UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

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

 

For the quarterly period ended March 31, 2021

 

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[X] No [  ]

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-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 [X] 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 [X]
  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 [X]

 

The Company has 7,675,367,467 common stock shares outstanding as of May 24, 2021.

 

 

 

 

 

 

TABLE OF CONTENTS

 

    Page
     
  PART I — FINANCIAL INFORMATION F-1
ITEM 1. Consolidated Financial Statements F-1
ITEM 1A. Risk Factors 1
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 14
ITEM 3. Quantitative and Qualitative Disclosures about Market Risk 15
ITEM 4. Controls and Procedures 16
     
  PART II — OTHER INFORMATION 16
ITEM 1. Legal Proceedings 16
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds 16
ITEM 3. Defaults Upon Senior Securities 17
ITEM 4. Mine Safety Disclosures 17
ITEM 5. Other Information 17
ITEM 6. Exhibits 17
  Signatures 18

 

2

 

 

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

 

 

SOCIAL LIFE NETWORK, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)

 

 

    March 31, 2021     December 31, 2020  
ASSETS                
Current Assets:                
Cash   $ 114,695     $ -  
Accounts receivable     -       52  
Accounts receivable – related party     407,500       368,000  

Prepaid expenses

    45,000       -  
Assets from discontinued operations    

-

     

28,500

 
Total current assets     567,195       396,552  
Investment–related party    

800

      -  
Total Assets   $ 567,995     $ 396,552  
                 
LIABILITIES AND STOCKHOLERS’ EQUITY (DEFICIT)                
Current Liabilities:                

Accounts payable and accrued liabilities

  $ 112,537     $ 189,169  
Cash overdraft            

307

 
Total Current Liabilities     112,537       189,476  
Loans payable – related party     169,925       113,675  
PPP Loan     163,111       163,111  
Convertible debt and accrued interest     -       128,346  
Total Liabilities     445,573       594,608  
                 
Stockholders’ Equity (Deficit):                
Common Stock par value $0.001 10,000,000,000 shares authorized, 7,443,135,871 and 6,368,332,350 shares issued, respectively     7,441,151       6,368,347  
Additional paid in capital     24,128,008       25,199,811  
Accumulated deficit    

(31,446,737

)     (31,766,214 )
Total Stockholders’ Equity (Deficit)     122,422       (198,056 )
Total Liabilities and Stockholders’ Equity   $ 567,995     $ 396,552  

 

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

 

F- 2

 

 

SOCIAL LIFE NETWORK, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

 

 

    For the Three Months Ended March 31,  
    2021     2020  
Revenues:            
Licensing revenue – related party   $ 62,500     $ 62,500  
Total revenue     62,500       62,500  
Costs of goods sold     -       1,282  
Gross margin     62,500       61,218  
                 
Operating Expenses:                
Compensation expense     43,934       63,793  
Sales and marketing     138       5,632  
General and administrative    

146,794

      143,025  
Total operating expenses     190,866      

212,450

 
                 
Income (Loss) from operations    

(128,366

)    

(151,232

)
                 
Other (Income) expense:                
Interest expense     -       28,500  
Other (income) expense     (110,854 )     40,290  
Total other expense (income)     (110,854 )     68,790  
                 
Net Income (Loss) from continuing operations   $ (17,512 )   $ (220,022 )
                 
Net income (loss) from discontinued operations   (27,700 )   (2,968 )
Net income (loss)   $ (45,212 )   $ (222,990 )
Income (loss) per share from continuing operations                
Basic     (0.00 )     (0.00 )
Diluted   $ (0.00 )   $ (0.00 )
                 
Income (loss) per share from discontinued operations                
Basic   $ (0.00 )   $ (0.00 )
Diluted   $

(0.00

)   $

(0.00

)
                 
Basic    

7,443,135,781

      556,248,107  
Diluted     7,451,800,634       2,020,195,518  

 

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

 

F- 3

 

 

SOCIAL LIFE NETWORK, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY (DEFICIT)

unaudited

 

  

    Common Stock B     Common Stock A     Additional
Paid in
    Accumulated        
    Shares     Amount     Shares     Amount     Capital     Deficit     Total  
Balance, December 31, 2019     -     $ -       140,777,231     $ 140,791     $ 31,016,394     $ (31,563,493 )   $ (406,308 )
Common stock issued to investors                     6,277,555,119       6,227,555       (5,666,864 )             560,691  
Net Loss for quarter ended December 31, 2020                                             (202,720 )     (202,720 )
Rounding                                             (1 )     (1 )
Balance, December 31, 2020     25,000,000       -       6,368,332,350       6,368,346       25,199,811       (31,766,214 )     (198,057 )
Common stock issued upon the conversion of convertible notes                     1,072,803,521       1,070,805       (854,837 )             215,968  
MJLink spinoff adjustments                                     (314,967 )     364,689       49,723  
Common stock issued in private placement                     2,000,000       2,000       98,000               100,000  
Net loss discontinued operations                                            

(27,700

)    

(27,700

)
Net loss continuing operations                                                 (17,512 )     (17,512 )
Balance, March 31, 2021     25,000,000     $ -       7,443,135,781     $ 7,441,151     $ 24,128,007     $ (31,446,737 )   $ 122,422  

