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 June 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 ____.

 

333-222709

Commission File Number

 

Social Life Network, Inc.

(Exact name of small business issuer as specified in its charter)

 

NEVADA

 

46-0495298

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

 

3465 S Gaylord Ct. Suite A509

Englewood, Colorado 80113

(Address of principal executive offices)

 

(855) 933-3277

(Company’s telephone number, including area code)

 

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, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth 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 ☒

 

The Company has 2,621,735,483 common stock shares outstanding as of August 14, 2020.

 

 

 

 

TABLE OF CONTENTS

 

 

 

 

Page

 

 

 

 

 

 

 

PART I — FINANCIAL INFORMATION

 

F-1

 

 

 

 

 

 

ITEM 1.

Consolidated Financial Statements

 

F-1

 

ITEM 1A.

Risk Factors

 

3

 

ITEM 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

22

 

ITEM 3.

Quantitative and Qualitative Disclosures about Market Risk

 

35

 

ITEM 4.

Controls and Procedures

 

35

 

 

 

 

 

 

 

PART II — OTHER INFORMATION

 

36

 

 

 

 

 

 

ITEM 1.

Legal Proceedings

 

36

 

ITEM 2.

Unregistered Sales of Equity Securities and Use of Proceeds

 

36

 

ITEM 3.

Defaults Upon Senior Securities

 

36

 

ITEM 4.

Mine Safety Disclosures

 

36

 

ITEM 5.

Other Information

 

36

 

ITEM 6.

Exhibits

 

37

 

 

Signatures

 

38

 

 

 

2

Table of Contents

  

PART I – FINANCIAL INFORMATION

 

ITEM 1. Consolidated Financial Statements (Unaudited)

 

SOCIAL LIFE NETWORK, INC.

INDEX TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

 

Condensed Consolidated Balance Sheets

 

F-2

 

 

 

 

 

Condensed Consolidated Statements of Operations

 

F-3

 

 

 

 

 

Condensed Consolidated Statements of Stockholders’ Deficit

 

F-4

 

 

 

 

 

Condensed Consolidated Statements of Cash Flows

 

F-5

 

 

 

 

 

Notes to the Condensed Consolidated Financial Statements

 

F-6

 

 

 
F-1

Table of Contents

  

SOCIAL LIFE NETWORK, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)

 

 

 

June 30,

2020

 

 

December 31,

2019

 

ASSETS

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

Cash

 

$ 14,935

 

 

$ 6,057

 

Accounts receivable

 

 

15,500

 

 

 

20,500

 

Accounts receivable – related parties

 

 

333,500

 

 

 

257,500

 

Prepaid Expenses

 

 

6,864

 

 

 

20,933

 

Total Assets

 

$ 370,799

 

 

$ 304,990

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

 

Accounts Payable

 

$ 77,421

 

 

$ 15,724

 

Loans payable – related party

 

 

38,675

 

 

 

10,000

 

Other current liabilities

 

 

50,000

 

 

 

40,000

 

Deferred Revenue

 

 

13,041

 

 

 

29,396

 

Payroll Protection Program Loan plus accrued interest

 

 

163,111

 

 

 

-

 

Convertible debt plus accrued interest

 

 

462,792

 

 

 

616,179

 

Total Current Liabilities

 

 

805,040

 

 

 

711,299

 

Long Term Debt

 

 

-

 

 

 

-

 

Total Liabilities

 

 

805,040

 

 

 

711,299

 

 

 

 

 

 

 

 

 

 

Stockholders’ Equity (Deficit):

 

 

 

 

 

 

 

 

Common Stock A par value $0.001, 10,000,000,000 shares authorized, 1,330,794,686 and 125,358,319 shares issued and outstanding, respectively

 

 

1,330,810

 

 

 

140,791

 

Common Stock B par value $0.00, 400,000,000 shares authorized, 25,000,000 and 0 shares issued and outstanding, respectively

 

 

-

 

 

 

-

 

Additional paid in capital

 

 

30,122,222

 

 

 

31,016,394

 

Common Stock to be issued

 

 

-

 

 

 

-

 

Common Stock Receivable

 

 

-

 

 

 

-

 

Preferred Stock par value $0.00, 300,000,000 shares authorized, 0 and 0 shares issued and outstanding, respectively

 

 

-

 

 

 

-

 

Accumulated deficit

 

 

(31,887,273 )

 

 

(31,563,493 )

Total Stockholders’ Equity (Deficit)

 

 

(434,241 )

 

 

(406,308 )

Total Liabilities and Stockholders’ Equity

 

$ 370,799

 

 

$ 304,990

 

 

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

 

 
F-2

Table of Contents

  

SOCIAL LIFE NETWORK, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

 

 

 

For the Three Months Ended
June 30,

 

 

For the Six Months Ended
June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Digital subscription revenue

 

$ 7,292

 

 

$ -

 

 

$ 16,354

 

 

$ -

 

Digital marketing revenue

 

 

-

 

 

 

55,200

 

 

 

-

 

 

 

55,200

 

Advertising revenue

 

 

-

 

 

 

-

 

 

 

-

 

 

 

2,500

 

Licensing revenue

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Licensing revenue – related party

 

 

62,500

 

 

 

-

 

 

 

125,000

 

 

 

25,000

 

Event revenue

 

 

-

 

 

 

75,985

 

 

 

-

 

 

 

75,985

 

Sales returns

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Total revenue

 

 

69,792

 

 

 

131,185

 

 

 

141,354

 

 

 

158,685

 

Costs of goods sold

 

 

(10,744 )

 

 

181,934

 

 

 

(8,679 )

 

 

183,466

 

Gross margin

 

 

80,536

 

 

 

(50,749 )

 

 

150,033

 

 

 

(24,781 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation expense

 

 

113,491

 

 

 

395,437

 

 

 

279,969

 

 

 

696,115

 

Non-cash stock expense

 

 

-

 

 

 

774,988

 

 

 

-

 

 

 

1,801,333

 

Warrant expense

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Sales and marketing

 

 

2,650

 

 

 

37,115

 

 

 

8,282

 

 

 

108,655

 

General and administrative

 

 

77,815

 

 

 

119,418

 

 

 

129,402

 

 

 

234,314

 

Total operating expenses

 

 

193,956

 

 

 

1,326,958

 

 

 

417,653

 

 

 

2,840,417

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (Loss) from operations

 

 

(113,420 )

 

 

(1,377,707 )

 

 

(267,620 )

 

 

(2,840,417 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

32,062

 

 

 

5,024

 

 

 

60,563

 

 

 

5,024

 

Other non-operating expenses (income)

 

 

(44,693 )

 

 

37,500

 

 

 

4,404

 

 

 

37,500

 

Total other expenses

 

 

12,630

 

 

 

42,524

 

 

 

(56,159 )

 

 

42,524

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income (Loss)

 

$ (100,789 )

 

$ (1,420,231 )

 

$ (323,779 )

 

$ (2,907,722 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) per share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

(0.00 )

 

 

(0.01 )

 

 

(0.00 )

 

 

(0.02 )

Diluted

 

$ (0.00 )

 

$ (0.01 )

 

$ (0.00 )

 

$ (0.02 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Basic

 

 

1,330,794,686

 

 

 

125,358,319

 

 

 

1,330,794,686

 

 

 

125,358,319

 

 Diluted

 

 

8,195,270,924

 

 

 

127,190,672

 

 

 

8,195,270,924

 

 

 

127,190,672

 

  

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

 

 
F-3

Table of Contents

  

SOCIAL LIFE NETWORK, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY (DEFICIT)

(unaudited)

 

 

 

Common Stock B

 

 

Common Stock A

 

 

Additional Paid in

 

 

Common Stock to

 

 

Common Stock

 

 

Accumulated

 

 

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

be Issued

 

 

Receivable

 

 

Deficit

 

 

Total

 

Balance, December 31, 2018

 

 

-

 

 

 

-

 

 

 

117,817,319

 

 

$ 117,817

 

 

$ 27,763,019

 

 

$ 25,000

 

 

$ -

 

 

$ (27,705,545 )

 

$ 200,291

 

Common stock issued for services               

 

 

-

 

 

 

-

 

 

 

3,750,000

 

 

 

3,750

 

 

 

1,207,595

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1,211,345

 

Common stock issued for services to officers

 

 

-

 

 

 

-

 

 

 

500

 

 

 

49,500

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

50,000

 

Fair value of warrants issued

 

 

-

 

 

 

--

 

 

 

-

 

 

 

-

 

 

 

292,500

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

292,500

 

Common stock sold for cash

 

 

-

 

 

 

-

 

 

14,025,529

 

 

 

14,025

 

 

 

1,362,315

 

 

 

(25,000 )

 

 

-

 

 

 

-

 

 

 

1,350,340

 

Common stock from conversion of debt        

 

 

-

 

 

 

-

 

 

 

284,373

 

 

 

284

 

 

 

9,716

 

 

 

 

 

 

 

-

 

 

 

-

 

 

 

10,000

 

Beneficial conversion feature

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

429,600

 

 

 

 

 

 

 

-

 

 

 

-

 

 

 

429,600

 

Common stock from warrant conversion               

 

 

-

 

 

 

-

 

 

 

4,400

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

4,400

 

Net Loss for the year ended December 31, 2019

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(3,857,948 )

 

 

(3,857,948 )

Balance, December 31, 2019

 

 

-

 

 

$ -

 

 

 

140,777,231

 

 

$ 140,791

 

 

$ 31,016,394

 

 

$ -

 

 

 

-

 

 

$ (31,563,493 )

 

$ (406,308 )

Common stock issued for service

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Common stock issued to officers

 

 

25,000,000

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Common stock issued to investors

 

 

-

 

 

 

-

 

 

 

415,470,876

 

 

 

415,471

 

 

 

(120,825 )

 

 

-

 

 

 

-

 

 

 

-

 

 

 

294,646

 

Common stock cancelled

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Fair value of warrants issued

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Net Loss for quarter ended March 31, 2020

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(222,990 )

 

 

(222,990 )

Balance, March 31, 2020

 

 

25,000,000

 

 

 

-

 

 

 

556,248,107

 

 

 

566,263

 

 

$ 30,895,559

 

 

$ -

 

 

$ -

 

 

$ (31,786,483 )

 

$ (334,652 )

Common stock issued for service

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

--

 

 

 

-

 

 

 

-

 

Common stock issued to officers

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Common stock issued to investors

 

 

-

 

 

 

-

 

 

 

774,546,579

 

 

 

774,547

 

 

 

(773,347 )

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1,200

 

Common stock cancelled

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Fair value of warrants issued

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Net Loss for quarter ended June 30, 2020

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(100,789 )

 

 

(100,789 )

Balance, June 30, 2020

 

 

25,000,000

 

 

 

-

 

 

 

1,330,794,686

 

 

 

1,330,810

 

 

 

30,122,222

 

 

 

-

 

 

 

-

 

 

 

(31,887,272 )

 

 

(434,241 )

 

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

 

 
F-4

Table of Contents

 

SOCIAL LIFE NETWORK, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

 

 

 

For the Six Months Ended
June 30,

 

 

 

2020

 

 

2019

 

Cash flow from operating activities:

 

 

 

 

 

 

Net Income (Loss)

 

$ (323,779 )

 

$ (2,907,721 )

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

 

Stock based compensation

 

 

-

 

 

 

1,041,345

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(76,000 )

 

 

(5,500 )

Prepaids

 

 

14,070

 

 

 

(35,597 )

Accounts payable and accrued expenses

 

 

93,741

 

 

 

243,653

 

Net cash used in operating activities

 

 

(291,968 )

 

 

(1,663,820 )

 

 

 

 

 

 

 

 

 

Cash flows used in investing activities:

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Proceeds from the sale of common stock - private placement

 

 

-

 

 

 

989,988

 

Proceeds from the sale of common stock - convertible note

 

 

295,846

 

 

 

275,889

 

Proceeds from the sale of common stock - warrants

 

 

-

 

 

 

232.500

 

Net cash provided by financing activities

 

 

295,846

 

 

 

1,498,377

 

 

 

 

 

 

 

 

 

 

Net increase / decrease in cash

 

 

3,878

 

 

 

(165,443 )

Cash at beginning of period

 

 

11,557

 

 

 

195,051

 

Cash at end of period

 

$ 15,435

 

 

$ 29,608

 

 

 

 

 

 

 

 

 

 

Supplemental Disclosures:

 

 

 

 

 

 

 

 

Cash paid during the year for:

 

 

 

 

 

 

 

 

Interest

 

$ 60,563

 

 

 

5,024

 

Income taxes

 

$ -

 

 

$ -

 

Supplemental disclosure of non-cash activities:

 

 

 

 

 

 

 

 

Warrants issued for services

 

$ -

 

 

$ -

 

Interest related to amortization of beneficial conversion feature

 

 

-

 

 

 

-

 

 

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

  

 
F-5

Table of Contents

  

SOCIAL LIFE NETWORK, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

June 30, 2020

(unaudited)

 

NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS

 

Social Life Network, Inc. (the “Company”) is a technology company that licenses its Social Life Network SaaS (Software as a Service) Internet Platform (hereafter referred to as the “Platform”) to niche industries for an annual license fee and/or a percentage of profits. The Platform is a cloud-based social network and virtual conferencing system that can be customized to suit virtually any niche industry, such as the alternative medicine industry, from which we generate revenue through MjLink.com, Inc (hereafter referred to as “MjLink”), a subsidiary of the Company.

 

The Company’s history began as C J Industries, Inc., incorporated in the State of California on August 30, 1985. On February 24, 2004, the Company merged with Calvert Corporation, a Nevada Corporation, changing its name to Sew Cal Logo, Inc., and moving its domicile to Nevada.

 

In June 2014, the Company was placed into receivership in Nevada’s 8th Judicial District (White Tiger Partners, LLC et al v. Sew Cal Logo, Inc.et al, Case No A-14-697251-C) (Dept. No.: XIII) (the “Receivership”).

 

On January 29, 2016, the Company, as the seller (the “Seller”), completed a business combination/merger agreement (the “Agreement”) with the buyer, Life Marketing, Inc., a Colorado corporation (the “Buyer”), its subsidiaries and holdings and all of the Buyer’s securities holders. The Company acted through the court-appointed receiver and White Tiger Partners, LLC, the Company’s judgment creditor. The Agreement provided that the then current owners of the private company, Life Marketing, Inc., become the majority shareholders pursuant to which an aggregate of 119,473,334 common stock shares were issued to the Company’s officers, composed of 59,736,667 shares each to the Company’s Chief Executive Officer, Kenneth Tapp, and Andrew Rodosevich, the Company’s then-Chief Financial Officer. Pursuant to the terms of the Agreement and related corporate actions in the Company’s domicile, Nevada:

 

 

The Company cancelled all previously created preferred class of stock;

 

 

 

 

The Company delivered newly issued, common stock shares equivalent to approximately 89.5% of its outstanding shares as a control block in exchange for 100% of the Buyer’s outstanding shares;

 

 

 

 

The court appointed receiver sold its judgment to the Buyer and the Seller agreed to pay the receiver $30,000 and the equivalent of 9.99% of the outstanding stock (post-merger) of the newly issued unregistered exempt shares;

 

 

 

 

The Company’s then officers and directors were terminated, and Kenneth Tapp and Andrew Rodosevich became its Chief Executive Officer/Director and Chief Financial Officer/Director, respectively;

 

 

 

 

The Company effected a 5,000 to 1 reverse stock split effective April 11, 2016, with each shareholder retaining a minimum of 100 shares;

 

 

 

 

The Company changed its name from Sew Cal Logo, Inc. to WeedLife, Inc, and then to Social Life Network, Inc. effective in Nevada on April 11, 2016;

 

 

 

 

The Company changed its stock symbol from SEWC to WDLF;

 

 

 

 

The Company decreased its authorized common stock shares from 2,000,000,000 shares to 500,000,000 shares, effective on March 17, 2016.

 

On June 6, 2016, the Court issued an order in the Receivership pursuant to Section 3(a) (10) of the Securities Act of 1933, as amended (the “Securities Act”), ratifying the above actions. The receiver was discharged on June 7, 2016.

 

On September 20, 2018, the Company incorporated MjLink.com, Inc., a Delaware Corporation, as a subsidiary.

 

MjLink.com Inc. – Subsidiary

 

Prior to its incorporation in Delaware on September 20, 2018, MjLink functionally operated as the Company’s cannabis division. As of the date of this filing, the Company has 800,000 Class A shares of MjLink.com, Inc. MjLink is currently raising capital at $1 per share through a Reg D 506(c) offering. MjLink also filed a Form 1-A in February of 2020 to qualify for a Reg A Tier 2 offering to raise up to $50,000,000 at $2.50 a share. On August 7th, 2020 MjLink filed its 4th amended Form 1-A with the SEC.

 

MjLink.com is a leading social networking platform and SaaS company that has in part helped expedite the growth of the cannabis industry worldwide. MjLink is one of the largest cannabis and hemp technology platforms for connecting professionals and consumers together. 
MjLink’s technology platform consists of four separate and unique private social networks in the entire MjLink network. In total, the MjLink network provides the cannabis industry with a singular platform for social networking, product and dispensary search, digital content distribution, advertising, video conferencing and virtual investment conferences, mobile app and website building tools, learning management, and online event solutions.

 

Neither the Company or MjLink cultivate, dispense or sell hemp, cannabis or any derivatives of the cannabis plant, such as infused products. As of the date of this filing, the Company generates revenue from MjLink through a combination of licensing of the Company platform and a percentage of fees generated from advertising and SaaS subscriptions sold.

 

 
F-6

Table of Contents

 

Our Business

 

Business of Social Life Network, Inc. (Software as a Service - SaaS)

 

The Company is an artificial intelligence (AI) powered social networking company, that develops custom niche industry social networks to be used to connect global business professionals and consumers. The Company’s platform leverages blockchain technology to increase speed, security and accuracy of its niche Social Network Marketplaces, (hereafter referred to as the “Platform”). The Platform is a cloud-based system that can be accessed by a web browser or mobile application that allows end-users to socially connect with one another and their customers to market and advertise their products and services.

 

As of the date of this filing, the Company’s Platform is accessed by multiple industries in over 120 countries, and is translated in English, German, Hungarian, Portuguese, Turkish, Polish, Russian, Swedish, Slovenian, French, Dutch, Portuguese, Czech, Persian, Ukrainian, Vietnamese, Romanian, Spanish, Italian and Japanese. The Company’s Platform licensing agreements are for a minimum of one year. The Company’s fee structure includes a combination of annual fees and/or a minimum percentage of the net profits from the Company’s licensees that are generating revenue from monthly subscriptions services or fees from their platform users. 

  

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of presentation

 

The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

 

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. Significant estimates include the estimated useful lives of property and equipment. Actual results could differ from those estimates.

 

Concentrations of Credit Risk

 

The Company maintains its cash in bank deposit accounts, the balances of which at times may exceed federally insured limits. The Company continually monitors its banking relationships and consequently have not experienced any losses in our accounts. The Company believes it is not exposed to any significant credit risk on cash.

 

Cash equivalents

 

The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. There were no cash equivalents for the period ended June 30, 2020 and year ended December 31, 2020.

 

Accounts Receivable

 

Revenues that have been recognized but not yet received are recorded as accounts receivable. Losses on receivables will be recognized when it is more likely than not that a receivable will not be collected. An allowance for estimated uncollectible amounts will be recognized to reduce the amount of receivables to its net realizable value when considered necessary. Any allowance for uncollectible amounts is evaluated quarterly.

