about future events as of the date of this quarterly report, which are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict.
 
Actual results could differ materially from those contained in these forward-looking statements for a variety of reasons, including, among others, the risk factors set forth below. Other unknown or unpredictable factors that could also adversely affect the Company’s business, financial condition and results of operations may arise from time to time. In light of these risks and uncertainties, the forward-looking statements discussed in this quarterly report may not prove to be accurate. Accordingly, you should not place undue reliance on these forward-looking statements, which only reflect the views of the Company’s management as of the date of this quarterly report. The Company does not undertake to update these forward-looking statements
 
In this quarterly report on Form 10-Q, unless otherwise specified, all dollar amounts are expressed in United States dollars and all references to “common shares” refer to the common shares in the Company’s capital stock.
 
An investment in the Company’s common stock involves a number of very significant risks. You should carefully consider the following risks and uncertainties in addition to other information in this quarterly report on Form 10-Q in evaluating the Company and its business before purchasing shares of the Company’s common stock. The Company’s business, operating results and financial condition could be seriously harmed as a result of the occurrence of any of the following risks. You could lose all or part of your investment due to any of these risks. You should invest in the Company’s common stock only if you can afford to lose your entire investment.
 
 
 
 
 
 
 
 
iii
 
 
PART I - FINANCIAL INFORMATION
 
 
ITEM 1.  FINANCIAL STATEMENTS.
 
 
 
 
 
 
FRIENDABLE, INC.
 
CONSOLIDATED FINANCIAL STATEMENTS
 
 
 
 
September 30, 2020
 
(Unaudited)
 
 
 
 

 
 
1
 
 
 
FRIENDABLE INC.
 
 
CONSOLIDATED BALANCE SHEETS
 
 
 
 
 
 
 
 
 
 
September 30,
 
 
December 31,
 
 
 
2020
 
 
2019
 
 
 
(Unaudited)
 
 
 
 
 
ASSETS
 
CURRENT ASSETS:
 
 
 
 
 
 
Cash
 $8,851 
 $11,282 
Accounts receivable
  147 
  135 
Prepaid expense
  106,167 
  30,000 
Due from a related party
  - 
  30,083 
 
    
    
Total Current Assets
  115,165 
  71,500 
 
    
    
Total Assets
 $115,165 
 $71,500 
 
    
    
 
LIABILITIES AND STOCKHOLDERS' DEFICIT
 
CURRENT LIABILITIES:
    
    
Accounts payable and accrued expenses
 $2,389,774 
 $1,997,326 
Accounts payable - related party
  141,803 
  - 
 Short term loans
  61,000 
  - 
Convertible debentures and convertible promissory notes, net of discounts
  55,850 
  69,930 
Mandatorily redeemable Series C convertible Preferred stock, 1,000,000 shares
    
    
 designated, 124,800 and 149,300 shares issued and outstanding at September 30,2020
    
    
 and December 31,2019, including premium of $76,462 and $55,549 respectively (Liquidation value $208,867)
  285,329 
  191,549 
Derivative liabilities
  209,000 
  12,778,000 
Liability to be settled in common stock
  988,375 
  1,005,000 
 
    
    
Total Current Liabilities
  4,131,131 
  16,041,805 
 
    
    
Total Liabilities
  4,131,131 
  16,041,805 
 
    
    
Commitments and contingencies (Note 7)
    
    
 
    
    
STOCKHOLDERS' DEFICIT:
    
    
Preferred stock, 50,000,000 authorized at par value $0.0001
    
    
Series A convertible Preferred stock, 25,000 shares designated at par value of $0.0001, 19,786 and 19,789 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively.
  2 
  2 
 
    
    
Series B convertible preferred stock, $0.0001 par value, 1,000,000 shares designated; 284,000 and 284,000 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively.(Liquidation value $284,000)
  28 
  28 
Common stock, $0.0001 par value, 1,000,000,000 shares authorized; 21,218,432 and 4,398,114 shares issued and outstanding at September 30, 2020 and December 31,2019, respectively
  2,122 
  438 
Common stock issuable, $0.0001 par value, 106,558,432 and 8,518,335 shares at September 30, 2020 and December 31, 2019, respectively
  10,655 
  852 
Additional paid-in capital
  30,909,397 
  16,476,758 
Common stock subscription receivable
  (4,500)
  (4,500)
Accumulated deficit
  (34,933,670)
  (32,443,883)
 
    
    
Total Stockholders' Deficit
  (4,015,966)
  (15,970,305)
 
    
    
Total Liabilities and Stockholders' Deficit
 $115,165 
 $71,500 
 
    
    
 
See accompanying notes to consolidated financial statements
 
 
 
2
 
 
 
FRIENDABLE INC.
 
