NOTES
TO CONDENSED FINANCIAL STATEMENTS
June
30, 2022
(unaudited)
NOTE
1 – ORGANIZATION AND DESCRIPTION OF BUSINESS
Social
Life Network or Decentral Life is referred to in the following financial notes as the “Company.”
Organization
The
Company 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.
The Company’s 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 it licenses to the companies in its TBI.
On
or about August 16th, 2021, the Company formed a new division, Decentral Life, to focus entirely on developing a global decentralized
social network and cryptocurrency project.
The
decentralized social networking platform aims to replace the Company’s existing cloud-based SaaS that is licensed to the Company’s
TBI Licensees. Decentral Life launched the first of many smart contracts on the Ethereum blockchain that work toward achieving the Company’s
goal to build a decentralized global social networking platform. A smart contract is a computer program or a transaction protocol which
is intended to automatically execute, control or document legally relevant events and actions according to the terms of a contract..
Our first smart contract was launched on the Ethereum blockchain, thereby defining the Company’s WDLF utility token.
On
or about December 1st, 2021, the Company began changing its company name from Social Life Network to Decentral Life and started
doing business as Decentral Life while the name change was processed by the state of Nevada. On or about March 1, 2022, the state of
Nevada completed the name change filing, from Social Life Network, Inc. to Decentral Life, Inc. The Company filed a Definitive Information
Statement on June 25, 2022 ratifying the name change, which was approved by the Company’s Board of Directors and by a
majority shareholder consent vote.
Corporate
Changes
On
August 30, 1985, the Company was incorporated as a private corporation, CJ Industries, Inc., in California. On February 24, 2004, the
Company merged with Calvert Corporation, a Nevada Corporation, changed its 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, the Company, as the Seller, completed a business combination/merger agreement (the “Agreement”)
with the buyer, Life Marketing, Inc., a Colorado corporation (the “Buyer”), its subsidiaries and holdings, and all of the
Buyer’s securities holders. The Company acted through the court-appointed receiver and White Tiger Partners, LLC, its judgment
creditor. The Agreement provided that the then current owners of the private company, Life Marketing, Inc., become the majority shareholders,
pursuant to which an aggregate of 119,473,334 common stock shares were issued to the Company’s officers.
NOTE
1 – ORGANIZATION AND DESCRIPTION OF BUSINESS (continued)
Corporate
Changes (continued)
On
September 20, 2018, the Company incorporated MjLink.com, Inc. (“MjLink”), a Delaware Corporation. On February 1, 2020, MjLink. filed its Form 1-A Offering Document for a Regulation A Tier 2 initial public offering, which the SEC qualified on September 28,
2020. On January 1, 2021, the Company ceased operating MjLink as a division; MjLink continued operations as an independent company, in
return for MjLink issuing the Company 15.17% of MjLink’s. outstanding Class A common stock shares.
On
March 4, 2020, the Company’s Board of Directors (the “Board”) increased its number of authorized shares of Common Stock
from 500,000,000 to 2,500,000,000 Common Stock Shares pursuant to an amendment to its Articles of Incorporation with the state of Nevada,
and additionally submitted to Nevada the Company’s Certificate of Designation of Preferences, Rights and Limitations of its 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 Common
Stock Holders. The Class B Common Stock Shares only have voting power and have no equity, cash value, or any other value.
Effective
March 4, 2020, the Board authorized the issuance of 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.
On
May 8, 2020, the Company filed Amended and Restated Articles of Incorporation (“Amended Articles”) in Nevada to increase
its 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 the Company from May 8, 2020 and continuing until June 30, 2021, as determined by its 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, the Company filed a Form 8-K stating that the Company 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.
Effective
March 28, 2021, the Company’s Board the issuance of 50,000,000 Class B Common Stock Shares to Ken Tapp, its Chief Executive Officer,
in return for his services as the Company’s Chief Executive Officer from March 1, 2020 to February 28, 2021, which shares are equal
to 5,000,000,000 votes and have no equity, cash value or any other value. As of the date of this filing, the Company’s 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, which equals over 7,500,000,000 votes.