 

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

 

F- 4

 

 

SOCIAL LIFE NETWORK, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

 

 

    For the Three Months Ended March 31,  
    2021     2020  
Cash flow from operating activities:                
Net Income (loss) from continuing operations   $ (17,512 )   $ (220,022 )
Net income (loss) from discontinued operations     (27,700 )     (2,968 )
Loss on the extinguishment of debt     25,824          
Adjustments to reconcile net loss to net cash used in operating activities:                
Changes in operating assets and liabilities:                
Accounts receivable     (11,448 )     12,500  
Prepaid expenses     (45,000 )     13,631  
Accounts payable and accrued expenses     34,088       (102,977 )
Net cash used in operating activities     (41,748 )     (299,836 )
                 
Cash flows used in investing activities:                
Investment in MJ Link     (800 )     -  
Net cash used in investing activities     (800 )     -  
                 
Cash flows from financing activities:                
Proceeds from the sale of common stock – private placement     100,000       -  
Proceeds from the sale of common stock – convertible note     -       294,647  
Loans payable -related party     56,250       -  
Net cash provided by financing activities     156,250       294,647  
                 
Net increase/decrease in cash     114,502       (5,190 )
Cash at beginning of period     193       11,567  
Cash at end of period   $ 114,695     $ 6,367  
                 
Supplemental Disclosures:                
Cash paid during the year for:                
Interest   $ -     $ 28,501  
Income taxes   $ -     $ -  

 

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

 

F- 5

 

 

COMPARATIVE RESULTS FOR FISCAL YEARS

 

Consolidated Performance - Results of Operations for the 3-month periods ended March 31, 2021 and 2020

 

Revenues

 

For the 3-month period ending March 31, 2021, we recognized revenue from licensing of $62,500 compared to $62,500 dollars of revenue for the 3-month period ending March 31, 2020.

 

For the 3-month period ending March 31, 2021, we recognized zero digital subscription revenue as compared to zero for the 3-month period ending March 31, 2020, due to the discontinuation of selling digital subscriptions in 2021.

 

For the 3-month period ending March 31, 2021, we recognized zero event revenue as compared to zero for the 3-month period ending March 31, 2020, due to the discontinuation of putting on events in 2021.

 

For the 3-month period ending March 31, 2021, we recognized zero digital marketing revenue as compared to zero for the 3-month period ending March 31, 2020, due to the discontinuation of selling digital marketing in 2021.

 

Cost of Revenue

 

Cost of revenue was zero for the 3-month period ending March 31, 2021 compared to $1,282 the 3-month period ending March 31, 2020, representing decreased revenue of $1,282 or 100%. The decrease is due to the discontinuation of selling digital subscriptions, events and digital marketing in 2021.

 

Operating Expenses

 

Cash-paid compensation expense decreased by $19,859 or 48% to $43,934 for the 3-month period ending March 31, 2021 from $63,793 for the 3-month period ending March 31, 2021. The decrease is due to the discontinuation of selling digital subscriptions, events and digital marketing in 2021.

 

During the 3-month period ending March 31, 2021, we recognized zero of non-cash stock-based compensation expense for employees, consultants, and professionals compared to zero for the 3-month period ending March 31, 2020.

 

During the 3-month periods ending March 31, 2021 and 2020, we recognized zero of non-cash stock-based compensation expense for warrants for the respective quarters.

 

Sales and marketing expense decreased by $5,694 to $138 for the 3-month period ending March 31, 2021 from $5,632 for the 3-month period ending March 31, 2020. The decrease is due to the discontinuation of selling digital subscriptions, events and digital marketing in 2021.

 

General and administrative expense was $146,794 for the 3-month period ending March 31, 2021, approximately equivalent to $143,025 for the 3-month period ending March 31, 2020.

 

Other income

 

During the three months ended March 31, 2021, we generated $110,854 of other income from the gain from converting our debt and accrued interest outstanding into common stock.

 

Net Loss

 

Our net loss for the for the 3-month period ending March 31, 2021 was $17,512 compared to a net loss of $220,022 for the 3-month period ending March 31, 2020. The decrease in net loss of $202,510 is a result of lack of issuance of non-cash stock-based compensation expenses to our personnel, and reduction in revenue, offset with the gain received for the conversion of our convertible debt to zero.

 

Additionally as result of the spinoff of MJLink which became a discontinued operation, we incurred net losses from discontinued operations of $27,700 and $2,698, respectively, for the period ended March 31, 2021 and March 31, 2020, respectively.

 

Liquidity and Capital Resources

 

Cash Flows from Operating Activities

 

We have not generated positive cash flows from operating activities. For the 3-month period ending March 31, 2021, net cash inflows used in operating activities was $41,748 compared to net cash used of $299,836 for the 3-month period ending March 31, 2020. The $258,088 decrease in cash in operating activities is primarily attributable to the reduction of $202,510 in our operating losses during the three months ended March 31, 2021.

 

Cash Flows from Financing Activities

 

For the 3-month period ending March 31, 2021, net cash provided by financing activities was $156,250 compared to $294,647 for the 3-month period ended March 31, 2020.