 

 
F-7

Table of Contents

  

Fair value of financial instruments

 

The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (U.S. GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:

 

Level 1:

Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.

 

 

Level 2:

Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.

 

 

Level 3:

Pricing inputs that are generally observable inputs and not corroborated by market data.

 

The carrying amount of the Company’s financial assets and liabilities, such as cash, prepaid expenses and accrued expenses approximate their fair value because of the short maturity of those instruments. The Company’s notes payable approximates the fair value of such instruments based upon management’s best estimate of interest rates that would be available to the Company for similar financial arrangements at December 31, 2019.

 

The Company does not have any assets or liabilities measured at fair value on a recurring or a non-recurring basis as of June 30, 2020 and December 31, 2019.

 

Revenue recognition

 

The Company follows paragraph 605-15-25 of the FASB Accounting Standards Codification for revenue recognition when the right of return exists. The Company will recognize revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) the seller’s price to the buyer is substantially fixed or determinable at the date of sale, (ii) the buyer has paid the seller, or the buyer is obligated to pay the seller and the obligation is not contingent on resale of the product. If the buyer does not pay at time of sale and the buyer’s obligation to pay is contractually or implicitly excused until the buyer resells the product, then this condition is not met., (iii) the buyer’s obligation to the seller would not be changed in the event of theft or physical destruction or damage of the product, (iv) the buyer acquiring the product for resale has economic substance apart from that provided by the seller. This condition relates primarily to buyers that exist on paper, that is, buyers that have little or no physical facilities or employees. It prevents entities from recognizing sales revenue on transactions with parties that the sellers have established primarily for the purpose of recognizing such sales revenue, (v) the seller does not have significant obligations for future performance to directly bring about resale of the product by the buyer, and (vi) the amount of future returns can be reasonably estimated.

 

The Company generates revenues through three primary sources: 1) licensing agreements from which the Company receives an annual license fee or a percentage of net profits; 2) online advertising with priced based on the CPC (cost per click) and CPM (cost per 1000 ad impressions); and 3) premium monthly digital marketing subscriptions, which provide business director and online review management for monthly subscriptions.

 

Income taxes

 

The Company follows Section 740-10-30 of the FASB Accounting Standards Codification, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the fiscal year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the fiscal years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the Statements of Income in the period that includes the enactment date.

 

 
F-8

Table of Contents

 

On December 22, 2018, the Tax Cuts and Jobs Act (TCJA) was signed into law by the President of the United States. TCJA is a tax reform act that among other things, reduced corporate tax rates to 21 percent effective January 1, 2018. FASB ASC 740, Income Taxes, requires deferred tax assets and liabilities to be adjusted for the effect of a change in tax laws or rates in the year of enactment, which is the year in which the change was signed into law. Accordingly, the Company adjusted its deferred tax assets and liabilities at December 31,2019, using the new corporate tax rate of 21 percent. See Note 7.

 

The Company adopted section 740-10-25 of the FASB Accounting Standards Codification (“Section 740-10-25”) with regards to uncertainty income taxes. Section 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Section 740-10-25 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. The Company had no material adjustments to its liabilities for unrecognized income tax benefits according to the provisions of Section 740-10-25.

 

Stock-based Compensation

 

The Company accounts for equity-based transactions with nonemployees under the provisions of ASC Topic No. 505-50, Equity-Based Payments to Non-Employees (“ASC 505-50”). ASC 505-50 establishes that equity-based payment transactions with nonemployees shall be measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. The fair value of common stock issued for payments to nonemployees is measured at the market price on the date of grant. The fair value of equity instruments, other than common stock, is estimated using the Black-Scholes option valuation model. In general, we recognize the fair value of the equity instruments issued as deferred stock compensation and amortize the cost over the term of the contract.

 

The Company accounts for employee stock-based compensation in accordance with the guidance of FASB ASC Topic 718, Compensation—Stock Compensation, which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair values. The fair value of the equity instrument is charged directly to compensation expense and credited to additional paid-in capital over the period during which services are rendered.

 

Basic and Diluted Earnings Per Share

 

Net income (loss) per common share is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock and potentially outstanding shares of common stock during the period. The weighted average number of common shares outstanding and potentially outstanding common shares assumes that the Company incorporated as of the beginning of the first period presented.

 

As of June 30, 2020, and December 31, 2019, the Company had 8,195,270,924 and 16,300,020 potentially dilutive shares; however, the diluted loss per share is the same as the basic loss per share for the years ended June 30, 2020, and December 31, 2019, as the inclusion of any potential shares would have had an antidilutive effect due to the Company’s loss from operations.

   

 
F-9

Table of Contents

  

Recently issued accounting pronouncements

 

In January 2018, the FASB issued ASU 2018-01, Business Combinations (Topic 805) Clarifying the Definition of a Business. The amendments in this update clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions or disposals of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The guidance is effective for interim and annual periods beginning after December 15, 2018 and should be applied prospectively on or after the effective date. The Company is in the process of evaluating the impact of this accounting standard update.

 

In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, which requires restricted cash to be presented with cash and cash equivalents on the statement of cash flows and disclosure of how the statement of cash flows reconciles to the balance sheet if restricted cash is shown separately from cash and cash equivalents on the balance sheet. ASU 2016-18 is effective for interim and annual periods beginning after December 15, 2018, with early adoption permitted. The Company is in the process of evaluating the impact of this accounting standard update on its financial statements.

 

In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfer of Assets Other than Inventory, which requires the recognition of the income tax consequences of an intra-entity transfer of an asset, other than inventory, when the transfer occurs. ASU 2016-16 is effective for interim and annual periods beginning after December 15, 2018, with early adoption permitted. The Company is in the process of evaluating the impact of this accounting standard update on its financial statements.

 

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments. ASU 2016-15 provides guidance for targeted changes with respect to how cash receipts and cash payments are classified in the statements of cash flows, with the objective of reducing diversity in practice. ASU 2016-15 is effective for interim and annual periods beginning after December 15, 2018, with early adoption permitted. The Company is in the process of evaluating the impact of this accounting standard update on its statements of cash flows.

 

In March 2016, the FASB issued ASU 2016-09, Stock Compensation (Topic 718), Improvements to Employee Share-Based Payment Accounting. ASU 2016-09, which amends several aspects of accounting for employee share-based payment transactions including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, and classification in the statement of cash flows. ASU 2016-09 is effective for fiscal years beginning after December 15, 2016 and interim periods within annual periods beginning after December 15, 2016, with early adoption permitted. The Company has evaluating the impact of this accounting standard update and noted that it has had no material impact.

 

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 requires lessees to recognize lease assets and lease liabilities on the balance sheet and requires expanded disclosures about leasing arrangements. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018 and interim periods in fiscal years beginning after December 15, 2018, with early adoption permitted. The Company is in the process of evaluating the impact of this accounting standard update on its financial statements.

 

In May 2014, August 2015, April 2016 and May 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2014-09 (ASC Topic 606), Revenue from Contracts with Customers, ASU 2015-14 (ASC Topic 606) Revenue from Contracts with Customers, Deferral of the Effective Date, ASU 2016- from Contracts with Customers, ASU 2015-14 (ASC Topic 606) Revenue from Contracts with Customers, Deferral of the Effective Date, ASU 2016-10 (ASC Topic 10 (ASC Topic 606) Revenue from Contracts with Customers, Identifying Performance Obligations and Licensing, and ASU 2016-12 (ASC Topic 606) Revenue from Contracts with 606) Revenue from Contracts with Customers, Identifying Performance Obligations and Licensing, and ASU 2016-12 (ASC Topic 606) Revenue from Contracts with accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. It also requires entities to disclose both quantitative and qualitative information that enable financial statements users to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The amendments in these ASUs are effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. Early adoption is permitted for annual periods beginning after December 15, 2016. The Company is in the process of assessing the impact, if any, on its financial statements.

 

 
F-10

Table of Contents

 

In January 2017, the FASB issued Accounting Standards Update No. 2017-01 (ASU 2017-01) “Business Combinations (Topic 805): Clarifying the Definition of a Business.” ASU 2017-01 provides guidance to evaluate whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. If substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single asset or a group of similar assets, the assets acquired (or disposed of) are not considered a business. We adopted ASU 2017-01 as of January 1, 2017 on a prospective basis and there was no material impact to our consolidated financial statements.

 

The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

 

NOTE 3 – GOING CONCERN

 

The Company’s unaudited financial statements have been prepared on a going concern basis, which assumes that the Company will be able to realize its assets and discharge its liabilities and commitments in the normal course of business for the foreseeable future. The Company had an accumulated deficit of $31,887,273 at June 30, 2020, had a net loss of $323,779, and gained net cash of $3,878 in operating activities for the six months ended June 30, 2020. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent upon its generating profitable operations in the future and/or to obtain the necessary financing to meet obligations and repay liabilities arising from normal business operations when they come due. The Company’s management intends to finance operating costs over the next nine months with existing cash on hand and public issuance of common stock. While the Company believes that it will be successful in obtaining the necessary financing and generating revenue to fund its operations, meet regulatory requirements and achieve commercial goals, there are no assurances that such additional funding will be achieved or that the Company will succeed in its future operations. The financial statements of the Company do not include any adjustments that may result from the outcome of these uncertainties.

 

NOTE 4 – RELATED PARTY TRANSACTIONS

 

Other than as disclosed below, there has been no transaction, since January 1, 2020, or currently proposed transaction, in which the Company was or is to be a participant and the amount involved exceeds $5,000, being the lesser of $120,000 or one percent of our total assets at June 30, 2019, and in which any of the following persons had or will have a direct or indirect material interest:

 

 

(a)

any director or executive officer of our company;

 

 

 

 

(b)

any person who beneficially owns, directly or indirectly, more than 5% of any class of our voting securities;

 

 

 

 

(c)

any person who acquired control of our company when it was a shell company or any person that is part of a group, consisting of two or more persons that agreed to act together for the purpose of acquiring, holding, voting or disposing of our common stock, that acquired control of our company when it was a shell company; and

 

 

 

 

(d)

any member of the immediate family (including spouse, parents, children, siblings and in- laws) of any of the foregoing persons.

 

On January 2, 2019, the Company completed an employment agreement with George Jage, President of MjLink, providing him with the ability to receive the Company’s stock. The agreement provides that if Mr. Jage resigns as MjLink’s President during the first 24 months of the employment agreement, all stock previously issued to him are required to be returned to MjLink’s treasury. On June 26, 2019, George Jage resigned from the Company, and no stock was issued to him.

 

On February 6, 2019, we authorized an additional 500,000 restricted common stock shares to Mark DiSiena, our Chief Financial Officer, valued at $50,000. The shares were issued during the three months ended March 31, 2019.

  

 
F-11

Table of Contents

 

The Company has software license agreements with Real Estate Social Network, Inc. and Sports Social Network, which provides that the Company’s licensees pay the Company each a license fee of $125,000 or $250,000 combined fees per year or a period of two years and thereafter receive a 20% percentage of profits. The Company’s Chief Executive Officer, Kenneth Tapp, owns 2.5% of our outstanding shares and is also the Chief Technology Officer of Real Estate Social Network and Sports Social Network and owns approximately 40% each of those entities through LVC Consulting, LLC, of which he is the sole member. As of June 30, 2020, the Company’s largest source of the Company’s revenues was $125,000 in social network platform licensing revenues, which constituted 89.6% of our total revenues and were derived solely from the only 2 licensees the Company has agreements with, the Real Estate Social Network and Sports Social Network, which revenues are related party revenues.

 

Pricing for the license agreements were negotiated with the Chief Executive Officers of Real Estate Social Network and Sports Social Network using a “Royalty Flex-Rate” method per network end-user. The Company’s Chief Executive Officer and prior-Chief Financial Officer represented it in the negotiations with Real Estate Social Network and Sports Social Network in our negotiations involving the license agreements.

 

This type of licensing is the standard when licensing intellectual property per users. The rates were determined by existing users in the Sports Social Network, and future predicted users in the Real Estate Social Network. We researched competing Social Network licensing platforms for pricing and features, and determined that the most similar to our Network Platform was SocialShared.com (https://www.socialshared.com/plans.html), which currently provides the United States Tennis Association with their own social network (Setteo.com) for $2.25 per month per end-user, and a competitor to the Sports Social Network, Inc. website, RacketStar.com

 

NOTE 5 – SALES RETURNS

 

For the period ended June 30, 2020, the Company did not issue any credit memos.

 

NOTE 6 – STOCK WARRANTS

 

During the six months ended June 30, 2020 and the years ended December 31, 2019, 2018, the Company granted zero, 1,594,853, and zero warrants, respectively, to the Company’s advisors and employees, totaling 17,894,873 warrants (the “17,894,873 Warrants”). Each warrant entitles the holder to one Social Life Network common stock share at an exercise price ranging from five to twenty cents, with a weighted average price of seven cents. The term of the Company’s warrants has a range from 3 to 5 years from the initial exercise date. The warrants will be expensed as they become exercisable beginning January 1, 2018 through April 11, 2024. During the three months ended September 30, 2019, 300,000 additional warrants vested, and as of September 30, 2019 the 17,894,873 Warrants are 100% vested. During the twelve months ended December 31, 2019, the Company executed a cashless conversion of 8,800,020 vested warrants in exchange for 4,400,010 common stock shares. The remaining 9,094,853 outstanding warrants are currently 100% vested to date and not exercised. The aggregate fair value of the warrants as of June 30, 2020 total $2,244,800, which values are based on the Black-Scholes-Merton pricing model using the following estimates: exercise price ranging from $0.00 to $0.20, stock prices ranging from $0.0001 to $0.38, risk free rates ranging from 0.16% - 1.60%, volatility ranging from 391% to 562%, and expected life of the warrants ranging from 3 to 5 years.

 

 
F-12

Table of Contents

 

A summary of the status of the outstanding stock warrants and changes during the periods is presented below:

 

 

 

Shares available to purchase with warrants

 

 

Weighted Average Price

 

 

Weighted Average Fair Value

 

 

 

 

 

 

$ -

 

 

 

 

Exercisable, December 31, 2018

 

 

16,300,000

 

 

$ 0.05

 

 

$ -

 

Issued

 

 

1,594,853

 

 

 

0.18

 

 

$ -

 

Exercised

 

 

8,800,020

 

 

$ 0.00

 

 

$ -

 

Expired

 

 

-

 

 

 

 

 

 

$ -

 

Outstanding, December 31, 2019

 

 

9,904,853

 

 

$ 0.07

 

 

$ -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exercisable, December 31, 2019

 

 

9,904,853

 

 

$ 0.07

 

 

$ -

 

Issued

 

 

-

 

 

 

-

 

 

 

-

 

Exercised

 

 

-

 

 

 

-

 

 

 

-

 

Expired

 

 

-

 

 

 

-

 

 

 

-

 

Outstanding, March 31, 2020

 

 

9,904,853

 

 

$ 0.07

 

 

$ -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exercisable, March 31, 2020

 

 

9,904,853

 

 

 

0.07

 

 

 

 

 

Issued

 

 

-

 

 

 

-

 

 

 

 

 

Exercised

 

 

-

 

 

 

-

 

 

 

 

 

Expired

 

 

-

 

 

 

-

 

 

 

 

 

Outstanding, June 30, 2020

 

 

9,904,853

 

 

 

0.07

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exercisable, June 30, 2020

 

 

9,904,853

 

 

$ 0.07

 

 

$ 0.32

 

 

 

Range of Exercise Prices

 

Number Outstanding
6/30/2020

 

 

Weighted Average Remaining
Contractual Life

 

Weighted Average
Exercise Price

 

$

0.00–0.20

 

 

9,904,853

 

 

2.92 years

 

$ 0.07

 

 

NOTE 7 – COMMON STOCK AND CONVERTIBLE DEBT

 

Common Stock

 

Class A

 

On January 2, 2019, the Company completed an employment agreement with George Jage, President of MjLink, providing him with the ability to receive stock of the Company. The agreement provides that if Mr. Jage resigns as MjLink’s President during the first 24 months of the employment agreement, all stock previously issued to him are required to be returned to MjLink’s treasury. On June 26, 2019, George Jage resigned from the Company as well as MjLink and no stock was issued to him.

 

On February 6, 2019, the Company authorized the issuance of 500,000 common stock shares to Mark DiSiena, Chief Financial Officer, for his CFO services; 1,000,000 common stock shares to Frederick M. Lehrer for his legal services as an independent contractor; and 50,000 common stock shares to the Company’s employee, Kelsey Higgins, for her marketing services. The shares are valued at $0.10, the closing stock price on the date of grant, for total non-cash expense of $155,000. The shares were issued during the three months ended March 31, 2019.

 

From January 1, 2019 thru March 31, 2019, the Company entered into subscription agreements with 9 accredited investors. The Company sold 5,725,000 common stock shares to the accredited investors, of which 1,200,009 common stock shares were sold at $0.05 per share for total gross proceeds of $60,000, and 4,025,000 common stock shares were sold at $0.10 per share for total gross proceeds of $402,500; as of March 31, 2019, the Company received $382,500 out of the $462,500, with $80,000 remaining, which was paid on April 17, 2019. Accordingly, 3,700,000 of the 5,725,000 shares were issued by March 31, 2019, 1,625,000 were issued by June 30, 2019, and 400,000 remaining shares were issued during the three months ended December 31, 2019.

 

On April 2, 2019, the Company issued 500,000 common stock shares to an employee. The shares are valued at $0.10, the closing stock price on the date of grant, for total non-cash expense of $50,000. The shares were issued during the three months ended December 31, 2019.

 

On April 15, 2019, the Company completed a Common Stock Purchase Agreement and other related documents with a funding group to generate $750,000 in additional available resources, earmarking the proceeds of $750,000 for the Company’s MjLink. In connection with this agreement, the Company issued 300,000 common stock shares to a non-profit affiliate of the funding group. On April 20, 2019, the Board of Directors determined not to deliver any purchase notices to this funding group going forward, setting forth the purchase notice common shares that the Company would have otherwise required the funding group to purchase.

 

 
F-13

Table of Contents

 

On April 15, 2019, the Company completed a Standby Equity Commitment Agreement and other related documents with an investor group to generate $3 million in additional available cash resources with the Investor committed to purchase up to three million of the Company’s common stock from time-to-time over the course of 36 months with reselling limitations. In connection therewith, the Company issued 882,353 common stock shares plus 882,353 common stock warrants and reserved 16,900,000 restricted common shares for conversion. The 882,353 common stock shares will be issued during 2020.

 

On May 9, 2019, the Company issued 2,850,000 common stock shares to three professionals for their services. The shares are valued at $0.10, the closing stock price on the date of grant, for total non-cash expense of $285,000. The shares were issued during the three months ended June 30, 2019.

 

For the quarter ending September 30, 2019, the Company issued 350,000 common shares to several lenders as inducement for their services. The shares are valued from $0.10 to $0.17, the closing price of the date of convertible debt liability, for a total non-cash expense of $46,500. The shares were issued during the six months ended September 30, 2019.

 

For the quarter ending December 31, 2019, the Company issued 2,200,000 stock shares to three professionals for their services. The shares are valued at $0.10, the closing stock price on the date of grant, for total non-cash expense of $220,000. In addition, the Company entered into subscription agreements with 6 accredited investors. The Company sold 3,550,000 common stock shares to the accredited investors at $0.10 per share for total gross proceeds of $355,000. As of March 31, 2020, the Company received all the funds. The Company also issued 102,176 common shares to a single lender as inducement for their services at $0.00. Lastly, one lender converted their debt into 284,373 common shares at $0.04 for a value of $10,000. These shares were all issued during the three months ended March 31, 2020.