The
Company’s Business
The
Company is 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. The Company’s 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 the Company licenses to the companies in its TBI. Decentral Life is a division of Social Life Network, that is working
on a Decentralized Social Networking project, and has launched a WDLF Token on the Ethereum blockchain.
NOTE
1 – ORGANIZATION AND DESCRIPTION OF BUSINESS (continued)
The
Company’s Business (continued)
From
2013 through the first half of 2021, the Company added niche social networking tech start-ups to its 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 the Company’s 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
the Company’s state-of-art AI and Blockchain technologies that are cloud-based, its licensees’ social networking platforms
learn from the changing online social behavior of users to better connect the business professionals and consumers together. The Company
also utilizes AI in the development and updating of its code, in order to identify and debug its platform faster, and be more cost effective.
On
or about August 16th, 2021, the Company formed a new division to focus entirely on developing a global decentralized social network and
cryptocurrency project, named Decentral Life.
The
decentralized social networking platform aims to replace the Company’s existing cloud-based SaaS that is licensed to its TBI Licensees.
Decentral Life launched the first of many smart contracts on the Ethereum blockchain that work toward achieving the Company’s goal
to build a decentralized global social networking platform. A smart contract is a computer program or a transaction protocol which is
intended to automatically execute, control or document legally relevant events and actions according to the terms of a contract or an
agreement. The Company’s first smart contract was launched on the Ethereum blockchain, defining its WDLF utility token.
On
or about December 1t, 2021, the Company began the process of changing its company name from Social Life Network to Decentral
Life and started doing business as Decentral Life while the name change was processed by the state of Nevada. On or about March 1st,
2022 the state of Nevada completed the name change filing, from Social Life Network, Inc. to Decentral Life, Inc. The Company filed a
Definitive Information Statement on June 25, 2022 ratifying the name change.
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.
Management’s
Representation of Interim Financial Statements
The
accompanying unaudited financial statements have been prepared by the Company without audit pursuant to the rules and regulations of
the Securities and Exchange Commission (“SEC”). The Company uses the same accounting policies in preparing quarterly and
annual financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance
with accounting principles generally accepted in the United States (“GAAP”) have been or omitted as allowed by such rules
and regulations, and management believes that the disclosures are adequate to make the information presented not misleading. These financial
statements include all of the adjustments, which in the opinion of management are necessary to a fair presentation of financial position
and results of operations. All such adjustments are of a normal and recurring nature. Interim results are not necessarily indicative
of results for a full year.
NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Concentrations
of Credit Risk
The
Company maintains its cash in bank deposit accounts, the balances of which at times may exceed federally insured limits. The Company
continually monitors its banking relationships and consequently have not experienced any losses in its accounts. The Company is not exposed
to any significant credit risk on cash.
Cash
and cash equivalents
The
Company considers all highly liquid temporary cash investments with an original maturity of three months or less to be cash equivalents.
On June 30, 2022 and December 31, 2021, the Company’s cash equivalents totaled $-0- and $776 respectively.
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 our financial assets and liabilities, such as cash, prepaid expenses and accrued expenses approximate their fair value
because of the short maturity of those instruments. Our notes payable approximates the fair value of such instruments based upon management’s
best estimate of interest rates that would be available to us for similar financial arrangements.
The
Company does not have any assets or liabilities measured at fair value on a recurring or a non-recurring basis as of June 30, 2022 and
December 31, 2021.
NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
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.
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, we adjusted its deferred tax assets and liabilities at March 31, 2020, using the
new corporate tax rate of 21 percent.
The
Company adopted section 740-10-25 of the FASB Accounting Standards Codification (“Section 740-10-25”) with regards to uncertainty
income taxes. Section 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return
should be recorded in the financial statements. Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain
tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based
on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured
based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Section
740-10-25 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods
and requires increased disclosures. The Company had no material adjustments to its liabilities for unrecognized income tax benefits according
to the provisions of Section 740-10-25.