 

F- 6

 

 

SOCIAL LIFE NETWORK, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

March 31, 2021

(unaudited)

 

NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS

 

Organization

 

Social Life Network, Inc. (referred to herein as “we” or “our” or “us”) is a Technology Business Incubator (TBI) that provides tech start-ups with seed technology development and executive leadership, making it easier for start-up founders to focus on raising capital, perfecting their business model, and growing their network usership. Our seed technology is an artificial intelligence (AI) powered social network and Ecommerce platform that leverages blockchain technology to increase speed, security, and accuracy on the niche social networks that we license to the companies in our TBI.

 

Corporate Changes

 

On August 30, 1985, we were incorporated as a private corporation, CJ Industries, Inc., in California. On February 24, 2004, we merged with Calvert Corporation, a Nevada Corporation, changed our name to Sew Cal Logo, Inc., and moved our domicile to Nevada, at which time our common stock became traded under the ticker symbol “SEWC”.

 

In June 2014, Sew Cal Logo, Inc. 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, we, 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. We acted through the court-appointed receiver and White Tiger Partners, LLC, our 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 our officers, composed of 59,736,667 shares each to our Chief Executive Officer, Kenneth Tapp, and Andrew Rodosevich, our then-Chief Financial Officer. Pursuant to the terms of the Agreement and related corporate actions in our domicile, Nevada:

 

  We cancelled all previously created preferred class of stock;
     
  We 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;
     
  Our then officers and directors were terminated, and Kenneth Tapp and Andrew Rodosevich became the Company’s Chief Executive Officer/Director and Chief Financial Officer/Director, respectively;
     
  We effected a 5,000 to 1 reverse stock split effective April 11, 2016, with each shareholder retaining a minimum of 100 shares;
     
  We changed our name from Sew Cal Logo, Inc. to WeedLife, Inc, and then to Social Life Network, Inc. effective in Nevada on April 11, 2016;
     
  We changed our stock symbol from SEWC to WDLF;
     
  We decreased our authorized common stock shares from 2,000,000,000 shares to 500,000,000 shares, effective in Nevada 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, ratifying the above actions. The receiver was discharged on June 7, 2016.

 

On September 20, 2018, we incorporated MjLink.com, Inc. (“MjLink”), a Delaware Corporation. On February 1, 2020, MjLink.com, Inc. filed its Form 1-A Offering Document for a Regulation A Tier 2 initial public offering, which the SEC qualified on September 28, 2020. . We ceased operating MjLink as a division and they continued operations as an independent company, in return for 15.17% of the MjLink.com, Inc. outstanding Class A common stock shares.

 

On March 4, 2020, our Board increased our number of authorized shares of Common Stock from 500,000,000 to 2,500,000,000 Common Stock Shares pursuant to an amendment to our Articles of Incorporation with the state of Nevada, and submitted to Nevada our Certificate of Designation of Preferences, Rights and Limitations of our Class B Common Stock, providing that each Class B Common Stock Share has one-hundred (100) votes on all matters presented to be voted by the holders of Common Stock. The Class B Common Stock Shares only have voting power and have no equity, cash value, or any other value.

 

Effective March 4, 2020, our Board of Directors (the “Board”) authorized the issuance of twenty-five million (25,000,000) Class B Common Stock Shares to Ken Tapp, our Chief Executive Officer, in return for his services as our 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.

 

Effective March 28, 2021, our Board the issuance of fifty million (50,000,000) Class B Common Stock Shares to Ken Tapp, our Chief Executive Officer, in return for his services as our Chief Executive Officer from March 1, 2020 to February 28, 2021, which shares are equal to five billion (5,000,000,000) votes and have no equity, cash value or any other value. As of the date of this filing, our Chief Executive Officer controls approximately in excess of 98% of shareholder votes via the Company’s issuance of 75,000,000 Class B Shares to Ken Tapp, thereby controlling over 7,500,000,000 votes.

 

F- 7

 

 

On May 8, 2020, we filed Amended and Restated Articles of Incorporation (“Amended Articles”) in Nevada to increase our authorized shares from 2,500,000,000 to 10,000,000,000 Shares and our Preferred Shares from 100,000,000 to 300,000,000 Shares. Additionally, the Amended Articles authorized us from May 8, 2020 and continuing until March 31, 2021, as determined by our Board 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 (the “Reverse Stock Split”).

 

On December 11th, 2020, we filed a Form 8-K stating that we would not be executing the Reverse Stock Split, which Reverse Stock Split expired on March 31st, 2021 pursuant to the May 8, 2020 Amended Articles described immediately above.

 

Our Business

 

We are a Technology Business Incubator (TBI) that, through individual licensing agreements, provides tech start-ups with seed technology development, legal and executive leadership, makes it easier for start-up founders to focus on raising capital, perfecting their business model, and growing their network usership. Our seed technology is an artificial intelligence (“AI”) powered social network and Ecommerce platform that leverages blockchain technology to increase speed, security and accuracy on the niche social networks that we license to the companies in our TBI.

 

From 2013 through the first half of 2021, we have added niche social networking tech start-ups to our TBI that target consumers and business professionals in the Cannabis and Hemp, Residential Real Estate industry, Space industry, Hunting, Fishing, Camping and RV’ing industry, Racket Sports, Soccer, Golf, Cycling, and Motor Sports industries.