 

For the quarter ending March 31, 2020, several lenders converted their debt into 415,479,876 common shares at an average of $0.0014 for a value of $232,257.

 

After unanimous Board of Director approval and Shareholder Approval by consent of over 51% of the Company’s outstanding shares, filing of the Company’s Definitive Information Statement, and notice to shareholders, the Company filed an Amended and Restated Articles of Incorporation to increase its authorized shares with the State of Nevada, which was approved by the State of Nevada on March 4, 2020, and increased the Company’s authorized Common Stock Shares to 2.5 billion shares.

 

After unanimous Board of Director approval and Shareholder Approval by consent of over 51% of the Company’s outstanding shares, filing of the Company’s Definitive Information Statement and notice to shareholders, the Company filed Amended and Restated Articles of Incorporation (“Amended Articles”) to increase its authorized shares with the State of Nevada, which was approved by the State of Nevada on May 8, 2020, which amended articles increased the Company’s authorized Class A Common Stock Shares to Ten Billion (10,000,000,000) Shares, Class B Common Stock Shares to Four Hundred Million (400,000,000) Shares, and the Preferred Shares to Three Hundred Million (300,000,000) Shares. Additionally, the Amended Articles authorized the Company from May 8, 2020 and continuing until March 31, 2021, as determined by the Company’s Board of Directors in its sole discretion, to effect a Reverse Stock Split of not less than 1 share for every 5,000 shares and no more than 1 share for every 25,000 shares.

 

For the quarter ending June 30, 2020, several lenders converted their debt into 774,546,579 common shares at an average of $0.0009 for a value of $44,693.

 

Class B

 

Effective March 4, 2020, the Company’s Board authorized the issuance of twenty five million (25,000,000) Class B Common Stock Shares to Ken Tapp, the Company’s Chief Executive Officer, in return for his services as the Company’s Chief Executive Officer from February 1, 2016 to February 29, 2020, which shares are equal to two billion five hundred million (2,500,000,000) votes and have no equity, cash value or any other value. As of the date of this filing, our Chief Executive Officer controls 95.35% of shareholder votes.

 

 
F-14

Table of Contents

 

Convertible Debt and Other Obligations

 

Convertible Debt

 

The Company has the following convertible notes payable as of June 30, 2020:

 

Note

 

Funding Date

 

Maturity Date

 

Interest Rate

 

 

Original

Borrowing

 

 

Average Conversion Price

 

 

Number of Shares Converted

 

 

Balance at
June 30, 2020

 

Note payable (A)

 

April 15, 2019

 

November 14, 2019

 

 

7 %

 

$ 100,000

 

 

 

-

 

 

 

-

 

 

$ -

 

Note payable (B)

 

April 15, 2019

 

April 14, 2022

 

 

10 %

 

$ 67,500

 

 

$ 0.0000

 

 

 

20,192,296

 

 

 

-

 

Note payable (C)

 

May 24, 2019

 

December 23, 2019

 

 

10 %

 

$ 80,000

 

 

$ 0.0001

 

 

 

371,054,547

 

 

 

52,842

 

Note payable (C)

 

July 3, 2019

 

February 2, 2020

 

 

10 %

 

$ 80,000

 

 

 

-

 

 

 

-

 

 

 

80,000

 

Note payable (D)

 

June 12, 2019

 

June 11, 2020

 

 

12 %

 

$ 110,000

 

 

$ 0.0019

 

 

 

362,104,881

 

 

 

8,657

 

Note payable (E)

 

June 26, 2019

 

March 25, 2020

 

 

12 %

 

$ 135,000

 

 

$ 0.0014

 

 

 

174,250,000

 

 

 

51,339

 

Note payable (F)

 

August 7, 2019

 

August 6, 2020

 

 

10 %

 

$ 100,000

 

 

$ 0.0007

 

 

 

111,115,731

 

 

 

35,000

 

Note payable (G)

 

August 21, 2019

 

August 20, 2020

 

 

10 %

 

$ 148,500

 

 

$ 0.0001

 

 

 

151,300,000

 

 

 

42,001

 

Note payable (H)

 

January 28, 2020

 

January 27, 2021

 

 

10 %

 

 

63,000

 

 

 

-

 

 

 

-

 

 

 

40,800

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

$ 0.0010

 

 

 

1,190,017,455

 

 

$ 332,839

 

________ 

 

 

(A)

On April 15, 2019, the Company completed a 7-month term original issue discount convertible note and other related documents with an unaffiliated third-party funding group to generate $100,000 in additional available cash resources with a payback provision due and was paid in full on November 14, 2019 of $117,700, which includes the original issue discount of $10,000 and interest of $7,700. In connection therewith, the Company issued 150,000 common stock shares and an additional 102,176 common stock shares on October 15, 2019, per the Company’s original agreement, 412,500 common stock warrants, and reserved 1,412,500 restricted common stock shares for conversion. The shares were issued during the three months ended June 30, 2019. The conversion price is fixed at $0.15. Pursuant to current accounting guidelines, the Company determined that the beneficial conversion feature of the note created a fair value discount of $13,333 at the date of issuance when the stock price was at $0.17 per share. On November 14, 2019, the Company fully met and timely paid its debt obligation. 

 

 

 

 

(B)

On April 15, 2019, the Company completed a convertible debenture at zero interest and other related documents with an unaffiliated third-party funding group to generate $375,000 in additional available cash resources, the funds of which will be released over the 90 days following execution of the agreement in the amounts of $67,500, $90,000, and $180,000, with a payback provision of $75,000, $100,000, and $200,000, respectively, over 36 months. In connection therewith, the Company issued 300,000 common stock warrants, and 20,192,307 restricted common shares as reserve for conversion. The note was unsecured and did not bear interest; however, the implied interest was determined to be 10% over 36 months since the note was issued at a 10% discount. Subsequently, on June 26, 2019 we nullified the agreement and other related documents with this funding group after the initial disbursement of $67,500. The Company refunded the initial tranche of $67,500, a 10% redemption fee of $7,500 for the principle amount plus for the original issue discount of $7,500, and other additional administrative fees of $30,000, which totaled $105,000. The 300,000 common stock warrants will remain issued and the reserved common shares will be reduced enough to satisfy the warrants. 

 

 
F-15

Table of Contents

 

 

(C)

On May 24, 2019, the Company completed a 7-month fixed convertible promissory note and other related documents with an unaffiliated third-party funding group to generate $240,000, which will be distributed in three equal monthly tranches of $80,000, in additional available cash resources with a payback provision of $80,000 plus the original issue discount of $4,000 or $84,000 due seven months from each funding date for each tranche, totaling $252,000. We generated $160,000 in additional available cash resources with a payback provision due on December 23, 2019 and February 2, 2020 totaling $184,800 which includes the original issue discount of $8,000 plus interest of $16,800. In connection therewith, the Company issued 50,000 common stock shares for two tranches with another 25,000 common stock shares to be issued with the third tranche, and the Company has reserved 8,000,000, which was subsequently increased to 2.52 billion, restricted common shares for conversion. The conversion price is the lower of $0.08 or sixty five percent (65%) of the 2 lowest traded prices of the Common Stock for the twenty (20) Trading Days immediately preceding the date of the date of conversion. The Company determined that because the conversion price is variable and unknown, it could not determine if it had enough authorized shares to fulfill the conversion obligation. As such, pursuant to current accounting guidelines, the Company determined that the beneficial conversion feature of the note created a fair value discount of $130,633 at the date of issuance when the stock price was at $0.12 per share. The Company has not fully met and timely paid its debt obligation and is arrears. A default notice has not been issued.

 

 

(D)

On June 12, 2019, the Company completed a 12-month convertible promissory note and other related documents with an unaffiliated third-party funding group to generate $110,000 in additional available cash resources with a payback provision due on June 11, 2020 of $135,250 which includes the original issue discount of $11,000 plus interest of $14,250. In connection with the note, the Company has reserved 14,400,000 common stock shares, which was subsequently increased to 502 million restricted common stock shares as reserve for conversion. The conversion price is a 35% discount to the average of the two (2) lowest trading prices during the previous twenty (20) trading days to the date of a Conversion Notice. The Company determined that because the conversion price is variable and unknown, it could not determine if the Company had enough authorized shares to fulfill the conversion obligation. On December 19, 2019, the Company converted $10,000 of principle into 284,373 shares of common stock at approximately $0.035 per share. As such, pursuant to current accounting guidelines, the Company determined that the beneficial conversion feature of the note created a fair value discount of $59,231 at the date of issuance when the stock price was at $0.11 per share.

 

 

 

 

(E)

On June 26, 2019, the Company completed a 9-month senior convertible promissory note and other related documents with an unaffiliated third-party funding group to generate $135,000 in additional available cash resources with a payback provision due on March 25, 2020 of $168,000 which includes the original issue discount of $15,000 plus interest of $18,000. In connection with the note, the Company issued 100,000 common stock shares and has reserved 15,000,000, which was subsequently increased to 826 million restricted common shares for conversion. The conversion price is the lower of $0.08 or sixty five percent (65%) of the 2 lowest traded prices of the Common Stock for the twenty (20) Trading Days immediately preceding the date of the date of conversion. The Company determined that because the conversion price is variable and unknown, it could not determine if the Company had enough authorized shares to fulfill the conversion obligation. As such, pursuant to current accounting guidelines, the Company determined that the beneficial conversion feature of the note created a fair value discount of $72,692 at the date of issuance when the stock price was at $0.11 per share. The Company has not fully met and timely paid its debt obligation and is arrears. A default notice has not been issued.

 

 

 

 

(F)

On August 7, 2019, the Company completed a 12-month convertible promissory note and other related documents with an unaffiliated third-party funding group to generate $100,000 in additional available cash resources with a payback provision due on August 6, 2020 of $121,000 which includes the original issue discount of $10,000 plus interest of $11,000. In connection with the note, the Company issued 100,000 common stock shares and has reserved 11,000,000 shares, which was subsequently increased to 567 million, restricted common shares for conversion. The conversion price is the lower of $0.08 or sixty five percent (65%) of the 2 lowest traded prices of the Common Stock for the twenty (20) Trading Days immediately preceding the date of the date of conversion. The Company determined that because the conversion price is variable and unknown, it could not determine if the Company had enough authorized shares to fulfill the conversion obligation. As such, pursuant to current accounting guidelines, the Company determined that the beneficial conversion feature of the note created a fair value discount of $73,750 at the date of issuance when the stock price was at $0.09 per share.

 

 
F-16

Table of Contents

 

 

(G)

On August 21, 2019, the Company completed a 12-month convertible promissory note and other related documents with an unaffiliated third-party funding group to generate $148,500, which will be distributed in three equal monthly tranches of $49,500, in additional available cash resources with a payback provision of $49,500 plus the original issue discount of $5,500 or $55,000 due twelve months from each funding date for each tranche, totaling $165,000. The Company generated $49,500 in additional available cash resources with a payback provision due on August 20, 2020 totaling $60,500 which includes the original issue discount of $5,500 plus interest of $5,500. In connection therewith, the Company has issued 50,000 common stock shares for the first tranche with another 50,000 common stock shares to be issued with each additional tranche, which will total 150,000 common shares; the Company has reserved 15,714, which was subsequently increased to 1.85 billion, restricted common shares for conversion. The conversion price is the 35% discount to the average of the two (2) lowest trading prices during the previous twenty (20) trading days to the date of a Conversion Notice. The Company determined that because the conversion price is variable and unknown, it could not determine if it had enough authorized shares to fulfill the conversion obligation. As such, pursuant to current accounting guidelines, the Company determined that the beneficial conversion feature of the note created a fair value discount of $26,654 at the date of issuance when the stock price was approximately $0.07 per share.

 

 

 

 

(H)

On January 28, 2020, the Company completed a 12-month convertible promissory note and other related documents with an unaffiliated third-party funding group to generate up to $925,000, which will be distributed in multiple tranches to be determined, in additional available cash resources with a payback provision of principle debt without an original issue discount plus interest. The Company generated $63,000 in additional available cash resources with a payback provision due on January 27, 2021 totaling $69,300 which includes the principle plus interest of $6,300. The Company has reserved 41,331,475, which was subsequently increased to 728.3 million restricted common shares for conversion. The conversion price is the 39% discount to the average of the two (2) lowest trading prices during the previous fifteen (15) trading days to the date of a Conversion Notice. The Company determined that because the conversion price is variable and unknown, it could not determine if it had enough authorized shares to fulfill the conversion obligation. As such, pursuant to current accounting guidelines, the Company determined that the beneficial conversion feature of the note created a fair value discount of $40,279 at the date of issuance when the stock price was approximately $0.01 per share.

  

The Company has not fully met and timely paid its debt obligation and is arrears. A default notice has not been issued by Debt Holder (E).

 

Other Obligations

 

For the quarter ending June 30, 2020, Kenneth, Tapp, from time-to-time provided short-term interest free loans amounting to $32,700 for the Company’s operations. For the second quarter ending of 2020, Kenneth Tapp provided an additional net amount of $5,975 in short term interest free loans, totaling $38,675 liquidity for year to date 2020. As of August 14, 2020, the obligations have been paid in full.

 

On April 21, 2020, under the Payroll Protection Program, the Company received a forgivable loan of $37,411, and on June 10, 2020, the Company received an additional forgivable loan of $125,700. Both loans were given to small businesses by the Small Business Application (SBA) to help support employees of the companies, as financial aid, in order to sustain businesses during the mandatory COVID-19 lockdown.

 

 
F-17

Table of Contents

 

NOTE 8 – SUBSEQUENT EVENTS

 

Common Stock

 

As of August 14, 2020, the Company has not issued common stock shares to an employee nor has sold common shares to an accredited investor.

    

Convertible Debt

 

Since June 30, 2020 several of our debt holders have converted $52,257 of principle into 955,107,385 shares of common stock at approximately $0.0006 per share.

 

Note

 

Funding Date

 

Maturity Date

 

Interest Rate

 

 

Original

Borrowing

 

 

Average Conversion Price

 

 

Number of Shares Converted

 

 

Balance at
August 14, 2020

 

Note payable (A)

 

April 15, 2019

 

November 14, 2019

 

 

7 %

 

$ 100,000

 

 

 

-

 

 

 

-

 

 

$ -

 

Note payable (B)

 

April 15, 2019

 

April 14, 2022

 

 

10 %

 

$ 67,500

 

 

$ 0.0000

 

 

 

20,192,296

 

 

 

-

 

Note payable (C)

 

May 24, 2019

 

December 23, 2019

 

 

10 %

 

$ 80,000

 

 

$ 0.0001

 

 

 

523,781,820

 

 

 

44,442

 

Note payable (C)

 

July 3, 2019

 

February 2, 2020

 

 

10 %

 

$ 80,000

 

 

 

-

 

 

 

-

 

 

 

80,000

 

Note payable (D)

 

June 12, 2019

 

June 11, 2020

 

 

12 %

 

$ 110,000

 

 

$ 0.0011

 

 

 

691,151,660

 

 

 

-

 

Note payable (E)

 

June 26, 2019

 

March 25, 2020

 

 

12 %

 

$ 135,000

 

 

$ 0.0014

 

 

 

174,250,000

 

 

 

51,339

 

Note payable (F)

 

August 7, 2019

 

August 6, 2020

 

 

10 %

 

$ 100,000

 

 

$ 0.0007

 

 

 

111,115,731

 

 

 

35,000

 

Note payable (G)

 

August 21, 2019

 

August 20, 2020

 

 

10 %

 

$ 148,500

 

 

$ 0.0001

 

 

 

151,300,000

 

 

 

42,001

 

Note payable (H)

 

January 28, 2020

 

January 27, 2021

 

 

10 %

 

 

63,000

 

 

 

-

 

 

 

473,333,333

 

 

 

27,800

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

$ 0.0007

 

 

 

2,145,124,840

 

 

$ 280,582

 

  

As of August 14, 2020, the Company has not fully met and timely paid its debt obligation and is arrears. No additional default notices have not been issued by any debt holders.

 

As of August 14, 2020, certain of our executive officers and directors own a significant percentage of our outstanding capital stock. As of the date of this report, our executive officers and directors and their respective affiliates beneficially own approximately 4.0% of our outstanding voting stock, including our Chief Executive Officer who owns 2.5% of our voting securities.

 

Other Obligations

 

For the quarter ending June 30, 2020, Kenneth Tapp, from time-to-time provided short-term interest free loans amounting to $32,700 for the Company’s operations. For the second quarter ending of 2020, Kenneth Tapp provided an additional net amount of $5,975 in short term interest free loans, totaling $38,675 liquidity for year to date 2020. As of August 14, 2020, the obligations have been paid in full.

 

Board of Director, Chief Financial Officer, and Board Appointments

 

None.

 

 
F-18

Table of Contents

  

ITEM 1A. Risk Factors

 

Social Life Network, Inc. is referred to hereafter as “we”, “our” or “us”.

 

An investment in our common stock is highly speculative and should be purchased only by persons who can afford to lose the entire amount invested in the common stock. Before purchasing any of the shares of common stock, you should carefully consider the following factors relating to our business and prospects. If any of the following risks occur, our business, financial condition or operating results could be materially adversely affected. In such case, you may lose all or part of our investment. You should carefully consider the risks described below and the other information in this annual report before in investing in our common stock.

  

Risks Related to Our Business

 

Our independent registered public accounting firm has issued a going concern opinion; there is substantial uncertainty that we will continue operations in which case you could lose your investment.

 

In their report dated March 19, 2020, our independent registered public accounting firm, B F Borgers CPA PC, stated that our financial statements have been prepared on a going concern basis which assumes that we will be able to realize our assets and discharge our liabilities and commitments in the normal course of business for the foreseeable future. We had an accumulated deficit of $31,563,493 at December 31, 2019, had a net loss of $3,857,948 and used net cash of $1,902,563 in operating activities for the 12 months ended December 31, 2019. Further, we had an accumulated deficit of $31,887,274, a net loss of $323,779, and gained net cash of $3,878 in operating activities for the six months ended June 30, 2020. These factors raise substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern is dependent upon our generating profitable operations in the future and/or to obtain the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they come due. Our management intends to finance operating costs over the next twelve months with existing cash on hand and public issuance of common stock. Although we may be successful in obtaining financing and/or generating revenue to fund our operations, meet regulatory requirements and achieve commercial goals, there are no assurances that such funding will be achieved at a sufficient level or that we will succeed in our future operations.

 

If our Social Networking Platform technology becomes obsolete, our ability to license our Platform and generate revenue from it will be negatively impacted.

 

If our Platform technology becomes obsolete, our results of operations will be adversely affected. The market in which we compete is characterized by rapid technological change, evolving industry standards, introductions of new products, and changes in customer demands that can render existing products obsolete and unmarketable. Our Platform will require continuous upgrading, or our technology will become obsolete, and our business operations will be curtailed or terminate.

 

Customer complaints and negative publicity regarding our products and services may hurt our business and reputation.

 

We may receive complaints or claims from threatened legal action or lawsuits from dissatisfied customers regarding the quality of media content distributed through our brand, networking events, promotions, and MjInvest. These claims may not be covered by our insurance policies. Any resulting negative publicity and/or litigation could be costly for us, divert management attention, result in increased costs of doing business, or otherwise have a material adverse effect on our business and results of operations.