Stock-based
Compensation
The
Company accounts for equity-based transactions with nonemployees under the provisions of ASC Topic No. 505-50, Equity-Based Payments
to Non-Employees (“ASC 505-50”). ASC 505-50 establishes that equity-based payment transactions with nonemployees shall
be measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably
measurable. The fair value of common stock issued for payments to nonemployees is measured at the market price on the date of grant.
The fair value of equity instruments, other than common stock, is estimated using the Black-Scholes option valuation model. In general,
the Company recognizes the fair value of the equity instruments issued as deferred stock compensation and amortize the cost over the
term of the contract.
The
Company accounts for employee stock-based compensation in accordance with the guidance of FASB ASC Topic 718, Compensation—Stock
Compensation, which requires all share-based payments to employees, including grants of employee stock options, to be recognized
in the financial statements based on their fair values. The fair value of the equity instrument is charged directly to compensation expense
and credited to additional paid-in capital over the period during which services are rendered.
NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
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.
Recently
issued accounting pronouncements
The
Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not
believe that there are any other new 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 financial statements have been prepared on a going concern basis, which assumes that it will be able to realize its assets
and discharge its liabilities and commitments in the normal course of business for the foreseeable future. As of June 30, 2022 the Company
had $-0- of cash on hand an accumulated deficit of $33,511,966 and used cash of $5,931. 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 year with the public issuance of common stock and related party loans. 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 it will succeed in its future operations. The Company’s
financial statements do not include any adjustments that may result from the outcome of these uncertainties.
NOTE
4 – RELATED PARTY TRANSACTIONS
Other
than as disclosed below, there has been no transaction, since January 1, 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 June 30, 2022, 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. |
NOTE
4 – RELATED PARTY TRANSACTIONS (continued)
The
Company has Technology Business Incubator (TBI) license agreements with MjLink.com Inc., LikeRE.com Inc., HuntPost.com Inc., NetQub,
Inc., RacketStar.com Inc., FutPost.com Inc., GolfLynk.com Inc., CycleFans.com Inc., WEnRV.com Inc., RaceScene.com Inc., and SpaceZE.com
Inc., which agreements provide that our TBI licensees pay the Company 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. The Company’s Chief Executive
Office, Kenneth Tapp, owns less than 1% of our outstanding shares and is a board member of each of the Company’s TBI licensees.
Ken Tapp owns less than 9.99% of the outstanding common stock in each of the Company’s licensees. Pricing for the license agreements
was established by the Company’s Board. This type of licensing agreement is standard for technology incubators and tech start-up
accelerators.
The
Company’s related party revenue year-to-date for Fiscal Year 2021 was $237,389 or 100.0% of its gross revenue. The Company did
not record any revenue during the six months ended June 30, 2022.
The
Company paid 1 of its Advisors, Vincent (Tripp) Keber, $30,000 for his consulting services during the first quarter of 2021.
From
January 1, 2021 through December 31, 2021, Kenneth Tapp, from time-to-time, provided short-term interest free loans totaling $213,450
for the Company’s operations. From January 1 to June 30, 2022, provided short-term interest free loans totaling $5,155 for the
Company’s operations. At June 30, 2022, the Company owed $332,280 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 s whereby the Parties agreed that the Company would cease our operating MjLink as our cannabis
division. and going forward MjLink would conduct its own operations (the “Spin-Off”). The Company recorded a loss from discontinued
operations of $-0- and $27,700, respectively during the six months ended June 30, 2022 and June 30, 2021. In connection with the Spin-Off,
MjLink issued the Company 800,000 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 Company’s and MjLink’s Chief Executive Officer and the transaction was treated
as a related party transaction. Thereafter, 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 of 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 June 30, 2022, the Company did not issue any credit memos.