 

Each of our TBI licensees’ goal is to grow their network usership to a size enabling sale to an acquiring niche industry company or taking the TBI licensee public or helping them sell their company through a merger or acquisition.

 

Using our state-of-art AI and Blockchain technologies, our licensees’ social networking platforms learn from the changing online social behavior of users to better connect the business professionals and consumers together. We also utilize AI in the development and updating of our code, in order to identify and debug our platform faster, and be more cost effective.

 

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

 

We maintain our cash in bank deposit accounts, the balances of which at times may exceed federally insured limits. We continually monitor our banking relationships and consequently have not experienced any losses in our accounts. We believe we are not exposed to any significant credit risk on cash.

 

F- 8

 

 

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 year ended March 31, 2020 or 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.

 

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 March 31, 2020.

 

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

 

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.

 

F- 9

 

 

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.

 

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 March 31,2020, 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

 

We account 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.

 

We account 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.

 

F- 10

 

 

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.

 

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 No. 2016-02, Leases (Topic 842), and has since issued amendments thereto, related to the accounting for leases (collectively referred to as “ASC 842”). ASC 842 establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The Company will adopt ASC 842 on January 1, 2021. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. Entities have the option to continue to apply historical accounting under Topic 840, including its disclosure requirements, in comparative periods presented in the year of adoption. An entity that elects this option will recognize a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption instead of the earliest period presented. The Company expects to elect to apply the optional ASC 842 transition provisions beginning on January 1, 2021. Accordingly, the Company will continue to apply Topic 840 prior to January 1, 2021, including Topic 840 disclosure requirements, in the comparative periods presented. The Company expects to elect the package of practical expedients for all its leases that commenced before January 1, 2021. The Company has evaluated its real estate lease, its copier leases and its generator rental agreements. The Company expects that the adoption of ASC 842 will materially impact its balance sheet and have an immaterial impact on its results of operations. Based on the Company’s current agreements, the Company expects that upon the adoption of ASC 842 on January 1, 2021, it will record an operating lease liability of approximately $33,000 and corresponding ROU assets based on the present value of the remaining minimum rental payments associated with the Company’s leases. As the Company’s leases do not provide an implicit rate, nor is one readily available, the Company will use its incremental borrowing rate based on information available at January 1, 2021 to determine the present value of its future minimum rental payments.

 

F- 11

 

 

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.

 

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 $31,446,737 at March 31, 2021, and a loss from continuing operations of $17,512. 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 three 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.

 

F- 12

 

 

NOTE 4 – RELATED PARTY TRANSACTIONS

 

Other than as disclosed below, there has been no transaction, since January 1, 2021, or currently proposed transaction, in which our company was or is to be a participant and the amount involved exceeds $5,000 or one percent of our total assets at March 31, 2021, 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 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.

 

We have Technology Business Incubator (TBI) license agreements with MjLink.com Inc., LikeRE.com Inc., HuntPost.com Inc., RacketStar.com Inc., FutPost.com Inc., GolfLynk.com Inc., CycleFans.com Inc., WEnRV.com Inc., RaceDY.com Inc., and SpaceZE.com Inc., which agreements provide that our TBI licensees pay us a license fee of 5% percentage of annual revenues generated, and 15% of their common stock, issuable immediately prior to a liquidity event such as an IPO or sale of 51% or more, of a licensee’s common stock. The 15% common stock payment is non-dilutive prior to a liquidity event described above. Our Chief Executive Office, Kenneth Tapp, owns less than 1% of our outstanding shares and is a board member of each of our TBI licensees. Ken Tapp owns less than 9.99% of the outstanding common stock in each of our licensees. Pricing for the license agreements was set by our board of directors. This type of licensing agreement is standard for technology incubators and tech start-up accelerators.

 

Our related party revenue year-to-date for Fiscal Year 2021 is $62,500 or 100.0% of our gross revenue.

 

We paid 1 (one) of our Advisors, Vincent (Tripp) Keber, $30,000 for his consulting services during the first quarter 2021.

 

From January 1, 2021 through March 31, 2021, Kenneth Tapp, from time-to-time, provided short-term interest free loans amounting to $145,000 for the Company’s operations. At March 31, 2021 we owed $169,925 to Kenneth Tapp.

 

As noted in Note 8, the Company completed a December 31, 2020 Division Spin-Off Agreement (“Spin-Off Agreement) between MjLink.com, Inc. (“MjLink”) and the Company whereby the Parties agreed to cease the Company operating MjLink as its cannabis division and going forward MjLink would conduct its own operations. The Company recorded a loss from discontinued operations of $27,700 during the three months ended March 31, 2021. With regards to the Spin-Off, MjLink issued the Company 800,000 of its Common Stock Shares or 15.17% of its outstanding shares for MjLink’s use of the Company’s license from January 1st 2020 to December 31, 2020. Ken Tapp is the Chief Executive Officer of both the Company and MjLink and thus the transaction was treated as a related party transaction. To reflect the true intention of the Parties to the Spin-Off Agreement, the Parties then agreed in an Amended Spin-Off Agreement to reflect an effective date of 12:01 am on January 1, 2021 regarding the Spin-Off transaction (“Effective Date”). Apart from the Effective Date there were no further changes to the Spin-Off Agreement.