  

Litigation may adversely affect our business, financial condition, and results of operations

 

From time to time in the normal course of its business operations, we may become subject to litigation that may result in liability material to our financial statements as a whole or may negatively affect our s operating results if changes to our business operations are required. The cost to defend such litigation may be significant and may require a diversion of resources. There also may be adverse publicity associated with litigation that could negatively affect customer perception of our business, regardless of whether the allegations are valid or whether we are ultimately found liable. Insurance may be unavailable at all or in sufficient amounts to cover any liabilities with respect to these or other matters. A judgment or other liability in excess of the insurance coverage for any claims could have a material adverse effect on our business, results of operations, and financial condition.

 

 
3

Table of Contents

 

If we fail to develop or acquire technologies that adequately serve changing consumer behaviors and support our evolving business needs, our business, financial condition and prospects may be adversely affected.

 

In order to respond to changing consumer behaviors, we need to invest in new technologies and platforms to deliver content and provide products and services where consumers demand it. If we fail to develop or acquire the necessary consumer-facing technologies or if the technologies we develop or acquire are not received favorably by consumers, our business, financial condition and prospects may be adversely affected. In addition, as our business evolves and we develop new revenue streams, we must develop or invest in new technology and infrastructure that satisfy the needs of the changing business; if we fail to do so, our business, financial condition and prospects may suffer. Further, if we fail to update our current technology and infrastructure to minimize the potential for business disruption, our business, financial condition and prospects may be adversely affected.

 

New social network, online marketplace or application platform features or changes to existing features could fail to attract new users, retain existing users or generate revenue.

 

Our business strategy is dependent on our ability on behalf of our licensees to develop and maintain networks, online marketplaces, and application platforms and features to attract new users and retain existing ones. Any of the following events may cause decreased use of our properties:

 

Emergence of competing websites and applications;

 

 

 

Inability to convince potential users to join our network or that of our licensees;

 

 

 

Technical issues related to mobile and desk top compatibility; and

 

 

 

Rise in safety or privacy concerns.

 

Should any of the above factors or a combination thereof have a material effect on our business, our revenues and results of operations will be negatively affected.

 

Our future success will depend on our key executive officers and our ability to attract, retain, and motivate qualified personnel.

 

We are highly dependent on our management team consisting of Kenneth Tapp, our Chief Executive Officer/Chief Technology Officer. Our future success largely depends upon the continued services of our executive officers and management team. If one or more of our executive officers are unable or unwilling to continue in their present positions, we may be unable to replace them readily, if at all. Additionally, we may incur additional expenses to recruit and retain new executive officers. If any of our executive officers joins a competitor or forms a competing company, we may lose some of our customers and potential customers. Finally, we do not maintain “key person” life insurance on any of our executive officers. Because of these factors, the loss of the services of any of these key persons could have a material adverse effect on our business, results of operations, and financial condition.

 

Our continuing ability to attract and retain highly qualified personnel will also be critical to our success because we will need to hire and retain additional personnel as its business grows. There can be no assurance that we will be able to attract or retain highly qualified personnel. We face significant competition for skilled personnel in our industries. This competition may make it more difficult and expensive to attract, hire, and retain qualified managers and employees. Because of these factors, we may be unable to effectively manage or grow our business, which could have a material adverse effect on our business, results of operations, and financial condition and as a result, the value of your investment could be significantly reduced or completely lost.

 

Should we lose our licensing, advertising or digital subscription or digital marketing or events revenues during any given period that have historically represented the majority of our revenues, our financial condition will be negatively affected.

 

We have generated a majority of our revenue for the six months ended 2020 from licensing revenue and our revenue from digital marketing, microcap events, and digital subscription services of MjInvest.com have been suspended due to COVID-19. The loss of the majority of our revenues in future periods in any of these revenue categories will negatively and materially affect our results of operations.

 

 
4

Table of Contents

 

We expect to incur substantial expenses to meet our reporting obligations as a public company.

 

We estimate that it will cost approximately $75,000 annually to maintain the proper management and financial controls for our filings required as a public reporting company, funds that would otherwise be spent for our business operations. Our public reporting costs may increase over time, which will increase our expenses and may decrease our potential profitability.

 

We have generated a majority of our revenue in 2020, and 2019 from licensing, event, and digital marketing revenues, respectively; the loss of the majority of our revenues in future periods will negatively affect our results of operations.

 

Because our directors and executive officers are among our largest stockholders, they can exert significant control over our business and affairs and have actual or potential interests that may depart from those of investors.

 

Certain of our executive officers and directors own a significant percentage of our outstanding capital stock. As of the date of this annual report, our executive officers and directors and their respective affiliates beneficially own approximately 4.0% of our outstanding voting stock, including our Chief Executive Officer who owns 2.5% of our voting securities. The holdings of our directors and executive officers may increase further in the future upon vesting or other maturation of exercise rights under any of the options or warrants they may hold or in the future be granted, or if they otherwise acquire additional shares of our common stock. The interests of such persons may differ from the interests of our other stockholders. As a result, in addition to their board seats and offices, such persons will have significant influence and control over all corporate actions requiring stockholder approval, irrespective of how our other stockholders may vote, including the following actions:

 

 

to elect or defeat the election of our directors;

 

to amend or prevent amendment of our certificate of incorporation or by-laws;

 

to effect or prevent a merger, sale of assets or other corporate transaction; and

 

to control the outcome of any other matter submitted to our stockholders for a vote.

 

This concentration of ownership by itself may have the effect of impeding a merger, consolidation, takeover or other business consolidation, or discouraging a potential acquirer from making a tender offer for our common stock, which in turn could reduce our stock price or prevent our stockholders from realizing a premium over our stock price.

 

For the 6-months ended June 30, 2020, $125,000 or 88.4%, and June 30, 2019, $25,000 or 15.75%, respectively, of our total revenues were generated from related party revenue; there are conflicts of interest between our officers’ interests who are also officers of our licensees and our shareholders’ interests.

 

For the 6-months ended June 30, 2020, $125,000 or 88.4%, and June 30, 2019, $25,000 or 15,75%, respectively, of our total revenues were derived from license fees we received from Real Estate Social Network and Sports Social Network, which revenues are related party revenues. We have a “software as a service” (SaaS) license agreement with Sports Social Network, which provides that Sports Social Network, Inc. pays a license fee of $125,000 per year for a period of two years and thereafter we receive twenty percentage of their net profits from the sale of online advertising and collected E-Commerce fees on their niche sports social networks from every country around the world that they provide access to their websites and mobile apps that we provide through the licensing agreement. They currently have social networks that are used by the Hunting and Fishing industry, the Racket Sports industry, the Golf industry and the Soccer industry. They plan to launch over the coming twelve to twenty-four months, a niche Auto Racing social network, a niche Skiing and Snowboarding social network, and a private little league sports social network for children, parents and coaches.

 

We also have a software as a service (SaaS) license agreement with Real Estate Social Network, which provides that Real Estate Social Network, Inc. pays a license fee of $125,000 per year for a period of two years and after we receive twenty percentage of their net profits from the sale of online advertising and monthly digital subscription fees from residential real estate professionals using their LikeRE.com social network from every country around the world that they provide access to their website and mobile app that we provide through the licensing agreement. Both licensees have automatically renewing annual license agreements with us and they aim to have millions of users on each of their social networks.

 

 
5

Table of Contents

 

Our Chief Executive Office, Kenneth Tapp, owns 2.5% of our outstanding shares and is also the Chief Technology Officer of Real Estate Social Network and the Chief Technology Officer of the Sports Social Network and owns approximately 40% each of those entities through LVC Consulting, LLC, of which he is the only member. Our related party revenues present conflicts of interests between our officers’ interests and our shareholders” interests, which may favor the interests of our officers over that of our shareholders.

 

The license fees we received from our related parties who are also our licensees, Sports Social Network and Real Estate Social Network, may be undervalued because the license agreements were negotiated between related parties.

 

Our Chief Executive Officer and Chief Financial Officer negotiated the license fee agreements with our related parties/licensees, Sports Social Network and Real Estate Social Network. Our Chief Executive Officer, Kenneth Tapp, owns 2.5% of our outstanding shares and is also the Chief Technology Officer of Real Estate Social Network and Sports Social Network and owns approximately 40% each of those entities through LVC Consulting, LLC, of which he is the only member.

 

Because the license agreements were negotiated between related parties, the license granted to these related parties may have been undervalued, which may have otherwise resulted in a higher amount of license fees being paid by other licensees to us.

 

Our MjLink related business is highly competitive; competition presents an ongoing threat to the success of our business.

 

We face significant competition with respect to our Cannabis/Hemp Social Networks, including WeedMaps.com, Leafly.com, Akerna, which offer a variety of online advertising and e-commerce offerings. Cannabis information, networking, state specific legal cannabis businesses, and are intensely competitive. As such, we expect competition to intensify further in the future and we will be subject to competition for advertisers, well-established commercial cannabis information providers, media companies. Many of our competitors, including the competitors stated above, have greater capital resources, facilities and diversity of services and product lines, which will enable them to compete more effectively in this market. Competition may increase as a result of consolidation within the industry. We may be unable to differentiate our products and services from those of our competitors, or successfully develop and introduce new products and services that are less costly than, or superior to, those of our competitors, which could have a material adverse effect on our business, results of operations and financial condition.

 

We face significant competition across the media landscape, including from event productions, digital publishers, social media platforms, search platforms, digital and advertising/marketing services, which we expect will continue, and as a result we may be unable to maintain or improve our operating results.

 

We compete with other event planners for market share and for the time and attention of consumers. The proliferation of choices available to consumers for information and business connections has resulted in audience fragmentation and has negatively affected overall consumer demand for visiting events. We also compete with digital publishers and other forms of media, including social media platforms, search platforms, portals and digital marketing services. The competition we face has intensified as a result of the growing popularity of mobile devices, such as smartphones and social-media platforms, and the shift in consumer preference from print media to digital media for the delivery and consumption of content, including video content. websites or use our digital applications directly. Given the ever-growing and rapidly changing number of digital media options available on the Internet, we may be unable to increase our online traffic sufficiently and retain or grow a base of frequent visitors to our websites and applications on mobile devices. In addition, the ever-growing and rapidly changing number of digital media options available on the Internet may lead to technologies and alternatives that we are unable to offer.

 

The proliferation of new platforms available to advertisers may affect both the amount of advertising that we are able to sell as well as the rates advertisers are willing to pay. Our ability to compete successfully for advertising also depends on our ability to drive scale, engage digital audiences and prove the value of our advertising and the effectiveness of our digital platforms, including the value of advertising adjacent to high quality content, and on our ability to use our brands to continue to offer advertisers unique, and multi-platform advertising programs. If we are unable to demonstrate to advertisers the continuing value of our digital platforms or offer advertisers unique advertising programs tied to our brands, business, financial condition and results of operations may be adversely affected.

 

 
6

Table of Contents

 

Our Chief Executive Officer has potential conflicts of interest because of his interests in entities with which we have license agreements.

 

Our Chief Executive Officer is also the Chief Technology Officer of our licensees, Real Estate Social Network and Sports Social Network, and owns approximately 40% of each such entity through a limited liability company of which he is the sole member. We have a license agreement with Real Estate Social Network providing that they will pay us 20% of the net profits from all monthly member subscriptions and online advertising sales, paid annually, on the 31st day of January for the preceding year. We also have a license agreement with Sports Social Network providing that they will pay us $125,000 annually for the first two years of this agreement (a total of $250,000 per year for the first two years), and thereafter will receive 20% of the net profits from all online advertising sales and collected E-Commerce fees, paid monthly with the option to pay any outstanding licensing fees annually, and to be received by us no later than the 31st day of January for the preceding year. Our Chief Executive Officer owns 4.5% and of our outstanding shares. Accordingly, our Chief Executive Officer has potential conflicts of interest between his interests in Real Estate Social Network and Sports Social Network and our interests, which may result in them favoring the interests of those networks over our interests and that of our shareholders.

 

Because our directors and executive officers are among our largest voting stockholders, they can exert significant control over our business and affairs and have actual or potential interests that may depart from those of investors.

 

Certain of our executive officers and directors own a significant percentage of our outstanding voting stock. As of the date of this quarterly report, our executive officers and directors and their respective affiliates beneficially own more than 4% of our outstanding voting stock. The holdings of our directors and executive officers may increase further in the future upon vesting or other maturation of exercise rights under any of the options or warrants they may hold or in the future be granted, or if they otherwise acquire additional shares of our common stock. The interests of such persons may differ from the interests of our other stockholders. As a result, in addition to their board seats and offices, such persons will have significant influence and control over all corporate actions requiring stockholder approval, irrespective of how our company’s other stockholders may vote, including the following actions:

 

 

to elect or defeat the election of our directors;

 

 

 

to amend or prevent amendment of our certificate of incorporation or by-laws;

 

 

 

to effect or prevent a merger, sale of assets or other corporate transaction; and

 

 

 

to control the outcome of any other matter submitted to our stockholders for a vote.

 

This concentration of ownership by itself may have the effect of impeding a merger, consolidation, takeover or other business consolidation, or discouraging a potential acquirer from making a tender offer for our common stock, which in turn could reduce our stock price or prevent our stockholders from realizing a premium over our stock price.

 

We will need substantial additional funding to continue our operations, which could result in dilution to our stockholders; we may be unable to raise capital when needed, if at all, which could cause us to have insufficient funds to pursue our operations, or to delay, reduce or eliminate our development of new programs or commercialization efforts.

 

We expect to incur additional costs associated with operating as a public company and to require substantial additional funding to continue to pursue our business and continue with our expansion plans. We may also encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may increase our capital needs and/or cause us to spend our cash resources faster than we expect. Accordingly, we expect that we will need to obtain substantial additional funding in order to continue our operations. To date, we have financed our operations entirely through equity investments by founders and other investors and the incurrence of debt, and we expect to continue to do so in the foreseeable future. Additional funding from those or other sources may not be available when or in the amounts needed, on acceptable terms, or at all. If we raise capital through the sale of equity, or securities convertible into equity, it would result in dilution to our existing stockholders, which could be significant depending on the price at which we may be able to sell our securities. If we raise additional capital through the incurrence of additional indebtedness, we would likely become subject to further covenants restricting our business activities, and holders of debt instruments may have rights and privileges senior to those of our equity investors. In addition, servicing the interest and principal repayment obligations under debt facilities could divert funds that would otherwise be available to support development of new programs and marketing to current and potential new clients. If we are unable to raise capital when needed or on attractive terms, we could be forced to delay, reduce or eliminate development of new programs or future marketing efforts. Any of these events could significantly harm our business, financial condition and prospects.

 

 
7

Table of Contents

 

Consolidation of our competitors in the markets in which we operate could place us at a competitive disadvantage and reduce our potential profitability.

 

We operate in an industry which is highly fragmented due to the regulatory environment. However, there may be a trend or competitive advantage among our competitors to consolidate or acquire value-added assets or scale operations through brand recognition. Consolidation of our competitors may jeopardize the strength of our competitive position in one or more of the markets in which we operate and any operational advantages or assets that we own. Losing some of those advantages or assets could have a material adverse effect on our business, results of operations, and financial condition.

 

We must successfully maintain and/or upgrade our information technology systems.

 

We rely on various information technology systems, including our newly licensed NetSuite enterprise resource planning (ERP) system, that was implemented in the first quarter of Fiscal 2019 to manage our operations, which subjects us to inherent costs and risks associated with maintaining, upgrading, replacing and changing these systems, including impairment of our information technology, potential disruption of our internal control systems, substantial capital expenditures, demands on management time and other risks of delays or difficulties in upgrading, transitioning to new systems or of integrating new systems into our current systems.

 

Our financial statements may not be comparable to those of other companies.

 

Pursuant to Section 107(b) of the JOBS Act, we have elected to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(2) of The JOBS Act. This election allows us to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies. As a result, our financial statements may not be comparable to companies that comply with public company effective dates, and our stockholders and potential investors may have difficulty in analyzing our operating results if comparing us to such companies.

 

We do not have an independent board of directors which could create a conflict of interests and pose a risk from a corporate governance perspective.

 

Our Board of Directors consists mostly of current executive officers and consultants, which means that we do not have any outside or independent directors. The lack of independent directors:

 

May prevent the Board from being independent from management in its judgments and decisions and its ability to pursue the Board responsibilities without undue influence.

 

 

 

May present us from providing a check on management, which can limit management taking unnecessary risks.

 

 

 

Create potential for conflicts between management and the diligent independent decision-making process of the Board.

 

 

 

Present the risk that our executive officers on the Board may have influence over their personal compensation and benefits levels that may not be commensurate with our financial performance.

 

 

 

Deprive us of the benefits of various viewpoints and experience when confronting challenges that we face.

 

 
8

Table of Contents

 

Because officers serve on our Board of Directors, it will be difficult for the Board to fulfill its traditional role as overseeing management.

 

Because we do not have a nominating, audit or compensation committee, shareholders will have to rely on the entire board of directors, no members of which are independent, to perform these functions.

 

We do not have a nominating, audit or compensation committee or any such committee comprised of independent directors. The board of directors performs these functions. No members of the board of directors are independent directors. Thus, there is a potential conflict in that board members who are also part of management will participate in discussions concerning management compensation and audit issues that may affect management decisions.

 

Our election not to opt out of the JOBS Act extended accounting transition period may not make our financial statements easily comparable to other companies.

 

Pursuant to the JOBS Act of 2012, as an emerging growth company we can elect to opt out of the extended transition period for any new or revised accounting standards that may be issued by the PCAOB or the SEC. We have elected not to opt out of such extended transition period, which means that when a standard is issued or revised, and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the application date for private companies. Our financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards. As of present, there are no new or revised accounting standards that have been issued by the PCAOB or the SEC applicable to us for which we have adopted the application date for private companies.

 

The JOBS Act will also allow us to postpone the date by which we must comply with certain laws and regulations intended to protect investors and to reduce the amount of information provided in reports filed with the SEC. The recently enacted JOBS Act is intended to reduce the regulatory burden on emerging growth companies. The Registrant meets the definition of an emerging growth company and so long as it qualifies as an “emerging growth company,” it will, among other things:

 

be exempt from the provisions of Section 404(b) of the Sarbanes-Oxley Act requiring that its independent registered public accounting firm provide an attestation report on the effectiveness of its internal control over financial reporting;

 

be exempt from the “say on pay” provisions (requiring a non-binding shareholder vote to approve compensation of certain executive officers) and the “say on golden parachute” provisions (requiring a non-binding shareholder vote to approve golden parachute arrangements for certain executive officers in connection with mergers and certain other business combinations) of the Dodd-Frank Act and certain disclosure requirements of the Dodd-Frank Act relating to compensation of its chief executive officer;

 

be permitted to omit the detailed compensation discussion and analysis from proxy statements and reports filed under the Securities Exchange Act of 1934 and instead provide a reduced level of disclosure concerning executive compensation; and

 

be exempt from any rules that may be adopted by the Public Registrant Accounting Oversight Board requiring mandatory audit firm rotation or a supplement to the auditor’s report on the financial statements.

 

We intend to take advantage of some or all the reduced regulatory and reporting requirements that will be available to it so long as it qualifies as an “emerging growth company”. We have elected not to opt out of the extension of time to comply with new or revised financial accounting standards available under Section 102(b) of the JOBS Act. Among other things, this means that the Registrant’s independent registered public accounting firm will not be required to provide an attestation report on the effectiveness of our internal control over financial reporting so long as it qualifies as an emerging growth company, which may increase the risk that weaknesses or deficiencies in the internal control over financial reporting go undetected. Likewise, so long as it qualifies as an emerging growth company, we may elect not to provide certain information, including certain financial information and certain information regarding compensation of executive officers that would otherwise have been required to provide in filings with the SEC, which may make it more difficult for investors and securities analysts to evaluate the Registrant. As a result, investor confidence and the market price of our common stock may be adversely affected.