 
CONSOLIDATED STATEMENTS OF OPERATIONS
 
 
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
For the Three Months Ended
 
 
For the Nine Months Ended
 
 
 
September 30,    
 
 
September 30,    
 
 
 
2020
 
 
2019
 
 
2020
 
 
2019
 
 
 
 
 
 
 
 
 
 
 
 
 
 
REVENUES
 $111,392 
 $118,801 
 $322,671 
 $120,662 
 
    
    
    
    
OPERATING EXPENSES:
    
    
    
    
App hosting
  12,000 
  2,301 
  33,000 
  18,068 
Commissions
  191 
  61 
  625 
  619 
General and administrative
  224,401 
  187,352 
  605,458 
  577,605 
Product development and launch
  105,790 
  100,500 
  460,102 
  156,088 
Artists' performance fees
  425,058 
  - 
  425,058 
  - 
Artists' revenue share
  402 
  - 
  402 
  - 
Investor relations
  3,921 
  - 
  140,527 
  - 
Sales and Marketing
  30,081 
  28,788 
  82,335 
  52,924 
 
    
    
    
    
Total operating expenses
  801,844 
  319,002 
  1,747,507 
  805,304 
 
    
    
    
    
LOSS FROM OPERATIONS
  (690,452)
  (200,201)
  (1,424,836)
  (684,642)
 
    
    
    
    
OTHER INCOME (EXPENSE):
    
    
    
    
Accretion and interest expense
  (38,423)
  (189,117)
  (266,710)
  (453,674)
Provision for settlement of lawsuit
  - 
  (780,000)
  - 
  (780,000)
Gain on foreign exchange
  - 
  - 
  2,580 
  - 
Initial derivative expense
  - 
  - 
  (419,000)
  - 
Gain (loss) on settlement of derivative
  257,317 
  - 
  (640,821)
  - 
     Gain on change in fair value of derivative
  263,000 
  - 
  259,000 
  - 
Total other income (expense), net
  481,894 
  (969,117)
  (1,064,951)
  (1,233,674)
 
    
    
    
    
NET LOSS
 $(208,558)
 $(1,169,318)
 $(2,489,787)
 $(1,918,316)
 
    
    
    
    
NET LOSS PER COMMON SHARE:
    
    
    
    
Basic and diluted
 $(0.002)
 $(3.72)
 $(0.04)
 $(6.10)
 
    
    
    
    
 
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
 
    
    
    
Basic and diluted
  121,819,362 
  314,726 
  66,468,267 
  314,726 
 
    
    
    
    
 
See accompanying notes to consolidated financial statements              
 
 
 
3
 
 
 
FRIENDABLE INC.        
 
 
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT
 
 
For the three and nine months ended September 30,2020
 
 
(Unaudited)        
 
 
 
 Series A Preferred Stock
 
 
Series B Preferred
 
 
 Common Stock
 
 
Additional
 
 
Common Stock
 
 

 
 
Total
 
 
 Shares 
 

 
 Shares 
 

 
 Shares 
 

 
 Shares 
 

 
 Shares 
 

 
 
Paid In
 
 
Subscription
 
 
Accumulated
 
 
Shareholders'
 
 
 
Issued
 
 
Amount
 
 
Issuable
 
 
Amount
 
 
Issued
 
 
Amount
 
 
Issued
 
 
Amount
 
 
Issuable
 
 
Amount
 
 
Capital
 
 
Receivable
 
 
Deficit
 
 
Equity Deficit
 
Balance, December 31, 2019
  19,789 
 $2 
  - 
 $- 
  284,000 
 $28 
  4,398,114 
 $438 
  8,518,335 
 $852 
 $16,476,758 
 $(4,500)
 $(32,443,883)
 $(15,970,305)
Common shares cancelled
  - 
  - 
  - 
  - 
  - 
  - 
  (2,000)
  - 
  - 
  - 
  (500)
  - 
  - 
  (500)
 