NOTE
6 – STOCK WARRANTS
During
the six months years ended June 31, 2022 and the year ended December 31, 2021 the Company did not grant any warrants. Currently, the
Company has the remaining 5,283,250 vested warrants outstanding.
A
summary of the status of the outstanding stock warrants is presented below:
SCHEDULE OF RANGE EXERCISE PRICES
| Range of Exercise Prices | |
Number Outstanding 6/30/2022 | | |
Weighted Average Remaining Contractual Life | |
Weighted Average Exercise Price | |
| $ 0.05 – 0.17 | |
| 5,283,250 | | |
.92 years | |
$ | 0.07 | |
NOTE
7 – COMMON STOCK AND CONVERTIBLE DEBT
Common
Stock
Class
A
For
the year ended December 31, 2021 the Company issued or cancelled the following shares:
| |
● |
Lenders
converted their debt into 709,449,234 common shares at an average of $0.002869701, for a value of $2,035,907. |
| |
|
|
| |
● |
Canceled
29,736,667 shares issued in prior years at par value, for a total value of $29,737. |
| |
|
|
| |
● |
Issued
630,604,389 shares upon the exercise of warrants |
| |
|
|
| |
● |
Issued
2,000,000 shares and raised $100,000 pursuant to a private placement |
As
of June 30, 2022 and December 31, 2021 there were 7,675,367,567 shares issued and outstanding.
Class
B
Effective
March 4, 2020, the Company’s board of directors authorized the issuance of 25,000,000 Class B Common Stock Shares to Ken Tapp,
the Company’s Chief Executive Officer, in return for his services as its 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, the Company’s Board authorized the issuance of 50,000,000 Class B Common Stock Shares to Ken Tapp, its Chief Executive
Officer, in return for his services as the Company’s Chief Executive Officer from March 1, 2020 to February 28, 2021, which shares
are equal to 5,000,000,000 votes and have no equity, cash value or any other value. As of the date of this filing, the Company’s
our Chief Executive Officer controls approximately in excess of 98% of shareholder votes via its issuance of 75,000,000 Class B Shares
to Ken Tapp, thereby controlling over 7,500,000,000 votes.
As
of June 30, 2022 and December 31, 2021, there are 75,000,000 shares of Class B shares outstanding.
Preferred
Stock
As
of June 30, 2022 and December 31, 2021, the Company had 300,000,000 shares of preferred stock authorized with no preferred shares outstanding.
Based
on a unanimous vote of the Company’s r directors, the Company designated 100,000,000 shares of Cumulative Convertible Preferred
A shares. On July 6, 2021, the Certificate of Rights and Preferences for those shares was approved. Each Preferred A Share has the right
to convert each Series A Preferred Share into 20 Common Stock Shares if and only if, the Company become listed on the New York Stock
Exchange (NYSE) or NASDAQ, and shall have liquidation rights over other series of Preferred Stock. As of March 31, 2022, no Preferred
A shares have been issued.