 

 
9

Table of Contents

 

We may have difficulty obtaining officer and director coverage or obtaining such coverage on favorable terms or financially be unable to obtain any such coverage, which may make it difficult for our attracting and retaining qualified members of our board of directors, particularly to serve on our audit committee and compensation committee, and qualified executive officers.

 

We also expect that being a public company and these new rules and regulations will make it more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage or financially be unable to obtain such coverage. These factors could also make it more difficult for us to attract and retain qualified members of our board of directors, particularly to serve on our audit committee and compensation committee, and qualified executive officers.

 

Security breaches and other disruptions could compromise the information that we maintain and expose us to liability, which would cause our business and reputation to suffer.

 

In the ordinary course of our business, we may collect and store sensitive data, including intellectual property, our proprietary business information and that of our customers and business partners, and personally identifiable information of our customers, in our data centers and on its networks. The secure processing, maintenance and transmission of this information is critical to our business strategy, information technology and infrastructure and we may be vulnerable to attacks by hackers or breached due to employee error, malfeasance or other disruptions. Any such breach could compromise our network, services and the information stored there could be accessed, publicly disclosed, lost or stolen. Any such access, disclosure or other loss of information could result in legal claims or proceedings, liability under laws that protect the privacy of personal information, regulatory penalties, and disruption to our operations and the services it provides to customers. This often times results in a loss of confidence in our products and services, which could adversely affect our ability to earn revenues and competitive position and could have a material adverse effect on our business, results of operations, and financial condition.

 

The products and services that we develop will result in increased costs.

 

We expect that our development costs to increase in future periods as we expand into new areas, and such increased costs could negatively affect our future operating results. We expect to continue to expend substantial financial and other resources on our current business operations and the creation of organized live-event experiences and digital marketing and advertising initiatives. Furthermore, we intend to invest in marketing, licensing and product development programs, as well as associated sales and marketing programs, and general administration. These investments may not result in increased revenue or growth in the business. Our failure to materially increase our revenues could have a material adverse effect on our business, results of operations, and financial condition.

 

Our inability to effectively control costs and still maintain our business relationships, could have a material adverse effect on our business, results of operations, and financial condition.

 

It is critical that we appropriately align our cost structure with prevailing market conditions to minimize the effect of economic downturns our its operations and, in particular, to build and maintain our user relationships. Our inability to align our cost structure in response to economic downturns on a timely basis could have a material adverse effect on our business, results of operations, and financial condition. Conversely, adjusting the cost structure to fit economic downturn conditions may have negative effects during an economic upturn or periods of increasing demand for services/products. If we too aggressively reduce our costs, we may not have sufficient resources to capture opportunities for expansion and growth and meet customer demand. Our inability to effectively manage resources and capacity to capitalize on periods of economic upturn could have a material adverse effect on our business, results of operations, and financial condition.

 

 
10

Table of Contents

  

If we are unable to accurately predict and respond to market developments or demands, its business, results of operations and financial condition will be adversely affected.

 

The cannabis industry is characterized by rapidly evolving technology, government regulations and methodologies, which makes it difficult to predict demand and market acceptance for our services/products. In order to succeed, we need to adapt the products we offer in order to keep up with technological developments and changes in consumer needs. We cannot guarantee that we will succeed in enhancing our services/products or developing or acquiring new services/products or features that adequately address changing technologies, user requirements and market preferences. We also cannot assure you that the products and services we offer will be accepted by end users. If the products and services that we offer are not accepted by customers, they will no longer purchase them, which could have a material adverse effect on our business, results of operations, and financial condition. Changes in technologies, industry standards, the regulatory environment and customer requirements, and new product introductions by existing or future competitors, could render our existing services/products obsolete and unmarketable, or require us to enhance current products/services or develop new products and services. This may require us to expend significant amounts of money, time, and other resources to meet these demands, which could strain its personnel and financial resources. Furthermore, many modernization projects deal with customer mission critical applications, and therefore encapsulate risk for the customer.

 

We may be unable to identify, purchase or integrate desirable acquisition targets, future acquisitions may be unsuccessful, and we may not realize the anticipated cost savings, revenue enhancements or other synergies from such acquisitions.

 

We plan to investigate and acquire strategic businesses with the potential to be accretive to earnings, increase our market penetration, brand strength and its market position or enhancement of our existing product and service offerings. There can be no assurance that we will identify or successfully complete transactions with suitable acquisition candidates in the future. Additionally, if we were to undertake a substantial acquisition, the acquisition may need to be financed in part through additional financing through public offerings or private placements of debt or equity securities or through other arrangements. There is no assurance that the necessary acquisition financing will be available to us on acceptable terms if and when required. Acquisitions could also result in dilutive issuances of equity securities or the incurrence of debt, which could adversely affect our operating results. We may also unknowingly inherit liabilities from acquired businesses or assets that arise after the acquisition and that are not adequately covered by indemnities. In addition, if an acquired business fails to meet our expectations, its operating results, business and financial position may suffer.

 

We have not conducted an evaluation of the effectiveness of our internal control over financial reporting and will not be required to do so until 2020; if we are unable to implement and maintain effective internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports and our common stock market price may be negatively affected.

 

As a public company, we will be required to maintain internal control over financial reporting for the year ending December 31, 2020 and to report any material weaknesses in such internal control. Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) requires that we evaluate and determine the effectiveness of our internal control over financial reporting and, beginning with our annual report for the fiscal year ending December 31, 2020, provide a management report on the internal control over financial reporting, which must be attested to by its independent registered public accounting firm to the extent we decide not to avail ourselves of the exemption provided to an emerging growth company, as defined by Jobs Act. Since we have not conducted an evaluation of the effectiveness of its internal control over financial reporting, we may have undiscovered material weaknesses. If we have a material weakness in our internal control over financial reporting, we may not detect errors on a timely basis and our financial statements may be materially misstated. We are in the process of designing and implementing the internal control over financial reporting required to comply with this obligation, which process may be time consuming, costly, and complicated. If we identify material weaknesses in our internal control over financial reporting, if we are unable to comply with the requirements of Section 404 of the Sarbanes-Oxley Act in a timely manner, we may be unable to assert that our internal control over financial reporting are effective, or if its independent registered public accounting firm is unable to express an opinion as to the effectiveness of its internal control over financial reporting, if and when required, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock could be negatively affected and/or we may become subject to regulatory actions.

 

 
11

Table of Contents

  

If we fail to maintain an effective system of internal controls, we may be unable to accurately report our financial results or prevent fraud; as a result, current and potential stockholders could lose confidence in our financial reporting, which would harm our business and the trading price of our stock.

 

Effective internal controls are necessary for us to provide reliable financial reports and effectively prevent fraud. If we cannot provide reliable financial reports or prevent fraud, our brand and operating results will likely be harmed. We may in the future discover areas of our internal controls that need improvement. We cannot be certain that any measures we implement will ensure that we achieve and maintain adequate controls over our financial processes and reporting in the future. Any failure to implement required new or improved controls, or difficulties encountered in their implementation, could harm our operating results or cause us to fail to meet our reporting obligations. Inferior internal controls could also cause investors to lose confidence in our reported financial information and materially harm our business, which would have a negative effect on our operations.

 

We have not yet finalized our internal controls policies and procedures over financial reporting.

 

We are in the process of developing and implementing more robust internal controls over financial reporting which is time consuming, costly, and complicated. If we identify material weaknesses in our internal control over financial reporting, if our management is unable to assert, when required, that our internal control over financial reporting is effective, or if our independent registered public accounting firm is unable to attest, when required, to the effectiveness of our internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock could be negatively affected, and we could become subject to investigations by the stock exchange on which our securities are listed, the SEC, or other regulatory authorities, which could require additional financial and management resources

 

We may be unable to effectively manage our growth or improve our operational, financial, and management information systems, which could have a material adverse effect on our business, results of operations, and financial condition.

 

In the near term and contingent upon raising adequate funds from this Offering, we intend to expand our operations significantly to foster growth. Growth may place a significant strain on our business and administrative operations, finances, management and other resources, as follows:

 

 

The need for continued development of financial and information management systems;

 

The need to manage strategic relationships and agreements with manufacturers, customers and partners; and

 

Difficulties in hiring and retaining skilled management, technical, and other personnel necessary to support and manage the business.

 

Should we fail to successfully manage growth could, our results of operations will be negatively affected.

 

If we fail to protect or develop our intellectual property, business, operations and financial condition could be adversely affected.

 

Any infringement or misappropriation of our intellectual property could damage its value and limit its ability to compete. We may have to engage in litigation to protect the rights to our intellectual property, which could result in significant litigation costs and require a significant amount of management time and attention. In addition, our ability to enforce and protect our intellectual property rights may be limited in certain countries outside the United States, which could make it easier for competitors to capture market position in such countries by utilizing technologies that are similar to those that we develop.

 

We may also find it necessary to bring infringement or other actions against third parties to seek to protect its intellectual property rights. Litigation of this nature, even if successful, is often expensive and time-consuming to prosecute and there can be no assurance that we will have the financial or other resources to enforce its rights or prevent other parties from developing similar technology or designing around our intellectual property.

 

 
12

Table of Contents

  

Our trade secrets may be difficult to protect.

 

Our success depends upon the skills, knowledge, and experience of our technical personnel, consultants and advisors. Because we operate in several highly competitive industries, we rely in part on trade secrets to protect our proprietary technology and processes. However, trade secrets are difficult to protect. We enter into confidentiality or non-disclosure agreements with our corporate partners, employees, consultants, outside scientific collaborators, developers, and other advisors. These agreements generally require that the receiving party keep confidential and not disclose to third party’s confidential information developed by the receiving party or made known to the receiving party by us during the course of the receiving party’s relationship with us. These agreements also generally provide that inventions conceived by the receiving party in the course of rendering services to us will be our exclusive property.

 

These confidentiality, inventions and assignment agreements may be breached and may not effectively assign intellectual property rights to us. Our trade secrets also could be independently discovered by competitors, in which case will be unable to prevent the use of such trade secrets by our competitors. The enforcement of a claim alleging that a party illegally obtained and was using our trade secrets could be difficult, expensive and time consuming and the outcome would be unpredictable. In addition, courts outside the United States may be less willing to protect trade secrets. The failure to obtain or maintain meaningful trade secret protection could have a material adverse effect on our business, results of operations, and financial condition.

 

The consideration being paid to our management is not based on arms-length negotiation.

 

The compensation and other consideration we have paid or will be paid to our management has not been determined based on arm’s length negotiations. While management believes that the consideration is fair for the work being performed, we cannot assure that the consideration to management reflects the true market value of its services.

 

There are risks associated with the proposal expansion of our business.

 

Any expansion plans that we undertake to increase or expand our operations entail risks, which may negatively impact our potential profitability. Consequently, investors must assume the risk that (i) such expansion may ultimately involve expenditures of funds beyond the resources available to us at that time, and (ii) management of such expanded operations may divert management’s attention and resources away from its existing operations, any of which factors could have a material adverse effect on our business, results of operations, and financial condition. We cannot assure investors that our products, services, or controls will be adequate to support anticipated growth of our operations.

 

We are subject to data privacy and security risks

 

Our business activities are subject to laws and regulations governing the collection, use, sharing, protection and retention of personal data, which continue to evolve and have implications for how such data is managed. In addition, the Federal Trade Commission (the “FTC”) continues to expand its application of general consumer protection laws to commercial data practices, including to the use of personal and profiling data from online users to deliver targeted Internet advertisements. Most states have also enacted legislation regulating data privacy and security, including laws requiring businesses to provide notice to state agencies and to individuals whose personally identifiable information has been disclosed as a result of a data breach.

 

Similar laws and regulations have been implemented in many of the other jurisdictions in which we operate, including the European Union. Recently, the European Union adopted the General Data Protection Regulation (“GDPR”), which is intended to provide a uniform set of rules for personal data processing throughout the European Union and to replace the existing Data Protection Directive (Directive 95/46/EC). Fully enforceable as of May 25, 2018, the GDPR expands the regulation of the collection, processing, use and security of personal data, contains stringent conditions for consent from data subjects, strengthens the rights of individuals, including the right to have personal data deleted upon request, continues to restrict the trans-border flow of such data, requires mandatory data breach reporting and notification, increases penalties for non-compliance and increases the enforcement powers of the data protection authorities. In response to such developments, industry participants in the U.S., and Europe have taken steps to increase compliance with relevant industry-level standards and practices, including the implementation of self-regulatory regimes for online behavioral advertising that impose obligations on participating companies, such as us, to give consumers a better understanding of advertisements that are customized based on their online behavior. We continue to monitor pending legislation and regulatory initiatives to ascertain relevance, analyze impact and develop strategic direction surrounding regulatory trends and developments, including any changes required in our data privacy and security compliance programs.

 

 
13

Table of Contents

 

We are an Emerging Growth Company and it cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our Common Stock less attractive to investors.

 

For as long as we continue to be an Emerging Growth Company, we intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies including, but not limited to, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. We cannot predict if investors will find our Common Stock less attractive because it will rely on these exemptions. If some investors find our Common Stock less attractive as a result, there may be a less active trading market for its Common Stock and its stock price may be more volatile.

 

We will remain an Emerging Growth Company until the earliest of (i) the end of the fiscal year in which the market value of its Common Stock that is held by non-affiliates exceeds $700 million as of June 30, (ii) the end of the fiscal year in which it has total annual gross revenue of $1 billion or more during such fiscal year, (iii) the date on which it issues more than $1 billion in non-convertible debt in a three-year period or (iv) five years from the date of this proxy statement.

 

The outbreak of the coronavirus may negatively impact our business, results of operations and financial condition.

 

The outbreak of the coronavirus may negatively impact our business, results of operations and financial condition. In December 2019, a novel strain of coronavirus was reported to have surfaced in Wuhan, China, which has and is continuing to spread throughout China and other parts of the world, including the United States. On January 30, 2020, the World Health Organization declared the outbreak of the coronavirus disease (COVID-19) a “Public Health Emergency of International Concern.” On January 31, 2020, U.S. Health and Human Services Secretary Alex M. Azar II declared a public health emergency for the United States to aid the U.S. healthcare community in responding to COVID-19, and on March 11, 2020 the World Health Organization characterized the outbreak as a “pandemic”. The significant outbreak of COVID-19 has resulted in a widespread health crisis that could adversely affect the economies and financial markets worldwide, and could adversely affect our business, results of operations and financial condition, including coordination and completion of financial and operational matters and attendance at our live MjMicro events resulting from social distancing, travel restrictions, movement and large gathering restrictions, the public’s fears associated with the Pandemic, including air travel. The ultimate extent of the impact of any epidemic, pandemic or other health crisis on our business, financial condition and results of operations will depend on future developments, which are highly uncertain and cannot be predicted, including new information that may emerge concerning the severity of such epidemic, pandemic or other health crisis and actions taken to contain or prevent their further spread, among others. These and other potential impacts of an epidemic, pandemic or other health crisis, such as COVID-19, could therefore materially and adversely affect our business, financial condition and results of operations.

 

Accordingly, with respect to our Form 10-Q for the period ending March 31, 2020 that was due on or about May 15, 2020 (the “10-Q”), pursuant to SEC Release No. 34-88465 dated March 25, 2020 (the “Order”), we requested relief from the Commission from filing the 10-Q on a timely basis because we were unable to file the report on a timely basis because COVID-19 had not allowed our employees to adequately coordinate and complete matters pertaining to the 10-Q in a timely manner. In connection therewith, we estimated that we would be able to file the 10-Q on or prior to June 29, 2020, which was within the 45-day filing requirement provided for in the Order.

 

 
14

Table of Contents

 

RISKS RELATED TO CANNABIS/HEMP RELATED GOVERNMENT REGULATION

 

Our cannabis/hemp websites with respect to cannabis are dependent on state laws pertaining to the cannabis industry.

 

Our subsidiary, MjLink, has several websites in the cannabis/hemp industry. As of the date of this statement, there are 29 states and the District of Columbia that allow their citizens to use medical cannabis. Additionally, Colorado, Washington, Alaska, Oregon and Washington DC have legalized cannabis for adult use at the state (or district) level. Continued development of the cannabis industry is dependent upon continued legislative authorization of cannabis at the state level. Any number of factors pertaining to lack of public or legislative support could slow or halt progress in this area. Further, progress in the cannabis industry is not assured.

 

Our cannabis/hemp websites are open to all Internet users, which may result in legal consequences; in such event, our results of operations will be negatively affected.

 

Our Terms and Conditions contained in our MjLink sites clearly state that our network and services pertaining to our cannabis/hemp related sites are only to be used by users who are over 21 years old and located where the use of cannabis/hemp is permissible under state law and only in a manner which would be permissible under the applicable state law. However, it is impractical to independently verify that all activity occurring on our network fits into this description. If we become subject to federal and state law enforcement, our brand name and results of operations will be negatively impacted.

 

Cannabis remains illegal under Federal law.

 

Despite the development of a legal cannabis industry under the laws of certain states, these state laws legalizing medical and adult cannabis use conflict with the Federal Controlled Substances Act, which classifies cannabis as a Schedule-I controlled substance and makes cannabis use and possession illegal on a national level. The United States Supreme Court has ruled that it is the Federal government that has the right to regulate and criminalize cannabis, even for medical purposes, and thus Federal law criminalizing the use of cannabis preempts state laws that legalize its use.

 

As the possession and use of cannabis is illegal under the Federal Controlled Substances Act, we may be deemed to be aiding and abetting illegal activities through the services that we provide to users and advertisers. As a result, we may be subject to enforcement actions by law enforcement authorities, which would materially and adversely affect our business.

 

Under Federal law, and more specifically the Federal Controlled Substances Act, the possession, use, cultivation, and transfer of cannabis is illegal. Our business provides services to customers that were engaged in the business of possession, use, cultivation, and/or transfer of cannabis. As a result, law enforcement authorities, in their attempt to regulate the illegal use of cannabis, may seek to bring an action or actions against us, including, but not limited, to a claim of aiding and abetting another’s criminal activities. The Federal aiding and abetting statute provide that anyone who “commits an offense against the United States or aids, abets, counsels, commands, induces or procures its commission, is punishable as a principal.” 18 U.S.C. §2(a). Because of such an action, we may be forced to cease operations and our investors could lose their entire investment. Such an action would have a material negative effect on sale of our services.

 

Federal enforcement practices could change with respect to services providers to participants in the cannabis industry, which could adversely impact us. If the Federal government were to change its practices or were to expend its resources attacking providers in the cannabis industry, such action could have a materially adverse effect on our operations, our customers, or the sales of our products.

 

It is possible that additional Federal or state legislation could be enacted in the future that would prohibit our advertisers from selling cannabis, and, if such legislation were enacted, such advertisers may discontinue the use of our services, our potential source of customers would be reduced, causing revenues could decline. Further, additional government disruption in the cannabis industry could cause potential customers and users to be reluctant use and advertise on our products, which would be detrimental to the Company. We cannot predict the nature of any future laws, regulations, interpretations or applications, nor can we determine what effect additional governmental regulations or administrative policies and procedures, when and if promulgated,

 

 
15

Table of Contents

  

As the possession and use of cannabis is illegal under the Federal Controlled Substances Act, we may be deemed to be aiding and abetting illegal activities through the services that we provide to users and advertisers; as a result, we may be subject to enforcement actions by law enforcement authorities, which would materially and adversely affect our business.