 

NOTE 5 – SALES RETURNS

 

For the period ended March 31, 2021, the Company did not issue any credit memos.

 

NOTE 6 – STOCK WARRANTS

 

During the three months ended March 31, 2021 and the years ended December 31, 2020, 2019, we granted zero, zero and 1,594,853 warrants, respectively, to our 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 our warrants have 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, 2020 the 17,894,873 Warrants are 100% vested. During the twelve months ended December 31, 2019, we executed a cashless conversion of 8,800,020 vested warrants in exchange for 4,400,010 common stock shares. The remaining 9,064,853 outstanding warrants are currently 100% vested to date and not exercised. The aggregate fair value of the warrants as of December 31, 2020 total $2,238,800, 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 0.07% - 1.60%, volatility ranging from 391% to 562%, and expected life of the warrants ranging from 3 to 5 years.

 

F- 13

 

 

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, 2019     9,094,853     $ 0.07     $ -  
Issued     -       -       -  
Exercised     -       -       -  
Expired     -       -       -  
Outstanding, March 31, 2020     9,094,853     $ 0.07     $ -  
                         
Exercisable, March 31, 2020     9,094,853       0.07       -  
Issued     -       -       -  
Exercised     -       -       -  
Expired     -       -       -  
Outstanding, June 30, 2020     9,094,853       0.07     $ -  
                         
Exercisable, June 30, 2020     9,094,853       0.07       -  
Issued     -       -       -  
Exercised     -       -       -  
Expired     -       -       -  
Outstanding, September 30, 2020     9,094,853       0.07     $ -  
                         
Exercisable, September 30, 2020     9,094,853     $ 0.07     $ -  
Issued     -       -       -  
Exercised     30,000       -       -  
Expired     -       -       -  
Outstanding, December 31, 2020     9,064,853       0.07     $ -  
                         
Exercisable, December 31, 2020     9,064,853       0.07     $ -  
                         
Exercisable, March 31, 2021     9,064,853     $ 0.07     $ -  
Issued     -       -       -  
Exercised     101,003       -       -  
Expired     -       -       -  
Outstanding, December 31, 2020     8,963,850       0.07     $ 0.31

 

Range of Exercise Prices     Number Outstanding 3/31/2021     Weighted Average Remaining Contractual Life     Weighted Average Exercise Price  
$ 0.00 – 0.20       8,963,850       1.84 years     $ 0.07  

 

In the $5,000,000 Complaint, the Company filed against a Convertible Lender as referenced below under Part II, Item 1, the Company alleges, among other things, that the warrants exercised by the Lender were unconscionable since it provided the defendants with $1,000,000 worth of our common stock and violated the doctrine of unconscionability under Nevada and Florida law, and on that basis, requested that the Court declare the transaction documents void and unenforceable.

 

F- 14

 

 

In the $40,000,000 Complaint, The Company filed against a Convertible Lender as referenced below under Part II, Item 1, the Company alleges, among other things, that the Warrant Agreement (the “Warrant”) was substantively unconscionable under California law because it provided the Defendants with hundreds of millions of shares, despite the face of the Warrant providing that the Lender is entitled to only 412,000 Warrant Shares under the Warrant, and on that basis, requested that the Court declare that the Securities Contracts (the transaction documents) are unconscionable and void and unenforceable, including the Warrant Agreement.

 

NOTE 7 – COMMON STOCK AND CONVERTIBLE DEBT

 

Common Stock

 

Class A

 

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 $0.00140 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) 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 $0.00060, for a value of $44,693.

 

For the quarter ending September 30, 2020, several lenders converted their debt into 2,125,389,202 common shares at an average of $0.00005, for a value of $111,977.

 

For the quarter ending December 31, 2020, several lenders converted their debt into 2,619,030,182 common shares at an average of $0.00082, for a value of $133,902.

 

For the quarter ending March 31, 2021, the remaining lenders converted their debt into 792,278,846 common shares at an average of $.00523, for a value of $270,174.

 

F- 15

 

 

Class B

 

Effective March 4, 2020, our board of directors authorized the issuance of twenty five million (25,000,000) Class B Common Stock Shares to Ken Tapp, our Chief Executive Officer, in return for his services as our 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.

 

Effective March 28, 2021, our Board authorized the issuance of fifty million (50,000,000) Class B Common Stock Shares to Ken Tapp, our Chief Executive Officer, in return for his services as our Chief Executive Officer from March 1, 2020 to February 28, 2021, which shares are equal to five billion (5,000,000,000) votes and have no equity, cash value or any other value. As of the date of this filing, our Chief Executive Officer controls approximately in excess of 98% of shareholder votes via our issuance of 75,000,000 Class B Shares to Ken Tapp, thereby controlling over 7,500,000,000 votes.