    
    
    
    
    
    
    
    
    
    
    
    
    
    
Conversion of Convertible notes
  - 
  - 
  - 
  - 
  - 
  - 
  362,595 
  36 
  - 
  - 
  19,914 
  - 
  - 
  19,950 
 
    
    
    
    
    
    
    
    
    
    
    
    
    
    
Common shares issued for services
  - 
  - 
  - 
  - 
  - 
  - 
  600,000 
  60 
  - 
  - 
  89,940 
  - 
  - 
  90,000 
 
    
    
    
    
    
    
    
    
    
    
    
    
    
    
Common stock issuable under debt
    
    
    
    
    
    
    
    
    
    
    
    
    
    
restructuring agreement
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  36,193,098 
  3,620 
  8,415,518 
  - 
  - 
  8,419,138 
 
    
    
    
    
    
    
    
    
    
    
    
    
    
    
Issuance of common stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
 previously issuable
  - 
  - 
  - 
  - 
  - 
  - 
  2,575,746 
  258 
  (2,575,746)
  (258)
  - 
  - 
  - 
  - 
 
    
    
    
    
    
    
    
    
    
    
    
    
    
    
Conversion of Series A preferred
    
    
    
    
    
    
    
    
    
    
    
    
    
    
into common stock
  (3)
  - 
  - 
  - 
  - 
  - 
  54,076 
  5 
  - 
  - 
  (5)
  - 
  - 
  - 
 
    
    
    
    
    
    
    
    
    
    
    
    
    
    
Net loss
    
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  (1,547,616)
  (1,547,616)
Balance, March 31,2020
  19,786 
 $2 
  - 
 $- 
  284,000 
 $28 
  7,988,531 
 $797 
  42,135,687 
 $4,214 
 $25,001,625 
 $(4,500)
 $(33,991,499)
 $(8,989,333)
Conversion of convertible notes
  - 
  - 
  - 
  - 
  - 
  - 
  2,211,445 
  221 
  - 
  - 
  56,299 
  - 
  - 
  56,520 
 
    
    
    
    
    
    
    
    
    
    
    
    
    
    
Common shares issued for services
  - 
  - 
  - 
  - 
  - 
  - 
  78,000 
  8 
  206,667 
  21 
  27,579 
  - 
  - 
  27,608 
 
    
    
    
    
    
    
    
    
    
    
    
    
    
    
Series A preferred shares issuable
    
    
    
    
    
    
    
    
    
    
    
    
    
    
to talent agents in exchange for services
  - 
  - 
  118 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  135,617 
  - 
  - 
  135,617 
 
    
    
    
    
    
    
    
    
    
    
    
    
    
    
Return of Series A preferred shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
to treasury
  (118)
  - 
  - 
  - 
  - 
  - 
  - 
   
  - 
  - 
  - 
  - 
  - 
 
    
    
    
    
    
    
    
    
    
    
    
    
    
    
Common stock sold for cash
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  1,750,000 
  175 
  34,825 
  - 
  - 
  35,000 
 
    
    
    
    
    
    
    
    
    
    
    
    
    
    
Net loss
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  (733,613)
  (733,613)
 
    
    
    
    
    
    
    
    
    
    
    
    
    
    
Balance, June 30,2020
  19,668 
 $2 
  118 
 $- 
  284,000 
 $28 
  10,277,976 
 $1,026 
  44,092,354 
 $4,410 
 $25,255,945 
 $(4,500)
 $(34,725,112)
 $(9,468,201)
Common stock issuable under debt
    
    
    
    
    
    
    
    
restructuring agreement
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  63,275,243 
  6,328 
  5,049,356 
  - 
  - 
  5,055,684 
 
    
    
    
    
    
    
    
    
    
    
    
    
    
    
Common shares issuable for stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
issued for cash
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  500,000 
  50 
  24,950 
  - 
  - 
  25,000 
 
    
    
    
    
    
    
    
    
    
    
    
    
    
    
Common shares issued for services
  - 
  - 
  - 
  - 
  - 
  - 
  5,058,333 
  506 
  - 
  - 
  427,936 
  - 
  - 
  428,442 
 
    
    
    
    
    
    
    
    
    
    
    
    
    
    
Common shares issued towards
    
    
    
    
    
    
    
    
    
    
    