 

Under Federal law, and more specifically the Federal Controlled Substances Act, the possession, use, cultivation, and transfer of cannabis is illegal. Our business provides services to customers that may be directly or indirectly engaged in the business of possession, use, cultivation, and/or transfer of cannabis. As a result, law enforcement authorities, in their attempt to regulate the illegal use of cannabis, may seek to bring an action or actions against us, including, but not limited, to a claim of aiding and abetting another’s criminal activities. The Federal aiding and abetting statute provide that anyone who “commits an offense against the United States or aids, abets, counsels, commands, induces or procures its commission, is punishable as a principal.” 18 U.S.C. §2(a). As a result of such an action, we may be forced to cease operations and our investors could lose their entire investment. Such an action would have a material negative effect on our business and operations.

 

Federal enforcement practices could change with respect to service providers or participants in the cannabis industry, which could adversely impact us. If the Federal government were to change its practices or were to expend its resources attacking providers in the cannabis industry, such action could have a materially adverse effect on our operations, our customers, or the sales of our products.

 

It is possible that additional Federal or state legislation could be enacted in the future that would prohibit our advertisers from selling cannabis, and if such legislation were enacted, such advertisers may discontinue the use of our services, our potential source of customers would be reduced, causing revenues could decline. Further, additional government disruption in the cannabis industry could cause potential customers and users to be reluctant to advertise on our sites, which would negatively affect our revenues. We cannot predict the nature of any future laws, regulations, interpretations or applications, nor can we determine what effect additional governmental regulations or administrative policies and procedures, when and if promulgated, could have on our business.

 

Participants in the cannabis industry may have difficulty accessing the service of banks, which may make it difficult for us to operate.

 

Despite recent rules issued by the United States Department of the Treasury mitigating the risk to banks who do business with cannabis companies permitted under state law, as well as recent guidance from the United States Department of Justice, banks remain weary to accept funds from businesses in the cannabis industry. Since the use of cannabis remains illegal under Federal law, there remains a compelling argument that banks may be in violation of Federal law when accepting for deposit funds derived from the sale or distribution of cannabis. Consequently, businesses involved in the cannabis industry continue to have trouble establishing banking relationships. An inability to open bank accounts may make it difficult for us, or some of our advertisers, to do business.

 

Federal enforcement practices could change with respect to services provided to participants in the cannabis industry, which could adversely impact us; if the Federal government were to expend its resources on enforcement actions against service providers in the cannabis industry under guidance provided by the Sessions Memo, including asset forfeiture actions, such actions could have a material adverse effect on our operations, our customers, or our services.

 

On January 4, 2018, the U.S. Attorney General Jeff Sessions issued the Sessions Memo stating that the Cole Memo was rescinded effectively immediately. Mr. Sessions stated that “prosecutors should follow the well-established principles that govern all federal prosecutions,” which require “federal prosecutors deciding which cases to prosecute to weigh all relevant considerations, including federal law enforcement priorities set by the Attorney General, the seriousness of the crime, the deterrent effect of criminal prosecution, and the cumulative impact of particular crimes on the community.” Mr. Sessions went on to state in the memorandum that “previous nationwide guidance specific to marijuana is unnecessary and is rescinded, effective immediately.” It is unclear at this time whether the Sessions Memo indicates that the Trump administration will strongly enforce the federal laws applicable to cannabis or what types of activities will be targeted for enforcement. While we do not harvest, distribute or sell cannabis, we may be irreparably harmed by a change in enforcement policies of the federal government depending on the nature of such change.

 

 
16

Table of Contents

 

Attorney General Order No. 3946-2018 released by Jeff Sessions on July 19, 2018 shows that he is in favor of law enforcement using civil asset forfeiture as “an effective tool to reduce crime” and that “its use should be encouraged where appropriate.” It is possible that due to the recent Sessions Memo our clients may discontinue the use of our services, our potential source of customers may be reduced, and our revenues may decline. Further, additional government disruption in the cannabis industry could cause potential customers and users to be reluctant to use our services or buy advertising from us. It is possible that due to the recent Sessions Memo our clients may discontinue the use of our services, we or our customers may be subject to asset forfeiture actions, our potential source of customers may be reduced, and our revenues may decline. Further, additional government disruption in the cannabis industry could cause potential customers and users to be reluctant to use advertising services, which would negatively impact our results of operations.

 

The 2018 Farm Bill officially reclassifies hemp for commercial uses after decades of statutes and legal enforcement conflating hemp and marijuana, the Farm Bill distinguishes between the two by removing hemp from the Controlled Substances Act. While the two are closely related, hemp lacks the high concentration of THC that is responsible for the “high” from the use of marijuana. This would effectively move regulation and enforcement of the crop from the purview of the Drug Enforcement Agency to the U.S. Department of Agriculture.

 

Recent hearing in February 2019, conducted before the House Subcommittee on Consumer Protection and Financial Institutions, focused on access to banking services for legal cannabis-based businesses. Two of the speakers at the hearing — Colorado Rep. Ed Perlmutter and Washington Rep. Denny Heck, both Democratic members of Congress from states with legal marijuana, back the Secure and Fair Enforcement of Banking Act of 2019, or the SAFE Banking Act, as it is more commonly known. The proposed bill, according to lawmakers and reports, would prevent federal regulators from targeting banks that accept deposits from legal cannabis operators. Such prohibition could involve limiting FDIC protections for those deposits or trying to prevent loans to those businesses.

 

On September 28, 2019, the Democratic-controlled House of Representatives voted to pass a bill protecting banks that work with the marijuana industry called the Secure and Fair Enforcement (SAFE) Banking Act of 2019. The bill aims to give clarification to banks and credit unions that serve cannabis companies with, for instance, business accounts for bill payments. Lobbyists have emphasized that many cannabis businesses end up “unbanked” and operating largely in cash, and that makes them targets for robberies and other crimes. Some analysts are skeptical the measure is likely to become law in 2019 as it faces a tough road in the Republican-controlled Senate while some believe Senator McConnell could go along with a pot banking bill to help Republicans in the 2020 elections.

 

Under the government lockdown for COVID-19 beginning March 2020, cannabis businesses were considered an essential business and were allowed to remain open during the pandemic crisis.

 

The House of Representatives on July 29, 2020 added an amendment to a spending package that would protect state-legal marijuana businesses from the Department of Justice. The amendment, according to its description, would "prohibit the Department of Justice from interfering with state and tribal cannabis programs." Congressional Cannabis Caucus Founder Rep. Earl Blumenauer, D-Ore., sponsored the amendment, which passed 254-163, including 31 Republicans who voted in favor of it. The provision is unlikely to become law, as the bill to which it is attached to will still have to make it through the GOP-controlled Senate. And Congress, as polarized as it currently is, is unlikely to pass a large funding package like the one the House was considering. Those in the marijuana industry supported the inclusion of the Blumenauer Amendment but noted that it doesn't change the fact that marijuana is still illegal at the federal level.

 

Laws and regulations affecting the medical marijuana industry are constantly changing, which could detrimentally affect our business, and we cannot predict the impact that future regulations may have on us.

 

Local, state and federal medical marijuana laws and regulations are broad in scope and they are subject to evolving interpretations, which could require us to incur substantial costs associated with compliance. In addition, violations of these laws, or allegations of such violations, could disrupt our business and result in a material adverse effect on our revenues, profitability, and financial condition.

 

 
17

Table of Contents

 

In addition, it is possible that regulations may be enacted in the future that will be directly applicable to our business. We cannot predict the nature of any future laws, regulations, interpretations or applications, nor can we determine what effect additional governmental regulations or administrative policies and procedures, when and if promulgated, could have on our business. These potential effects could include, however, requirements for the revisions to our products to meet new standards, the recall or discontinuance of certain products, or additional record keeping and reporting requirements. Any or all these requirements could have a material adverse effect on our business, financial condition, and results of operations.

 

U.S. Federal and foreign regulation and enforcement may adversely affect the implementation of cannabis laws and regulations and may negatively impact our revenues, or we may be found to be violating the Controlled Substances Act or other U.S. federal, state, or foreign laws.

 

In December 2018, the Farm Bill was signed into law. Under section 10113 of the Farm Bill, state departments of agriculture must consult with the state’s governor and chief law enforcement officer to devise a plan that must be submitted to the Secretary of USDA. A state’s plan to license and regulate hemp can only commence once the Secretary of USDA approves that state’s plan. In states opting not to devise a hemp regulatory program, USDA will construct a regulatory program under which hemp cultivators in those states must apply for licenses and comply with a federally run program. This system of shared regulatory programming is similar to options states had in other policy areas such as health insurance marketplaces under ACA, or workplace safety plans under OSHA—both of which had federally-run systems for states opting not to set up their own systems. Non-cannabis hemp is a highly regulated crop in the United States for both personal and industrial production.

 

The law outlines actions that are considered violations of federal hemp law (including such activities as cultivating without a license or producing cannabis with more than 0.3 percent THC). The law details possible punishments for such violations, pathways for violators to become compliant, and even which activities qualify as felonies under the law, such as repeated offenses.

 

Section 12619 of the Farm Bill removes hemp-derived products from its Schedule I status under the Controlled Substances Act, but the legislation does not legalize CBD generally. CBD, with some minor exceptions, remains a Schedule I substance under federal law. The Farm Bill ensures that any cannabinoid—a set of chemical compounds found in the cannabis plant—that is derived from hemp will be legal, if and only if that hemp is produced in a manner consistent with the Farm Bill, associated federal regulations, association state regulations, and by a licensed grower. All other cannabinoids, produced in any other setting, remain a Schedule I substance under federal law and are thus illegal.

 

In October 2018, the United States Drug Enforcement Agency (“DEA”) rescheduled drugs approved by the United States Food and Drug Administration (“FDA”) which contain CBD derived from cannabis and no more than 0.1 percent tetrahydrocannabinols from Schedule I, the highest level of restriction with a high potential for abuse, to Schedule V, the lowest restriction with the lowest potential for abuse under the Controlled Substances Act (“CSA”). This ruling does not apply to Cannabidiol (“CBD”) products such as oils, tinctures, extracts, and other foods because they are not FDA approved.

 

In October 2018, the FDA was advised by the DEA that removing CBD from the CSA would violate international drug treaties to which the United States is a signatory. Specifically, the DEA explained that the United States would “not be able to keep obligations under the 1961 Single Convention on Narcotic Drugs if CBD were decontrolled under the CSA”.

 

Consequently, the FDA revised its recommendation and advised the DEA to place CBD in Schedule V—which applies to drugs with demonstrated medical value and deemed unlikely to cause harm, abuse, or addiction—instead. Nonetheless, the FDA declared that “[i]f treaty obligations do not require control of CBD, or the international controls on CBD…are removed at some future time, the above recommendation for Schedule V under the CSA would need to be revisited promptly.”

 

On May 22, 2018, the DEA released the Internal Directive Regarding the Presence of Cannabinoids in Products and Materials Made from the Cannabis Plant, which states “The mere presence of cannabinoids is not itself dispositive as to whether a substance is within the scope of the CSA; the dispositive question is whether the substance falls within the CSA definition of marijuana.”

 

 
18

Table of Contents

 

Many CBD products are derived from cannabis. Some come from marijuana (“Marijuana-CBD”). Marijuana-CBD remains a Schedule I substance. Marijuana-CBD products may be legal under state law in states like Washington, Oregon, and California but their sale is only permitted through a state-regulated marijuana market in the respective state of legal cultivation. Marijuana-CBD products are only legal in states where they were cultivated and these products are heavily regulated at all stages of production, from seed-to-sale. These products come from licensed producers, are developed by licensed processors or manufacturers, and are sold to the public through licensed retailers or dispensaries. Marijuana-CBD products may also contain significant levels of THC.

 

On the other hand, CBD derived from industrial hemp (“Hemp-CBD”) can be argued as falling completely outside the CSA because the cultivation of industrial hemp was legalized by Section 7606 of the Agricultural Act of 2014 (the “2014 Farm Bill”). Industrial hemp is defined as the cannabis plant with less than .3% THC. The 2014 Farm Bill also requires that industrial hemp to be cultivated under a state agricultural pilot program. Some states also require a license to cultivate or process industrial hemp into other products like Hemp-CBD.

 

The distribution of Hemp-CBD products is arguably legal under federal law because the 2014 Farm Bill does not explicitly limit distribution. In oral arguments during HIA v. DEA, the DEA admitted that the 2018 Farm Bill pre-empted the CSA with regards to industrial hemp. The DEA has rarely taken any enforcement action against distributors of Hemp-CBD, in part because Congress has limited the DEA’s ability to use federal funds to do so and because the DEA would have to legally establish that the CSA does in fact cover Hemp-CBD. However, the DEA, FDA, and other federal agencies issued guidance in 2016 stating that the 2014 Farm Bill did not permit the interstate transfer or commercial sale of industrial hemp. Several states like Idaho prohibit the distribution of Hemp-CBD. Other states like Ohio, Michigan, and California significantly restrict the distribution of Hemp-CBD.

 

Even though Hemp-CBD does not fall within the CSA, Hemp-CBD products have not been approved by the FDA. This is also true of Marijuana-CBD. This means that even cannabis derived Marijuana-CBD and Hemp-CBD products containing less than .1% THC are not approved CBD drugs for lack of FDA approval.

 

There is always some risk of enforcement action against Hemp-CBD distributors, as the budgetary restriction that prevented the DEA from using funds to prosecute industrial hemp distributors expired on September 30, 2018. It is also possible that the FDA could take a more aggressive approach to limit the distribution of CBD products.

 

RISKS RELATED TO OUR SECURITIES

 

An investment in our shares is highly speculative.

 

The shares of our common stock are highly speculative in nature, involve a high degree of risk and should be purchased only by persons who can afford to lose the entire amount invested in the common stock. Before purchasing any of the shares of common stock, you should carefully consider the risk factors contained herein relating to our business and prospects. If any of the risks presented herein actually occur, our business, financial condition or operating results could be materially adversely affected. In such case, the trading price of our common stock could decline, and you may lose all or part of your investment.

 

 
19

Table of Contents

 

The market price of our Common Stock may fluctuate significantly in the future.

 

We expect that the market price of our Common Stock may fluctuate in response to one or more of the following factors, many of which are beyond our control:

 

competitive pricing pressures;

 

our ability to market our services on a cost-effective and timely basis;

 

changing conditions in the market;

 

changes in market valuations of similar companies;

 

stock market price and volume fluctuations generally;

 

regulatory developments;

 

fluctuations in our quarterly or annual operating results;

 

additions or departures of key personnel; and

 

future sales of our Common Stock or other securities.

 

The price at which you purchase shares of our Common Stock may not be indicative of the price that will prevail in the trading market. Shareholders may experience wide fluctuations in the market price of our securities. These fluctuations may have a negative effect on the market price of our securities and may prevent a shareholder from obtaining a market price equal to the purchase price such shareholder paid when the shareholder attempts to sell our securities in the open market. In these situations, the shareholder may be required either to sell our securities at a market price, which is lower than the purchase price the shareholder paid, or to hold our securities for a longer period than planned. An inactive or low trading market may also impair our ability to raise capital by selling shares of capital stock. You may be unable to sell your shares of Common Stock at or above your purchase price, which may result in substantial losses to you and which may include the complete loss of your investment. Any of the risks described above could adversely affect our sales and profitability and the price of our Common Stock.

 

There is no active public trading market for our common stock and an active market may never develop.

 

The public trading market for our common stock on the OTCMarkets OTCQB tier, has reflected an uneven and inactive market. Market liquidity will depend on the perception of our operating business and any steps that our management might take to bring us to the awareness of investors. There can be no assurance given that there will be any awareness generated. Consequently, investors may be unable to liquidate their investment or liquidate it at a price that reflects the value of the business. As a result, holders of our securities may not find purchasers for our securities should they to sell securities held by them. Consequently, only investors having no need for liquidity in their investment should purchase our securities and who can hold our securities for an indefinite period.

 

We have authorized 100,000,000 Preferred Shares and 100,000,000 Class B Common Shares that may result in our officers having the ability to influence stockholder decisions.

 

The board of directors has the power to establish the dividend rates, liquidation preferences, and voting rights of any series of preferred stock, and these rights may be superior to the rights of holders of the Shares. The board of directors may also establish redemption and conversion terms and privileges with respect to any shares of preferred stock; as such, if we establish such terms and privileges to our preferred shares and we sell or issue preferred shares in future transactions to new investors such investors in subsequent transactions could gain rights, preferences and privileges senior to those of holders of our common stock. Any such preferences may operate to the detriment of the rights of the holders of the Shares, and further, could be used by the board of directors as a device to prevent a change in control of the Registrant, include additional voting power to our officers giving them control over a majority of our outstanding voting power, enabling them to control future stock-based acquisition transactions, to fund employee equity incentive programs, and give them the ability to elect certain directors and to determine the outcome of all matters submitted to a vote of our stockholders. This concentrated control eliminates other stockholders’ ability to influence corporate matters.

 

We issued 25,000,000 Class B Shares to our Chief Executive Officer, which entitled him to 2,500,000,000 votes and to control corporate matters.

 

We expect to seek additional financing in order to provide working capital to our business. Our board of directors has the power to issue any or all of such authorized but unissued shares at any price they consider sufficient, without stockholder approval. The issuance of additional shares of common stock in the future will reduce the proportionate ownership and voting power of current stockholders

 

 
20

Table of Contents

 

Future sales and issuances of our capital stock, exercise of warrants outstanding or rights to purchase capital stock could result in additional dilution of the percentage ownership of our stockholders and could cause our stock price to decline.

 

We may issue additional securities and future sales and issuances of our capital stock or rights to purchase our capital stock could result in substantial dilution to our existing stockholders. We may sell common stock, convertible securities and other equity securities in one or more transactions at prices and in a manner as we may determine from time to time. If we sell any such securities in subsequent transactions, investors may be materially diluted. Additionally, because we have 9,094,853 Warrants outstanding, which are exercisable for five cents per share with a warrant exercise period of 5 years, any material exercise of the Warrants will because substantial dilution to your shares.

 

Any market that develops in shares of our common stock will be subject to the penny stock regulations and restrictions pertaining to low priced stocks that will create a lack of liquidity and make trading difficult or impossible.

 

The trading of our securities will be in the over-the-counter market, which is commonly referred to as the OTCQB as maintained by FINRA. As a result, an investor may find it difficult to dispose of, or to obtain accurate quotations as to the price of our securities.

 

Rule 3a51-1 of the Exchange Act establishes the definition of a “penny stock,” for purposes relevant to us, as any equity security that has a minimum bid price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to a limited number of exceptions that are not available to us. It is likely that our shares will be penny stocks for the immediately foreseeable future. This classification severely and adversely affects any market liquidity for our common stock.

 

For any transaction involving a penny stock, unless exempt, the penny stock rules require that a broker or dealer approve a person’s account for transactions in penny stocks and the broker or dealer receive from the investor a written agreement to the transaction setting forth the identity and quantity of the penny stock to be purchased. In order to approve a person’s account for transactions in penny stocks, the broker or dealer must obtain financial information and investment experience and objectives of the person and make a reasonable determination that the transactions in penny stocks are suitable for that person and that that person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.

 

The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prepared by the SEC relating to the penny stock market, which, in highlight form, sets forth:

 

the basis on which the broker or dealer made the suitability determination, and

 

that the broker or dealer received a signed, written agreement from the investor prior to the transaction.