 

Convertible Debt and Other Obligations

 

Convertible Debt

 

We have the following convertible notes payable as of March 31, 2021:*

 

Note   Funding Date   Maturity Date   Interest Rate     Original Borrowing     Average Conversion Price     Number of Shares Converted     Balance at
March 31, 2021
 
Note payable (A)   April 15, 2019   November 14, 2019     7 %   $ 100,000     $ 0.0000       810,911,013     $ -  
Note payable (B)   April 15, 2019   April 14, 2022     10 %   $ 67,500     $ 0.0000       117,869,569       -  
Note payable (C-1)   May 24, 2019   December 23, 2019     10 %   $ 80,000     $ 0.00004       2,098,755,638       -  
Note payable (C-2)   July 3, 2019   February 2, 2020     10 %   $ 160,000     $ 0.0003       1,146,297,040       -  
Note payable (D)   June 12, 2019   June 11, 2020     12 %   $ 110,000     $ 0.0019       691,151,660       -  
Note payable (E)   June 26, 2019   March 25, 2020     12 %   $ 135,000     $ 0.00004       514,781,219       -  
Note payable (F)   August 7, 2019   August 6, 2020     10 %   $ 100,000     $ 0.0007       158,429,766       -  
Note payable (G)   August 21, 2019   August 20, 2020     10 %   $ 148,500     $ 0.0001       431,824,675       -  
Note payable (H)   January 28, 2020   January 27, 2021     10 %     63,000     $ 0.0001       1,102,499,999       -  
Total                           $ 0.0001             $ -  

 

*As indicated below in footnotes A-H, we had various convertible notes with funding dates in 2019 and 2020, which notes were paid in full and completely retired by February 5, 2021, specifically, as follows:

 

A- November 14, 2019

B - June 26, 2019

C - January 25, 2021

D – February 5, 2021

E – January 7, 2021

F – July 28, 2021

G – January 4, 2021

H – August 24, 2020

 

  (A) On April 15, 2019, we 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. The note 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, we issued 150,000 common stock shares and additional 102,176 common stock shares on October 15, 2019, per our original agreement, 412,500 common stock warrants, and reserved 301,412,500 restricted common shares for potential conversion if the note was note paid in full. 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, we 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. This note was paid in full on November 14, 2019.

 

F- 16

 

 

  (B) On April 15, 2019, we completed 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 potential conversion if the note was note paid in full. 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. We 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. This note was paid in full on June 26, 2019.
     
  (C) On May 24, 2019, we 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 received only two of the three tranches of $80,000, generating $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, we issued 50,000 common stock shares for two tranches with another 25,000 common stock shares to be issued with the third tranche, and we have reserved 8,000,000 which was subsequently increased to 3 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. We determined that because the conversion price is variable and unknown, it could not determine if it had enough reserve shares to fulfill the conversion obligation. As such, pursuant to current accounting guidelines, we 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. This note was paid in full on January 25, 2021.
     
  (D) On June 12, 2019, we 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, we have reserved 14,400,000 restricted common 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. We determined that because the conversion price is variable and unknown, it could not determine if we had enough authorized shares to fulfill the conversion obligation. On December 19, 2019, we converted $10,000 of principle into 495,472,078 shares of common stock at approximately $0.035 per share. As such, pursuant to current accounting guidelines, we 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. This note was paid in full on February 5, 2021.
     
  (E) On June 26, 2019, we 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, we issued 100,000 common stock shares and has reserved 15,000,000, which was subsequently increased to 1 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. We determined that because the conversion price is variable and unknown, it could not determine if we had enough authorized shares to fulfill the conversion obligation. As such, pursuant to current accounting guidelines, we 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. This note was paid in full on January 7, 2021.
     
  (F) On August 7, 2019, we 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, we issued 100,000 common stock shares and has reserved 677,973,124, which was subsequently increased to 105,769,231, 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. We determined that because the conversion price is variable and unknown, it could not determine if we had enough authorized shares to fulfill the conversion obligation. As such, pursuant to current accounting guidelines, we 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. This note was paid in full on July 28, 2020.

 

F- 17

 

 

  (G) On August 21, 2019, we completed a 12-month convertible promissory note and other related documents with an unaffiliated third-party funding group to generate $148,500, which would be distributed in three equal monthly tranches of $49,500. Only one tranche of $49,500 was received, and created 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. We 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, we 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; we have reserved 80,000,000 which was subsequently increased to 2 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. We 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, we 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. This note was paid in full on January 4, 2021.
     
  (H) On January 28, 2020, we 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. We received only one tranche and 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. We reserved 41,331,475, which was subsequently increased to 1billion 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. We 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, we 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. This note was paid in full on August 24, 2020.

 

  On June 26, 2019, we fully met and timely paid its debt obligation to Note Payable (B).
  On November 14, 2019, we fully met and timely paid its debt obligation to Note Payable (A).
  On July 28, 2020, we fully met and timely paid its debt obligation to Note Payable (F).
  On August 24, 2020, we fully met and timely paid its debt obligation to Note Payable (H).
  On November 3, 2020, we fully met and timely paid its debt obligation to Note Payable (C-1).
  On January 4, 2021, we fully met and timely paid its debt obligation to Note Payable (G).
  On January 7, 2021, we fully met and timely paid its debt obligation to Note Payable (E).
  On January 25, 2021, we fully met and timely paid its debt obligation to Note Payable (C-2).
  On February 5, 2021, we fully met and timely paid its debt obligation to Note Payable (D).