    
    
    
settlement of lawsuit
  - 
  - 
  - 
  - 
  - 
  - 
  750,000 
  75 
  - 
  - 
  16,550 
  - 
  - 
  16,625 
 
    
    
    
    
    
    
    
    
    
    
    
    
    
    
Common shares issued on conversion of
    
    
    
    
    
    
    
    
    
    
    
    
    
    
Series C preferred
  - 
  - 
  - 
  - 
  - 
  - 
  3,822,958 
  383 
  - 
  - 
  134,660 
  - 
  - 
  135,043 
 
    
    
    
    
    
    
    
    
    
    
    
    
    
    
Reclassification of common stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
previously issuable
  - 
  - 
  - 
  - 
  - 
  - 
  1,309,165 
  132 
  (1,309,165)
  (132)
  - 
  - 
  - 
  - 
 
    
    
    
    
    
    
    
    
    
    
    
    
    
    
Reclassifcation of Series A Preferred
    
    
    
    
    
    
    
    
    
    
    
    
    
    
previously issuable
  118 
  - 
  (118)
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
 
    
    
    
    
    
    
    
    
    
    
    
    
    
    
Net loss
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  (208,558)
  (208,558)
Balance, September 30,2020
  19,786 
 $2 
  0 
 $- 
  284,000 
 $28 
  21,218,432 
 $2,122 
  106,558,432 
 $10,656 
 $30,909,397 
 $(4,500)
 $(34,933,670)
 $(4,015,965)
 
See accompanying notes to consolidated financial statements
 
 
4
 
 
 
FRIENDABLE INC.
 
 
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT
 
 
For the three and nine months ended September 30,2019
 
 
(Unaudited)
 
 
 
 Series A Preferred Stock
 
 
Series B Preferred
 
 
 Common Stock
 
 
Additional
 
 
Common Stock
 
 
 
 
 
Total
 
 
 
Shares
 
 

 
 
Shares
 
 

 
 
Shares
 
 

 
 
Shares
 
 

 
 
Shares
 
 

 
 
Paid In
 
 
Subscription
 
 
Accumulated
 
 
Shareholders'
 
 
 
Issued
 
 
Amount
 
 
Issuable
 
 
Amount
 
 
Issuable
 
 
Amount
 
 
Issued
 
 
Amount
 
 
Issuable
 
 
Amount
 
 
Capital
 
 
Receivable
 
 
Deficit
 
 
Equity Deficit
 
Balance, December 31,2018
  21,267 
 $2 
  - 
 $- 
  21,267 
 $2 
  314,726 
 $31 
  - 
 $- 
 $12,027,043 
 $(4,500)
 $(22,260,473)
 $(10,237,897)
 
    
    
    
    
    
    
    
    
    
    
    
    
    
    
Debt forgiveness - related
    
    
    
    
    
    
    
    
    
    
    
    
    
    
parties
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  1,000,000 
  - 
  - 
  1,000,000 
 
    
    
    
    
    
    
    
    
    
    
    
    
    
    
Net loss
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  (380,289)
  (380,289)
Balance, March 31,2019
  21,267 
 $2 
  - 
  - 
  21,267 
  2 
  314,726 
 $31 
  - 
 $- 
 $13,027,043 
 $(4,500)
 $(22,640,762)
 $(9,618,186)
 
    
    
    
    
    
    
    
    
    
    
    
    
    
    
 
    
    
    
    
    
    
    
    
    
    
    
    
    
    
Net loss
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  (368,709)
  (368,709)
Balance, June 30,2019
  21,267 
 $2 
  - 
 $- 
  21,267 
 $2 
  314,726 
 $31 
  0 
 $- 
 $13,027,043 
 $(4,500)
 $(23,009,471)
 $(9,986,895)
 
    
    
    
    
    
    
    
    
    
    
    
    
    
    
Common stock subscriptions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
received
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  325,368 
  - 
  325,368 
 
    
    
    
    
    
    
    
    
    
    
    
    
    
    
Net loss
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  (1,169,318)
  (1,169,318)
Balance, September 30,2019
  21,267 
 $2 
    
    
  21,267 
 $2 
  314,726 
 $31 
  0 
 $- 
 $13,027,043 
 $320,868 
 $(24,178,789)
 $(10,830,845)
 
See accompanying notes to consolidated financial stat