 

Disclosure also must be made about the risks of investing in penny stock in both public offerings and in secondary trading and commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Additionally, monthly statements must be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.

 

Because of these regulations, broker-dealers may not wish to engage in the above-referenced necessary paperwork and disclosures and/or may encounter difficulties in their attempt to sell shares of our common stock, which may affect the ability of selling shareholders or other holders to sell their shares in any secondary market and have the effect of reducing the level of trading activity in any secondary market. These additional sales practice and disclosure requirements could impede the sale of our securities when our securities become publicly traded. In addition, the liquidity for our securities may decrease, with a corresponding decrease in the price of our securities. Our shares, probably, will be subject to such penny stock rules for the foreseeable future and our shareholders will, likely, find it difficult to sell their securities.

 

 
21

Table of Contents

 

Registered Broker-Dealers and Clearing firms are refusing to trade or clear stocks that are directly or indirectly related to the cannabis and hemp industries, which may negatively impact the trading of our common stock shares.

 

Because registered Broker-Dealers and Clearing firms are refusing to trade or clear stocks that represent companies directly or indirectly related to the cannabis and hemp industries, certain brokerage firms can no longer trade such stocks on behalf of their clients. Should this trend increase, trading in our stock may be negatively impacted, including lower trading volume and stock prices.

 

If we are unable to establish appropriate internal financial reporting controls and procedures, it could cause us to fail to meet our reporting obligations, result in the restatement of our financial statements, harm our operating results, subject us to regulatory scrutiny and sanction, cause investors to lose confidence in our reported financial information and have a negative effect on the market price for shares of our common stock.

 

Effective internal controls are necessary for us to provide reliable financial reports and to effectively prevent fraud. We maintain a system of internal control over financial reporting, which is defined as a process designed by, or under the supervision of, our principal executive officer and principal financial officer, or persons performing similar functions, and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

 

The forward-looking statements contained herein report may prove incorrect.

 

This filing contains certain forward-looking statements, including among others: (i) anticipated trends in our financial condition and results of operations; (ii) our business strategy for expanding our business through regional centers; and (iii) our ability to distinguish ourselves from our current and future competitors. These forward-looking statements are based largely on our current expectations and are subject risks and uncertainties. Actual results could differ materially from these forward-looking statements. In addition to the other risks described elsewhere in this “Risk Factors” discussion, important factors to consider in evaluating such forward-looking statements include: (i) changes to external competitive market factors or in our internal budgeting process which might impact trends in our results of operations; (ii) anticipated working capital or other cash requirements; (iii) changes in our business strategy or an inability to execute our strategy due to unanticipated changes in the environmental cleanup industry; and (iv) various competitive factors that may prevent us from competing successfully in the marketplace. Considering these risks and uncertainties, many of which are described in greater detail elsewhere in this “Risk Factors” discussion, there can be no assurance that the events predicted in forward-looking statements contained in this Prospectus will, in fact, transpire.

 

Cautionary Note

 

We have sought to identify what we believe to be the most significant risks to our business, but we cannot predict whether, or to what extent, any of such risks may be realized nor can we guarantee that we have identified all possible risks that might arise. Investors should carefully consider all of such risk factors before making an investment decision with respect to our common stock.

 

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

FORWARD-LOOKING STATEMENTS

 

This document contains “forward-looking statements”. 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.

 

 
22

Table of Contents

  

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.

 

Overview

 

We are a Nevada corporation formed on August 30, 1985. Our headquarters are in Denver, Colorado. We have been engaged in our current business model since June of 2016, as a result of our having been discharged from a receivership and acquiring Life Marketing, Inc., which was in a different industry as our previous business.

 

We have experienced recurring losses and negative cash flows from operations since inception, including in our current business model. We anticipate that our expenses will increase as we ramp up our expansion, which likely will lead to additional losses, until such time that we approach profitability, or which there are no assurances. We have relied on equity financing to fund operations. There can be no guarantee that we will ever become profitable, or that adequate additional financing will be realized in the future or otherwise may be available to us on acceptable terms, or at all. If we are unable to raise capital when needed, we would be forced to delay, reduce or eliminate our expansion efforts. We will need to generate significant revenues to achieve profitability, of which there are no assurances.

 

Trends and Uncertainties

 

Our business is subject to the following trends and uncertainties:

 

 

Expansion of live streaming on Facebook could sway our users to spend more time away from our Networks.

 

 

Social video is generally reaching saturation across social networks in general.

 

 

Social platforms embrace strong governance policies, i.e. when content is inappropriate or violates end user agreement, how much content is posted on our Networks may be affected.

 

 

Brands fatigue from new tools and tactics on social networks could result in fewer users embracing some of our new business and E-Commerce tools on our Networks.

 

Going Concern

 

The accompanying consolidated financial statements have been prepared on a going concern basis, which assumes that we will be able to realize our assets and discharge our liabilities and commitments in the normal course of business for the foreseeable future. The Company had an accumulated deficit of $31,887,273 at June 30, 2020, had a net loss of $323,779, and gained net cash of $3,878 for the six months ended June 30, 2020. These factors raise substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern is dependent upon our generating profitable operations in the future and/or to obtain the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they come due. Our management intends to finance operating costs over the next nine months with existing cash on hand and the sale of our common stock. While the we believe that we will be successful in obtaining the necessary financing and generating revenue to fund our operations, meet regulatory requirements and achieve commercial goals, there are no assurances that such additional funding will be achieved and that we will succeed in its our future operations.

 

 
23

Table of Contents

  

We will attempt to overcome the going concern opinion by increasing our revenues, as follows:

 

 

By licensing additional Social Network and E-Commerce Platforms;

 

 

By increasing our marketing staff to enhance our “WeedLife” brand to cannabis/hemp related consumers and businesses located throughout the world;

 

 

By increasing our social media staff to increase our monthly network traffic from our current 30 million-page views, to support the sales staff growth in online advertising sales on our cannabis/hemp related websites and mobile apps;

 

 

By increasing our sales staff for online advertising and monthly digital subscription sales on our cannabis/hemp related websites and mobile apps;

 

 

By increasing our licensee tech and R&D support to Sports Social Network for the increase of membership acquisition, page view traffic, online advertising sales and E-Commerce transactions on all of our sports social network websites and mobile apps; and

 

 

By increasing our licensee tech and R&D support to Real Estate Social Network. for the sales of online advertising and monthly digital subscription services to real estate professionals on our social network in the international real estate community.

 

The foregoing goals will increase expenses and lead to possible net losses. There is no assurance that we will ever be profitable or that debt or equity financing will be available to us. The consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should we be unable to continue as a going concern. There is no assurance we will be successful in any of these goals.

 

 
24

Table of Contents

  

Segment Information

 

The Company has one reportable segment called MjLink.com Inc. the leading social networking platform and virtual event company of the cannabis industry worldwide. MjLink is one of the largest cannabis and hemp technology platforms for connecting professionals and consumers together.

  

MJLINK.COM INC

SEGMENTED BALANCE SHEETS

(unaudited)

 

 

 

June 30,

2020

 

 

December 31,

2019

 

ASSETS

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

Cash

 

$ 500

 

 

$ 5,500

 

Accounts receivable

 

 

10,500

 

 

 

10,500

 

Accounts receivable – related parties

 

 

32,500

 

 

 

32,500

 

Prepaid Expenses

 

 

1,863

 

 

 

4,659

 

Total Assets

 

$ 45,363

 

 

$ 53,159

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

 

Accounts Payable

 

$ -

 

 

$ -

 

Accrued Expenses

 

 

-

 

 

 

-

 

Deferred Revenue

 

 

8,542

 

 

 

24,896

 

Intercompany due to parent

 

 

354,432

 

 

 

356,326

 

Total Current Liabilities

 

 

362,974

 

 

 

381,222

 

Long Term Debt

 

 

-

 

 

 

-

 

Total Liabilities

 

$ 362,974

 

 

$ 381,222

 

 

 

 

 

 

 

 

 

 

Stockholders’ Equity (Deficit):

 

 

 

 

 

 

 

 

Common Stock par value

 

 

15

 

 

 

15

 

Additional paid in capital

 

 

-

 

 

 

-

 

Common Stock to be issued

 

 

-

 

 

 

-

 

Common Stock Receivable

 

 

-

 

 

 

-

 

Preferred Stock par value

 

 

-

 

 

 

-

 

Total Stockholders’ Equity (Deficit)

 

 

(317,626 )

 

 

(328,078 )

Total Equity

 

 

(317,611 )

 

 

(328,063 )

Total Liabilities and Stockholders’ Equity

 

$ 45,363

 

 

$ 53,159

 

 

See accompanying notes to these unaudited condensed consolidated financial statements.

 

 
25

Table of Contents

  

MJLINK.COM INC

SEGMENTED STATEMENTS OF OPERATIONS

(unaudited)

  

 

 

For the Three Months Ended
June 30,

 

 

For the Six Months Ended
June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Digital marketing revenue

 

$ -

 

 

$ 55,200

 

 

$ -

 

 

$ 55,200

 

Digital subscription revenue

 

 

7,292

 

 

 

-

 

 

 

16,354

 

 

 

-

 

Advertising revenue

 

 

-

 

 

 

-

 

 

 

-

 

 

 

2,500

 

Event revenue

 

 

-

 

 

 

75,985

 

 

 

-

 

 

 

75,985

 

Total revenue

 

 

7,292

 

 

 

131,185

 

 

 

16,354

 

 

 

133,685

 

Costs of goods sold

 

 

(11,598 )

 

 

180,403

 

 

 

(10,816 )

 

 

180,403

 

Gross margin

 

 

18,890

 

 

 

(49,218 )

 

 

27,170

 

 

 

(46,718 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation expense

 

 

1,397

 

 

 

65,258

 

 

 

4,343

 

 

 

139,336

 

Non-cash stock expense

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Sales and marketing

 

 

2,378

 

 

 

25,969

 

 

 

7,227

 

 

 

51,453

 

General and administrative

 

 

1,684

 

 

 

22,730

 

 

 

5,147

 

 

 

33,108

 

Total operating expenses

 

 

5,469

 

 

 

113,957

 

 

 

16,717

 

 

 

223,897

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (Loss) from operations

 

 

13,421

 

 

 

(163,175 )

 

 

10,453

 

 

 

(270,615 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Other non-operating expenses

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

 

Total other expenses

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income (Loss)

 

$ 13,421

 

 

$ (163,175 )

 

$ 10,453

 

 

$ (270,615 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) per share  Basic and Diluted

 

$ 8.95

 

 

$ (108.78 )

 

$ 6.97

 

 

$ (180.41 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and Diluted

 

 

1,500

 

 

 

1,500

 

 

 

1,500

 

 

 

1,500

 

 

See accompanying notes to these unaudited condensed consolidated financial statements.

 

 
26

Table of Contents

 

MJLINK.COM, INC.

SEGMENTED STATEMENTS OF STOCKHOLDERS EQUITY (DEFICIT)

(unaudited)

 

 

 

Preferred Stock

 

 

Common Stock

 

 

Additional Paid

 

 

Common
Stock to be

 

 

Common Stock

 

 

Accumulated

 

 

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

in Capital

 

 

Issued

 

 

Receivable

 

 

Deficit

 

 

Total

 

Balance, December 31, 2019

 

 

-

 

 

 

-

 

 

 

1,500

 

 

$ 15

 

 

$ -

 

 

$ -

 

 

$ -

 

 

$ (328,078 )

 

 

(328,063 )

Common stock issued for service

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Common stock issued to officers

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Common stock issued to investors

 

 

 

 

 

 

 

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

 

 

 

-

 

 

 

-

 

Common stock cancelled

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Fair value of warrants issued

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Fair value of beneficial conversion feature for convertible notes

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Net Loss for year ended Mar 31, 2020

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(2,969 )

 

 

(2,969 )

Balance, March 31, 2020

 

 

-

 

 

 

-

 

 

 

1,500

 

 

 

15

 

 

$ -

 

 

$ -

 

 

$ -

 

 

$ (331,047 )

 

$ (331,032 )

Common stock issued for service

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Common stock issued to officers

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Common stock issued to investors

 

 

-

 

 

 

 

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Common stock cancelled

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Fair value of warrants issued

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Fair value of beneficial conversion feature for convertible notes

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Net Loss for quarter ended June 30, 2020

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

 

 

 

-

 

 

 

13,421

 

 

 

13,421

 

Balance, June 30, 2020

 

 

-

 

 

 

-

 

 

 

1,500

 

 

 

15

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(317,626 )

 

 

(317,611 )

 

See accompanying notes to these unaudited condensed consolidated financial statements.

 

 
27

Table of Contents

 

MJLINK.COM INC

SEGMENTED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

 

 

 

For the Three Months Ended
June 30,

 

 

 

2020

 

 

2019

 

Cash flow from operating activities:

 

 

 

 

 

 

Net Income (Loss)

 

$ 10,453

 

 

$ (270,615 )

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

 

Noncash stock-based compensation

 

 

-

 

 

 

-

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

-

 

 

 

(5,500 )

Prepaids

 

 

2,795

 

 

 

6,000

 

Accounts payable and accrued expenses

 

 

-

 

 

 

-

 

Intercompany due to parent

 

 

(18,248 )

 

 

(270,115 )

Net cash used in operating activities

 

 

(5,000 )

 

 

-

 

 

 

 

 

 

 

 

 

 

Cash flows used in investing activities:

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Loan from related parties

 

 

-

 

 

 

-

 

Proceeds from the sale of common stock

 

 

-

 

 

 

-

 

Stock Receivable

 

 

-

 

 

 

-

 

Stock Payable

 

 

-

 

 

 

-

 

Net cash provided by financing activities

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Net increase / decrease in cash

 

 

(5,000 )

 

 

-

 

Cash at beginning of period

 

 

5,500

 

 

 

-

 

Cash at end of period

 

$ 500

 

 

$ -

 

 

 

 

 

 

 

 

 

 

Supplemental Disclosures:

 

 

 

 

 

 

 

 

Cash paid during the year for:

 

 

 

 

 

 

 

 

Interest

 

$ -

 

 

 

-

 

Income taxes

 

$ -

 

 

$ -

 

Supplemental disclosure of non-cash activities:

 

 

 

 

 

 

 

 

Warrants issued for services

 

$ -

 

 

$ -

 

Interest related to amortization of beneficial conversion feature

 

$ -

 

 

 

-

 

 

See accompanying notes to these unaudited condensed consolidated financial statements.

 

 
28

Table of Contents

   

COMPARATIVE RESULTS FOR FISCAL YEARS

 

Consolidated Performance - Results of Operations for the 3-month periods ended June 30, 2020 and 2019

 

Revenues

 

For the 3-month period ending June 30, 2020, we recognized revenue from licensing of $62,500 compared to zero dollars of revenue for the 3-month period ending June 30, 2019. The increase is due to a renewed licensing deal with two of our licensees that provides for a minimum guarantee annual payment of $125,000 from each of our two licensees rather than relying on transactional usage of our platform in first quarter 2019.

 

For the 3-month period ending June 30, 2020, we recognized $7,292 digital subscription revenue as compared to zero for the 3-month period ending June 30, 2019. The increase in revenue is primarily attributable to recognizing digital subscription service of MjInvest.com over twelve months of service. Our current deferred revenue balance is $13,041 for MjInvest’s digital subscription service.

 

For the 3-month period ending June 30, 2020, we recognized zero event revenue as compared to $75,985 for the 3-month period ending June 30, 2019. The decrease is primarily attributable to the mandatory COVID-19 shutdown, which forced our personnel to cancel all in-person contact at tradeshows, with investors and travel for the foreseeable future.

 

For the 3-month period ending June 30, 2020, we recognized zero digital marketing revenue as compared to $55,200 for the 3-month period ending June 30, 2019. The decrease is primarily attributable to the mandatory COVID-19 shutdown, which forced our personnel to cancel all in-person contact at tradeshows, with investors and travel for the foreseeable future and as a result there were no marketing campaigns to promote attendees at our events.

 

Cost of Revenue

 

Cost of revenue was a negative $10,744 for the 3-month period ending June 30, 2020 compared to $181,934 the 3-month period ending June 30, 2019, representing an increase of $192,678 or 106%. The $192,678 decrease is primarily attributable to the mandatory COVID-19 shutdown, which forced our personnel to cancel all in-person contact at tradeshows, with investors and travel for the foreseeable future, plus the recoupment of some of our initial costs to set up events in the first quarter 2020.

 

 
29

Table of Contents

  

Operating Expenses

 

Cash-paid compensation expense decreased by $281,947 or 71.3% to $113,491 for the 3-month period ending June 30, 2020 from $395,437 for the 3-month period ending June 30, 2020. The $281,947 decrease is primarily attributable to the resignation of George Jage as MjLink’s President in June 2019, which was not refilled, and reducing the need for consultants and professionals that were required to meet MjLink’s growth strategies at the onset of January 2019.

 

During the 3-month period ending June 30, 2020, we recognized zero of non-cash stock-based compensation expense for employees, consultants, and professionals compared to $774,988 for the 3-month period ending June 30, 2019. The decrease is primarily due to a reduced need for additional headcount, streamlining headcount, and being able to maximize productivity with fewer hires as compared to our hiring plans in 2019.

 

During the 3-month periods ending June 30, 2020 and 2019, we recognized zero of non-cash stock-based compensation expense for warrants for the respective quarters.

 

Sales and marketing expense decreased $34,466 or 92.9% to $2,650 for the 3-month period ending June 30, 2020 from $37,115 for the 3-month period ending June 30, 2019. The $34,466 decrease is primarily attributable to the mandatory COVID-19 shutdown, which forced MjLink to cancel any in-person events for the foreseeable future including in its first quarter 2020 as opposed to our investing/ramping-up efforts in 2019.

 

General and administrative expense decreased by $41,603, or 34.8% to $77,815 for the 3-month period ending June 30, 2020 from $119,418 for the 3-month period ending June 30, 2019. The decrease is primarily attributable to the mandatory COVID-19 shutdown, which forced our personnel to cancel all in-person contact at tradeshows, with investors and travel for the foreseeable future. In addition, unrelated to COVID 19, the decrease is also due to a reduced need for additional headcount, streamlining headcount, and being able to maximize productivity with fewer hires as compared to our hiring plans in 2019.

 

Other expense

 

During the three months ended June 30, 2020, we incurred $12,631 of other income from gain on conversion of convertible debt of $44,693 associated with converting our debt into common shares to our debt holders, which offset the interest charges of $32,062 from our convertible debt outstanding. During the three months ended June 30, 2019 we had zero other expenses or income.

 

Net Loss

 

Our net loss for the for the 3-month period ending June 30, 2020 was $100,789 compared to a net loss of $1,420,231 for the 3-month period ending June 30, 2019. The decrease in net loss of $1,319,442 is a direct result of lack of issuance of non-cash stock-based compensation expenses to our personnel, decrease in operating expenses, and reduction in revenue due to the unprecedented and mandatory COVID-19 shutdown.

 

Consolidated Performance - Results of Operations for the 6-month periods ended June 30, 2020 and 2019

 

Revenues

 

For the 6-month period ending June 30, 2020, we recognized revenue from licensing of $125,000 compared to $25,000 of revenue for the 6-month period ending June 30, 2019. The increase is due to a renewed licensing deal with two of our licensees that provides for a minimum guarantee annual payment of $125,000 from each of our two licensees rather than relying on transactional usage of our platform in first quarter 2019.