 

Accordingly, all of our convertible plus interest obligation was fully settled in the first quarter 2021.

 

Other Obligations

 

For the quarter ending March 31, 2021, Kenneth Tapp, from time-to-time provided short-term interest free loans for the Company’s operations. For the first quarter ending of 2021, Kenneth Tapp provided an additional net amount of $84,197 in short term interest free loans for legal expenses, totaling $169,925 liquidity for year-to-date March 31st, 2021.

 

F- 18

 

 

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.

 

On March 12, 2021, MjLink.com relieved all its $364,688 debt obligation to Social Life Network.

 

The Company’s executive and administrative office is located at 3465 Gaylord Court, Suite A509, Englewood, Colorado 80113. The Company had total rent expense for the quarter ended March 31, 2021 and 2020 of $8,590 and $5,699, respectively, which is recorded as part of General and Administrative expenses in the Statement of Operations.

 

NOTE 8 -DISCONTINUED OPERATIONS

 

The Company completed a December 31, 2020 Division Spin-Off Agreement (“Spin-Off Agreement) between MjLink.com, Inc. (“MjLink”) and the Company whereby the Parties agreed to cease the Company operating MjLink as its cannabis division and going forward MjLink would conduct its own operations. The Spin-Off has a subsequent financial effect that could potentially increase the profit margins for the Company by removing the ongoing operating expenses of MjLink as a division. The Company recorded a loss from discontinued operations of $27,700 during the three months ended March 31, 2021. MjLink is expected to be worth more as an independent entity than as a division of the Company. MjLink issued the Company 800,000 of its Common Stock Shares or 15.17% of its outstanding shares for MjLink’s use of the Company’s license from January 1st 2020 to December 31, 2020. Ken Tapp is the Chief Executive Officer of both the Company and MjLink and thus the transaction was treated as a related party transaction. To reflect the true intention of the Parties to the Spin-Off Agreement, the Parties then agreed in an Amended Spin-Off Agreement to reflect an effective date of 12:01 am on January 1, 2021 regarding the Spin-Off transaction (“Effective Date”). Apart from the Effective Date there were no further changes to the Spin-Off Agreement.

 

    Three Months ended  
    March 31, 2021     March 31, 2020  
             
Operating loss   $ (27,700 )   $ (2,968 )
                 
Income(loss) before provision for income taxes     (27,700 )   $ (2,968 )
Provision for income taxes     -       -_  
Net income (loss)   $ (27,700 )   $ (2,968 )

 

NOTE 9 – SUBSEQUENT EVENTS

 

Common Stock

 

As of May 17, 2021, the Company has not issued common stock shares to an employee nor has sold common shares to an accredited investor.

 

On April 7th, 2021, LVC Consulting returned 29,736,667 common shares into the Company’s treasury, leaving LVC Consulting with 30 million common shares.

 

On April 9, 2021, we (OTC: WDLF) filed a $5,000,000 complaint in The United States District Court for the Southern District of Florida against a convertible debt funder, including allegations of operating as an unregistered dealer and securities fraud.

 

On April 19, 2021, we filed a $40,000,000 complaint in The United States District Court for the Southern District of California against a convertible debt funder, including allegations of operating as an unregistered dealer and securities fraud.

 

Convertible Debt

 

As of May 17, 2021, the Company has not entered into any convertible debt arrangements.

 

Other Obligations

 

For the quarter ending March 31, 2021, Kenneth Tapp, from time-to-time provided short-term interest free loans for the Company’s operations. For the first quarter ending of 2021, Kenneth Tapp provided an additional net amount of $84,197 in short term interest free loans, totaling $169,925 liquidity for year-to-date 2021.

 

Board of Director, Chief Financial Officer, and Board Appointments

 

None.

 

F- 19

 

 

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.

 

Our financial statements t dated March 31, 2021 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 $31,446,737 at March 31, 2021, had a net loss of $45,212 and used 41,748 in cash from operating activities for the three months ended March 31, 2021. 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.

 

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.

 

1
 

 

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 3 months ended 2021 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.

 

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

 

We estimate that it will cost approximately $100,000 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.

 

2
 

 

We have generated a majority of our revenue in 2021 and 2020 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 0.80% of our outstanding voting stock, including our Chief Executive Officer who owns 0.94% 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.

 

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.

 

3
 

 

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 will 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 will 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.

 

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.

 

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.

 

4
 

 

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.

 

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.

 

5
 

 

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 virtual -events 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.

 

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.

 

6
 

 

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.

 

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 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.

 

7
 

 

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.

 

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.

 

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.

 

8
 

 

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 March 31, (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.

 

COVID-19 RELATED RISKS

 

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.

 

The outbreak of the COVID-19 may adversely affect our customers or subscribers and have an adverse effect on our results of operations.

 

Further, the risks described above could also adversely affect our potential licensee’s financial condition, resulting in reduced spending by our licensee to pay us our license fees. Risks related to an epidemic, pandemic, or other health crisis, such as COVID-19, could negatively impact the results of operations of one or more of our l licensees or potential licensee operations. The ultimate extent of the impact of any epidemic, pandemic or other health crisis on our licensees and 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.