NOTE 7 –
COMMON STOCK AND CONVERTIBLE DEBT (continued)
Convertible
Debt and Other Obligations
Convertible
Debt
As
of June 30, 2022 and December 31, 2021 the Company had $-0 in convertible debt, outstanding. There were no conversions during the six
months ended June 30, 2022. A summary of the convertible notes issued and converted to common stock during 2021 is listed below:
| |
(A) |
On
May 24, 2019, the Company completed a 7-month fixed convertible promissory note and other related documents with an unaffiliated
third-party funding group to generate $240,000, which will be distributed in three equal monthly tranches of $80,000, in additional
available cash resources with a payback provision of $80,000 plus the original issue discount of $4,000 or $84,000 due seven months
from each funding date for each tranche, totaling $252,000. The Company 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, the Company issued 50,000
common stock shares for two tranches with another 25,000 common stock shares to be issued with the third tranche, and it 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. The Company 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, the Company determined that the beneficial conversion feature of the note created a fair value discount of $130,633 at
the date of issuance when the stock price was at $0.12 per share. This note was paid in full on January 25, 2021. |
| |
|
|
| |
(B) |
On
June 12, 2019, the Company completed a 12-month convertible promissory note and other related documents with an unaffiliated third-party
funding group to generate $110,000 in additional available cash resources with a payback provision due on June 11, 2020 of $135,250
which includes the original issue discount of $11,000 plus interest of $14,250. In connection with the note, 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. The Company 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, the Company 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, the Company determined that the beneficial conversion feature of the note
created a fair value discount of $59,231 at the date of issuance when the stock price was at $0.11 per share. This note was paid
in full on February 5, 2021. |
| |
|
|
| |
(C) |
On
June 26, 2019, the Company completed a 9-month senior convertible promissory note and other related documents with an unaffiliated
third-party funding group to generate $135,000 in additional available cash resources with a payback provision due on March 25, 2020
of $168,000 which includes the original issue discount of $15,000 plus interest of $18,000. In connection with the note, the Company
issued 100,000 common stock shares and has reserved 15,000,000, which was subsequently increased to 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. The Company determined that because
the conversion price is variable and unknown, it could not determine if the Company had enough authorized shares to fulfill the conversion
obligation. As such, pursuant to current accounting guidelines, the Company determined that the beneficial conversion feature of
the note created a fair value discount of $72,692 at the date of issuance when the stock price was at $0.11 per share. This note
was paid in full on January 7, 2021. |
| |
|
|
| |
(D) |
On
August 21, 2019, the Company completed a 12-month convertible promissory note and other related documents with an unaffiliated third-party
funding group to generate $148,500, which 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. The Company generated $49,500 in additional
available cash resources with a payback provision due on August 20, 2020 totaling $60,500 which includes the original issue discount
of $5,500 plus interest of $5,500. In connection therewith, the Company issued 50,000 common stock shares for the first tranche with
another 50,000 common stock shares to be issued with each additional tranche, which will total 150,000 common shares; the Company
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. The Company determined that because the conversion price is variable and unknown, it could not determine if
it had enough authorized shares to fulfill the conversion obligation. As such, pursuant to current accounting guidelines, the Company
determined that the beneficial conversion feature of the note created a fair value discount of $26,654 at the date of issuance when
the stock price was approximately $0.07 per share. This note was paid in full on January 4, 2021. |
Other
Obligations
For
the six months ended June 30, 2022, Kenneth Tapp, from time-to-time provided short-term interest free loans of $5,155 to help fund the
Company’s operations.
On
March 12, 2021, MjLink.com relieved all its $364,688 debt obligation to the Company.
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 that the Company would cease operating MjLink as its cannabis division. and going forward
MjLink would conduct its own operations (the “Spin-Off”). The Company recorded a loss from discontinued operations of $27,700
during the year ended December 31, 2021. In connection with the Spin-Off, MjLink issued the Company 800,000 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 Company’s
and MjLink’s Chief Executive Officer and the transaction was treated as a related party transaction. Thereafter, 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 of the Spin-Off transaction (“Effective Date”). Apart from the Effective Date, there
were no further changes to the Spin-Off Agreement.
SCHEDULE OF DISCONTINUED OPERATIONS
| | |
Six months ended
June 30, 2022 | | |
Six months ended
June 30, 2021 | |
| | |
| | |
| |
| Operating loss | |
$ | - | | |
$ | (27,700 | ) |
| Income(loss) before provision for income taxes | |
$ | - | | |
$ | (27,700 | ) |
| Provision for income taxes | |
| - | | |
| - | |
| Net loss | |
$ | - | | |
$ | (27,700 | ) |
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.
Since
the onset of Covid-19 in March 2020 we have experienced material decreases in our revenues
Since
March 2020 we have experienced material decreases in our revenues and results of operations due to Covid-19. 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.