 

 
30

Table of Contents

  

For the 6-month period ending June 30, 2020, we recognized $16,354 digital subscription revenue as compared to zero for the 6-month period ending June 30, 2019. The increase in revenue is primarily attributable to recognizing digital subscription service of MjInvest.com over twelve months of service. Our current deferred revenue balance is $13,041 for MjInvest’s digital subscription service.

 

For the 6-month period ending June 30, 2020, we recognized zero advertising revenue as compared to $2,500 for the 6-month period ending June 30, 2019. The decrease in revenue is primarily attributable to eliminating our sales and marketing staff during the latter part of fiscal year 2019.

 

For the 6-month period ending June 30, 2020, we recognized zero event revenue as compared to $75,985 for the 3-month period ending June 30, 2019. The decrease is primarily attributable to the mandatory COVID-19 shutdown, which forced our personnel to cancel all in-person contact at tradeshows, with investors and travel for the foreseeable future.

 

For the 6-month period ending June 30, 2020, we recognized zero digital marketing revenue as compared to $55,200 for the 6-month period ending June 30, 2019. The decrease is primarily attributable to the mandatory COVID-19 shutdown, which forced our personnel to cancel all in-person contact at tradeshows, with investors and travel for the foreseeable future and as a result there were no marketing campaigns to promote attendees at our events.

 

Cost of Revenue

 

Cost of revenue was a negative $8,879 for the 6-month period ending June 30, 2020 compared to $183,466 the 6-month period ending June 30, 2019, representing a decrease of $192,145 or 104%. The $192,145 decrease is primarily attributable to the mandatory COVID-19 shutdown, which forced our personnel to cancel all in-person contact at tradeshows, with investors and travel for the foreseeable future, plus the recoupment of some of our initial costs to set up events in the first quarter 2020.

 

Operating Expenses

 

Cash-paid compensation expense decreased by $416,146 or 59.8% to $279,969 for the 6-month period ending June 30, 2020 from $695,115 for the 6-month period ending June 30, 2020. The $416,146 decrease is primarily attributable to the resignation of George Jage as MjLink’s President in June 2019, which was not refilled, and reducing the need for consultants and professionals that were required to meet MjLink’s growth strategies in 2019.

 

During the 6-month period ending June 30, 2020, we recognized zero of non-cash stock-based compensation expense for employees, consultants, and professionals compared to $1,801,333 for the 6-month period ending June 30, 2019. The decrease is primarily due to a reduced need for additional headcount, streamlining headcount, and being able to maximize productivity with fewer hires as compared to our hiring plans in 2019.

 

During the 6-month periods ending June 30, 2020 and 2019, we recognized zero of non-cash stock-based compensation expense for warrants for the respective quarters.

 

Sales and marketing expense decreased $100,373 or 92.4% to $8,282 for the 6-month period ending June 30, 2020 from $108,655 for the 6-month period ending June 30, 2019. The $100,373 decrease is primarily attributable to the mandatory COVID-19 shutdown, which forced MjLink to cancel any in-person events for the foreseeable future including in its first quarter 2020 as opposed to our investing/ramping-up efforts in the first quarter of 2019.

 

General and administrative expense decreased by $104,912, or 44.8% to $129,402 for the 6-month period ending June 30, 2020 from $234,314 for the 6-month period ending June 30, 2019. The decrease is primarily attributable to the mandatory COVID-19 shutdown, which forced our personnel to cancel all in-person contact at tradeshows, with investors and travel for the foreseeable future. In addition, unrelated to COVID 19, the decrease is also due to a reduced need for additional headcount, streamlining headcount, and being able to maximize productivity with fewer hires as compared to our hiring plans in 2019.

 

 
31

Table of Contents

 

Other expense

 

During the 6-months ended June 30, 2020, we incurred $56,159 of other expenses from interest charges of $60,563 from our convertible debt outstanding and a net gain of $4,400 associated with converting our debt into common shares to our debt holders. During the 6-months ended June 30, 2019 we had zero other expenses.

 

Net Loss

 

Our net loss for the for the 6-month period ending June 30, 2020 was $323,779 compared to a net loss of $2,907,772 for the 6-month period ending June 30, 2019. The decrease in net loss of $1,264,500 is a direct result of lack of issuance of non-cash stock-based compensation expenses to our personnel and a decrease in operating expenses due to the unprecedented and mandatory COVID-19 shutdown.

 

Segmented Performance - Results of Operations for the 3-month periods ended June 30, 2020 and 2019

 

Revenues

 

For the 3-month period ending June 30, 2020, MjLink recognized $7,292 digital subscription revenue as compared to zero for the 3-month period ending June 30, 2019. The increase in revenue is primarily attributable to recognizing digital subscription service of MjInvest.com over twelve months of service. Our current deferred revenue balance is $13,041 for MjInvest’s digital subscription service.

 

For the 3-month period ending June 30, 2020, we recognized zero event revenue as compared to $75,985 for the 3-month period ending June 30, 2019. The decrease is primarily attributable to the mandatory COVID-19 shutdown, which forced our personnel to cancel all in-person contact at tradeshows, with investors and travel for the foreseeable future.

 

For the 3-month period ending June 30, 2020, we recognized zero digital marketing revenue as compared to $55,200 for the 3-month period ending June 30, 2019. The decrease is primarily attributable to the mandatory COVID-19 shutdown, which forced our personnel to cancel all in-person contact at tradeshows, with investors and travel for the foreseeable future and as a result there were no marketing campaigns to promote attendees at our events.

 

Cost of Revenue

 

Cost of revenue was a negative $11,598 for the 3-month period ending June 30, 2020 compared to $180,403 the 3-month period ending June 30, 2019, representing a decrease of or 106.4%. The $192,005 decrease is primarily attributable to the mandatory COVID-19 shutdown, which forced our personnel to cancel all in-person contact at tradeshows, with investors and travel for the foreseeable future, plus the recoupment of some of our initial costs to set up events in the first quarter 2020.

 

Operating Expenses

 

Cash-paid compensation expense decreased by $63,861 or 97.9% to $1,397 for the 3-month period ending June 30, 2020 from $65,258 for the 3-month period ending June 30, 2020. The $63,861 decrease is primarily attributable to the resignation of George Jage as MjLink’s President in June 2019, which was not refilled, and reducing the need for consultants and professionals that were required to meet MjLink’s growth strategies in 2019.

 

During the 3-month periods ending June 30, 2020 and 2019, we recognized zero non-cash stock-based compensation expense for employees, consultants, and professionals.

 

Sales and marketing expense decreased by $23,591 or 90.8% to $2,378 for the 3-month period ending June 30, 2020 from $25,969 for the 3-month period ending June 30, 2019. The $23,591or decrease is primarily attributable to the mandatory COVID-19 shutdown which forced MjLink to cancel any in-person events for the foreseeable future including in its first quarter 2020. At this time last year, the Company was investing and ramping-up its efforts for in-person events.

 

 
32

Table of Contents

 

General and administrative expense decreased by $21,037, or 92.6% to $1,693 for the 3-month period ending June 30, 2020 from $22,730 for the 3-month period ending June 30, 2019. The decrease is primarily attributable to the mandatory COVID-19 shutdown, which forced our personnel to cancel all in-person contact at tradeshows, with investors and travel for the foreseeable future. In addition, unrelated to COVID 19 the decrease is also due to a reduced need for additional headcount, streamlining headcount, and being able to maximize productivity with fewer hires as compared to our hiring plans in 2019.

 

Other expense

 

During the three months ended June 30, 2020 and 2019, we incurred zero other expenses for each respective quarter.

 

Net Loss

 

Our net profit for the for the 3-month period ending June 30, 2020 was $13,421 compared to a net loss of $163,175 for the 3-month period ending June 30, 2019. The net profit is a direct result of recouping some of our initial costs to set up events in the first quarter 2020 due to suspending all in-person MjLink revenue generating activities from the unprecedented and mandatory COVID-19 shutdown

 

Segmented Performance - Results of Operations for the 6-month periods ended June 30, 2020 and 2019

 

Revenues

 

For the 6-month period ending June 30, 2020, we recognized $16,354 digital subscription revenue as compared to zero for the 6-month period ending June 30, 2019. The increase in revenue is primarily attributable to recognizing digital subscription service of MjInvest.com over twelve months of service. Our current deferred revenue balance is $13,041 for MjInvest’s digital subscription service.

 

For the 6-month period ending June 30, 2020, we recognized zero advertising revenue as compared to $2,500 for the 6-month period ending June 30, 2019. The decrease in revenue is primarily attributable to eliminating our sales and marketing staff during the latter part of fiscal year 2019.

 

For the 6-month period ending June 30, 2020, we recognized zero event revenue as compared to $75,985 for the 6-month period ending June 30, 2019. The decrease is primarily attributable to the mandatory COVID-19 shutdown, which forced our personnel to cancel all in-person contact at tradeshows, with investors and travel for the foreseeable future.

 

For the 6-month period ending June 30, 2020, we recognized zero digital marketing revenue as compared to $55,200 for the 6-month period ending June 30, 2019. The decrease is primarily attributable to the mandatory COVID-19 shutdown, which forced our personnel to cancel all in-person contact at tradeshows, with investors and travel for the foreseeable future and as a result there were no marketing campaigns to promote attendees at our events.

 

Cost of Revenue

 

Cost of revenue was a negative $10,816 for the 3-month period ending June 30, 2020 compared to $180,403 the 6-month period ending June 30, 2019, representing a decrease of or 106.0%. The $191,291 decrease is primarily attributable to the mandatory COVID-19 shutdown, which forced our personnel to cancel all in-person contact at tradeshows, with investors and travel for the foreseeable future, plus the recoupment of some of our initial costs to set up events in the first quarter 2020.

 

Operating Expenses

 

Cash-paid compensation expense decreased by $134,993 or 96.9% to $4,343 for the 6-month period ending June 30, 2020 from $139,336 for the 6-month period ending June 30, 2020. The $134,993 decrease is primarily attributable to the resignation of George Jage as MjLink’s President in June 2019, which was not refilled, and reducing the need for consultants and professionals that were required to meet MjLink’s growth strategies at the onset of January 2019.

 

During the 6-month periods ending June 30, 2020 and 2019, we recognized zero non-cash stock-based compensation expense for employees, consultants, and professionals.

 

 
33

Table of Contents

 

Sales and marketing expense decreased by $44,226 or 86.0% to $7,227 for the 6-month period ending June 30, 2020 from $51,453 for the 6-month period ending June 30, 2019. The $44,226 decrease is primarily attributable to the mandatory COVID-19 shutdown, which forced MjLink to cancel any in-person events for the foreseeable future including in its first quarter 2020. At this time last year, we were investing and ramping-up its efforts for in-person events.

 

General and administrative expense decreased by $27,961, or 84.5% to $5,147 for the 6-month period ending June 30, 2020 from $33,108 for the 6-month period ending June 30, 2019. The decrease is primarily attributable to the mandatory COVID-19 shutdown, which forced our personnel to cancel all in-person contact at tradeshows, with investors and travel for the foreseeable future. In addition, unrelated to COVID 19 the decrease is also due to a reduced need for additional headcount, streamlining headcount, and being able to maximize productivity with fewer hires as compared to our hiring plans in the first and second quarter 2019.

 

Other expense

 

During the 6-months ended June 30, 2020 and 2019, we incurred zero other expenses for each respective quarter.

 

Net Loss

 

Our net profit for the for the 6-month period ending June 30, 2020 was $10,453 compared to a net loss of $270,615 for the 6-month period ending June 30, 2019. The net profit is a direct result of recouping some of our initial costs to set up events in the first quarter 2020 due to suspending all in-person MjLink revenue generating activities from the unprecedented and mandatory COVID-19 shutdown

 

SEGMENTED STATEMENTS OF OPERATIONS

FOR THE YEAR ENDED JUNE 30, 2020

(unaudited)

 

 

 

Consolidated

 

 

Social Life

Network

 

 

MjLink.com

 

Revenue

 

$ 141,354

 

 

$ 125,000

 

 

$ 16,354

 

Cost of Sales

 

 

(8,679 )

 

 

2,137

 

 

 

(10,816 )

Gross Margin

 

 

150,033

 

 

 

122,863

 

 

 

27,170

 

Operating Expenses

 

 

417,652

 

 

 

400,935

 

 

 

16,717

 

Loss from Operations

 

 

(267,619 )

 

 

(278,072 )

 

 

10,453

 

Other Expenses

 

 

(56,159 )

 

 

(56,159 )

 

 

-

 

Net loss

 

$ (323,779 )

 

$ (334,231 )

 

$ 10,453

 

 

SEGMENTED BALANCE SHEETS

FOR THE YEAR ENDED JUNE 30, 2020

(unaudited)

 

 

 

Consolidated

 

 

Social Life

Network

 

 

MjLink.com

 

Cash

 

$ 15,435

 

 

$ 14,935

 

 

$ 500

 

Accounts receivable

 

 

348,500

 

 

 

305,500

 

 

 

43,000

 

Other current assets

 

 

7,363

 

 

 

359,433

 

 

 

2,363

 

 Total Asset

 

$ 370,799

 

 

$ 679,868

 

 

$ 45,363

 

Accounts payable

 

 

116,096

 

 

 

116,096

 

 

 

-

 

Other current liabilities

 

 

50,000

 

 

 

50,000

 

 

 

-

 

Deferred revenue

 

 

13,041

 

 

 

4,500

 

 

 

8,541

 

Convertible Debt

 

 

462,791

 

 

 

462,791

 

 

 

-

 

PPP Loan

 

 

163,111

 

 

 

163,111

 

 

 

-

 

Intercompany obligations

 

 

-

 

 

 

(354,433 )

 

 

354,433

 

Equity

 

 

(434,241 )

 

 

237,803

 

 

 

(317,611 )

Total Liabilities & Equity

 

$ 370,799

 

 

$ 679,868

 

 

$ 45,363

 

 
34

Table of Contents

  

Liquidity and Capital Resources

 

Cash Flows from Operating Activities

 

We have not generated positive cash flows from operating activities. For the 6-month period ending June 30, 2020, net cash outflows used in operating activities was $291,968 compared to net outflows of $1,663,820 for the 6-month period ending June 30, 2019. The decrease in cash in operating activities is primarily attributable to the mandatory COVID-19 shutdown, which forced our personnel to cancel all in-person contact at tradeshows and travel for the foreseeable future.

 

Cash Flows from Financing Activities

 

For the 6-month period ending June 30, 2020, net cash flows used in financing activities was $295,846 compared to $1,498,377 for the 6-month period ended June 30, 2019. The decrease in cash in financing activities is primarily attributable to the mandatory COVID-19 shutdown, unprecedented uncertainty in the financial markets, record unemployment figures, and a near halt in business activities for the foreseeable future created a dramatic pullback in risk appetite by current and potentially new investors.

 

Off-Balance Sheet Arrangements

 

None.

 

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk.

 

Not applicable

 

ITEM 4. Controls and Procedures.

 

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 SEC’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer/Chief Accounting Officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

 

As required by SEC Rule 15d-15(b), we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based on the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective in providing reasonable assurance in the reliability of our report as of the end of the period covered by this report. This is because we have not sufficiently developed our segregation of duties nor have we established an audit committee.

 

Changes in Internal Control over Financial Reporting

 

We had material changes in our internal control over financial reporting that occurred during our most recently completed fiscal quarter, or are reasonably likely to materially affect, our internal control over financial reporting. We rely on various information technology systems, including our newly licensed NetSuite enterprise resource planning (ERP) system, that was implemented this of first quarter of Fiscal 2019 to manage our operations, We will continue to evaluate the effectiveness of internal controls, procedures, and technology on an on-going basis to maximize efficiency and productivity.

 

 
35

Table of Contents

  

PART II – OTHER INFORMATION

 

ITEM 1. Legal Proceedings.

 

We know of no material pending legal proceedings to which we or our subsidiary is a party or of which any of our properties, or the properties of our subsidiary, is the subject. In addition, we do not know of any such proceedings contemplated by any governmental authorities.

 

We know of no material proceedings in which any of our directors, officers or affiliates, or any registered or beneficial stockholder is a party adverse to us or our subsidiary or has a material interest adverse to our company or our subsidiary.

 

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

 

On January 2, 2019, we completed an employment agreement with George Jage, President of MjLink, providing him with the ability to receive stock in the company. The agreement provides that if Mr. Jage resigns as MjLink’s President during the first 24 months of the employment agreement, all stock previously issued to him are required to be returned to MjLink’s treasury. On June 26, 2019, George Jage resigned as MjLink’s President, and no stock was issued to him.

 

On February 6, 2019, we authorized the issuance of 500,000 common stock shares to Mark DiSiena, our former Chief Financial Officer, for his CFO services; 1,000,000 common stock shares to Frederick M. Lehrer for his legal services as an independent contractor; and 50,000 common stock shares to our employee, Kelsey Higgins, for her marketing services. The shares are valued at $0.10, the closing stock price on the date of grant, for total non-cash expense of $50,000. The shares were issued during the three months ended March 31, 2019.

 

From January 1, 2019 thru March 31, 2019, we entered into subscription agreements with 9 accredited investors. We sold 5,725,000 common stock shares to the accredited investors, of which 1,200,000 common stock shares were sold at $0.05 per share for total gross proceeds of $60,000, and 4,025,000 common stock shares were sold at $0.10 per share for total gross proceeds of $402,500. As of March 31, 2019, we received $382,500 out of the $462,500, awaiting on the remaining $80,000. Subsequently, by April 17, 2019, all $80,000 was delivered to our accounts. Accordingly, 3,700,000 of the 5,725,000 shares were issued by March 31, 2019; the rest of the 2,025,000 were issued by May 1, 2019.

 

For the 6-month period ending June 30, 2020, several lenders converted their debt into 1,190,017,455 common shares at an average of $0.0010 for a value of $276,950

 

The stock issuances were exempt under Section 4(2) of the Securities Act of 1933, as amended.

 

ITEM 3. Defaults Upon Senior Securities

 

None

 

ITEM 4. Mine Safety Disclosures.

 

None

 

ITEM 5. Other information

 

None.

 

 
36

Table of Contents

 

ITEM 6. Exhibits.

 

EXHIBIT INDEX

 

Exhibit
Number

 

Description

31.1

 

Certifications of the Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2

 

Certifications of the Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1

 

Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2

 

Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS

 

XBRL Instance Document

101.SCH

 

XBRL Taxonomy Extension Schema Document

101.CAL

 

XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB

 

XBRL Taxonomy Extension Label Linkbase Document

101.PRE

 

XBRL Taxonomy Extension Presentation Linkbase Document

101.DEF

 

XBRL Taxonomy Extension Definition Linkbase Document

 

 
37

Table of Contents

  

SIGNATURES

 

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

  

 

SOCIAL LIFE NETWORK, INC.

 

 

 

 

 

Date: August 14, 2020

By:

/s/ Ken Tapp

 

 

 

Ken Tapp

 

 

 

Chief Executive Officer

 

 

 

(Principal Executive Officer & Chief Executive Officer)

 

 

 

By:

/s/ Ken Tapp

 

 

 

Ken Tapp

 

 

 

Chief Financial Officer

 

 

 

(Chief Financial Officer & Chief Accounting Officer)

 

 

 

38

 

Social Life Network (PK) (USOTC:WDLF)
Historical Stock Chart
From Nov 2021 to Dec 2021 Click Here for more Social Life Network (PK) Charts.
Social Life Network (PK) (USOTC:WDLF)
Historical Stock Chart
From Dec 2020 to Dec 2021 Click Here for more Social Life Network (PK) Charts.