 

Certain historical data regarding our business, results of operations, financial condition and liquidity does not reflect the impact of the COVID-19 pandemic and related containment measures and therefore does not purport to be representative of our future performance

 

The information included in this Annual report on Form 10-K and our other reports filed with the SEC includes information regarding our business, results of operations, financial condition and liquidity as of dates and for periods before and during the impact of the COVID-19 pandemic and related containment measures (including quarantines and governmental orders requiring the closure of certain businesses, limiting travel, requiring that individuals stay at home or shelter in place and closing borders). Therefore, certain historical information therefore does not reflect the adverse impacts of the COVID-19 pandemic and the related containment measures. Accordingly, investors are cautioned not to unduly rely on such historical information regarding our business, results of operations, financial condition or liquidity, as that data does not reflect the adverse impact of the COVID-19 pandemic and therefore does not purport to be representative of the future results of operations, financial condition, liquidity or other financial or operating results of us, or our business.

 

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During 2021 and 2020, we experienced material decreases in our revenues due to Covid-19

 

During 2021 and 2020, we experienced material decreases in our revenues and results of operations due to Covid-19 when comparing our 2019 results to our 2020 and 2021 financial results. Should this downward Covid-19 related trend continue, our revenues and results of operations will continue to be materially and negatively impacted.

 

THE OUTBREAK OF COVID-19 HAS RESULTED IN A WIDESPREAD HEALTH CRISIS THAT COULD ADVERSELY AFFECT THE ECONOMIES AND FINANCIAL MARKETS WORLDWIDE AND COULD EXPONENTIALLY INCREASE THE RISK FACTORS DESCRIBED ABOVE AND BELOW.

 

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.

 

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.

 

10
 

 

We have authorized 300,000,000 Preferred Shares and 400,000,000 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 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.

 

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 OTC Markets 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

 

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  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.

 

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.

 

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ITEM 2. PROPERTIES

 

Our executive and administrative office is located at 3465 Gaylord Court, Suite A509, Englewood, Colorado 80113. We had total rent expense for the quarter ended March 31, 2021 and 2020 of $8,590 and $5,699, respectively, which is recorded as part of General and Administrative expenses in the Statement of Operations.

 

ITEM 3. LEGAL PROCEEDINGS

 

From time to time, we may become involved in various lawsuits and legal proceedings, which arise, in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition or operating results. We are not a party to any legal proceedings.

 

On April 9, 2021, we (OTC: WDLF) filed a $5,000,000 complaint in The United States District Court for the Southern District of Florida against a convertible debt funder, including allegations of operating as an unregistered dealer and securities fraud.

 

On April 19, 2021, we filed a $40,000,000 complaint in The United States District Court for the Southern District of California against a convertible debt funder,. including allegations of operating as an unregistered dealer and securities fraud.

 

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 our company or any of our subsidiaries or has a material interest adverse to our company or any of our subsidiaries.

 

13
 

 

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.

 

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 Englewood, 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.

 

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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 and debt financing to fund operations to-date. 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 trends and uncertainties associated with expansion of niche industry social networks and ecommerce solutions are increasing in popularity and availability. At some point, industry saturation of technology solutions that we provide to, and support for TBI participant tech startup companies will make it more difficult for our business model to expand. This will force our company to innovate new technology solutions, which will undoubtedly cost more money to fund.

 

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 $31,811,777 at March 31, 2021, had a net loss of $45,564 and lost $205,123 in operating activities for the three months ended March 31, 2021. 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. While we believe that we will be successful generating revenue to fund our operations, meet regulatory requirements and achieve commercial goals, there are no assurances that we will succeed in our future operations.

 

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

 

  By increasing our TBI licensing to additional tech company startups;

 

The foregoing goals will increase expenses and lead to possible net losses. There is no assurance that we will ever be profitable. 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.

 

Off-Balance Sheet Arrangements

 

None.

 

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk.

 

Not applicable

 

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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.

 

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.

 

On April 9, 2021, we (OTC: WDLF) filed a $5,000,000 complaint in the United States District Court for the Southern District of Florida against a convertible debt funder, the complaint of which may be accessed at:

 

https://www.sec.gov/Archives/edgar/data/1281984/000149315221008449/ex99-1.htm

 

On April 19, 2021, we filed a $40,000,000 complaint in the United States District Court for the Southern District of California against a convertible debt funder, the complaint of which may be accessed at:

 

https:www.socialnetwork.ai/LGH-filing.pdf

 

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.

 

For the 12-month period ending December 31, 2019, a lender converted their debt into 284,373 common shares at an average of $0.03517 for a value of $10,000.

 

For the 12-month period ending December 31, 2020, several lenders converted their debt into 6,102,436,839 common shares at an average of $0.00009 for a value of $548,646.

 

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For the 3-month period ending March 31, 2021, the remaining lenders converted their debt into 709,449,528 common shares at an average of $0.00038 for a value of $271,174.

 

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.

 

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

 

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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.

 

Date: May 26, 2021

 

  SOCIAL LIFE NETWORK, INC.
     
  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)

 

18

 

Social Life Network (PK) (USOTC:WDLF)
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