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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K

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

                  For the fiscal year ended September 30, 2014

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

     For the transition period from _________________ to __________________

                        Commission file number: 001-33968

                              Peer to Peer Network
             (Exact name of registrant as specified in its charter)

           Nevada                                                45-4928294
(State or other jurisdiction of                               (I.R.S. Employer
 incorporation or organization)                              Identification No.)

2360 Corporate Circle, Suite 400, Henderson, NV                  89074-7722
    (Address of principal executive offices)                     (Zip Code)

                                 1-702-608-7360
              (Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:         None
Securities registered pursuant to Section 12(g) of the Act:         Common Stock

Indicate by check mark if the  registrant is a well-known  seasoned  issuer,  as
defined in Rule 405 of the Securities Act. [ ] Yes [X] No

Indicate  by  check  mark if the  registrant  is not  required  to file  reports
pursuant to Section 13 or 15(d) of the Act: [ ] Yes [X] No

Indicate by check mark whether the  registrant(1) has filed all reports required
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 day. [X] Yes [ ] No

Indicate by check mark whether the registrant has submitted  electronically  and
posted on its corporate Web site, if any, every  Interactive  Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T (ss.232.405 of
this chapter)  during the  preceding 12 months (or for such shorter  period that
the registrant was required to submit and post such files). [X] Yes [ ] No

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulations S-K is not contained  herein,  and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]

Indicate by check mark whether the registrant is a large  accelerated  filer, an
accelerated filer, a non-accelerated  filer, or a smaller reporting company. See
the definitions of "large accelerated  filer,"  "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer [ ]                        Accelerated filer [ ]
Non-accelerated filer [ ]                          Smaller reporting company [X]

Indicate by check mark whether the  registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). [ ] Yes [X] No

State the aggregate market value of the voting and non-voting common equity held
by non-affiliates  computed by reference to the price at which the common equity
was last sold, or the average bid and ask price of such common equity, as of the
last  business day of the  registrant's  most recently  completed  second fiscal
quarter: $569,952 at March 31, 2014.

Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest  practicable date:  106,626,666  shares of common
stock as of September 30, 2014.

                       DOCUMENTS INCORPORATED BY REFERENCE

Part III  incorporates by reference  certain  information  from the registrant's
definitive proxy statement for the 2014 Annual Meeting of Shareholders.

FORWARD-LOOKING STATEMENTS This Annual Report on Form 10-K contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are "forward-looking statements" for purposes of federal and state securities laws, including, but not limited to, any projections of earnings, revenue or other financial items; any statements of the plans, strategies and objections of management for future operations; any statements concerning proposed new services or developments; any statements regarding future economic conditions or performance; any statements or belief; and any statements of assumptions underlying any of the foregoing. Forward-looking statements may include the words "may," "could," "estimate," "intend," "continue," "believe," "expect" or "anticipate" or other similar words. These forward-looking statements present our estimates and assumptions only as of the date of this report. Except for 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. The factors impacting these risks and uncertainties include, but are not limited to; increased competitive pressures from existing competitors and new entrants; our ability to efficiently and effectively finance our operations; deterioration in general or regional economic conditions; adverse state or federal legislation or regulation that increases the costs of compliance; ability to achieve future sales levels or other operating results; the fact that our accounting policies and methods are fundamental to how we report our financial condition and results of operations, and they may require management to make estimates about matters that are inherently uncertain; the psychic services market; our ability to develop a fully-functioning web portal; changes in U.S. GAAP or in the legal, regulatory and legislative environments in the markets in which we operate; inability to efficiently manage our operations; the inability of management to effectively implement our strategies and business plans; and the other risks and uncertainties detailed in this report. Throughout this Annual Report on Form 10-K references to "we", "our", "us", "PTOP", "the Company", and similar terms refer to Peer to Peer Network. 2
PEER TO PEER NETWORK FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014 INDEX TO FORM 10-K Page ---- PART I Item 1 Business....................................................... 4 Item 1A Risk Factors................................................... 5 Item 1B Unresolved Staff Comments...................................... 6 Item 2 Properties..................................................... 6 Item 3 Legal Proceedings.............................................. 6 Item 4 Mine Safety Disclosures........................................ 6 PART II Item 5 Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.............. 7 Item 6 Selected Financial Data........................................ 8 Item 7 Management's Discussion and Analysis of Financial Condition and Results of Operations...................................... 8 Item 7A Quantitative and Qualitative Disclosures About Market Risk..... 10 Item 8 Financial Statements and Supplementary Data.................... 10 Item 9 Changes in and Disagreements With Accountants on Accounting and Financial Disclosure....................................... 10 Item 9A Controls and Procedures........................................ 10 Item 9B Other Information.............................................. 11 PART III Item 10 Directors, Executive Officers and Corporate Governance......... 12 Item 11 Executive Compensation......................................... 12 Item 12 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters................................ 12 Item 13 Certain Relationships and Related Transactions, and Director Independence................................................... 12 Item 14 Principal Accounting Fees and Services......................... 12 PART IV Item 15 Exhibits, Financial Statement Schedules........................ 13 3
PART I ITEM 1 BUSINESS CORPORATE HISTORY AND BACKGROUND Peer to Peer Network (OTC:PTOP) hereinafter, ("the Company") was incorporated in the State of Nevada on May 9, 2007 under the name "Web Wizard, Inc.". On February 17, 2012 the Company changed its name to "Psychic Friends Network, Inc." pursuant to an asset purchase agreement executed on January 27, 2012. As part of this agreement, all of the assets of PFN Holdings were purchased. These assets are an integral part of the Company's business development and ultimately the realization of the Company's anticipated cash flows. On August 27, 2014, the Company changed its name to Peer to Peer Network. BUSINESS Peer to Peer Network, http://peer2peernet.com/ is a holding company centered in the booming Peer-to-Peer Industry. We believe that Peer-to-Peer Networks are here to stay. By sharing what they already own, instead of buying new, people are able to save money, make money, and help the environment. At Peer-to Peer-Network, OUR VISION is to accomplish all three, and we want the whole world to join us. We like to call it COLLABORATIVE CONSUMPTION. Our assets include the Psychic Friends Network ("PFN"), and 321Lend, Inc ("321Lend"), and we envision acquiring other properties in the growing Peer to Peer Industry. PFN is a marketing and entertainment company that provides on-demand psychic advice, as well as daily and weekly horoscopes. www.psychicfriendsnetwork.com A leader in the psychic industry with memorable television/radio marketing and infomercials generating nearly $1 Billion in revenues. The same management team who built the iconic "Psychic Friends" brand is working together again; this time with the clear advantage of the internet, social media, and easier methods for billing and better communication technology. 321Lend is a peer-to-peer lending platform offering prime consumers in the United States a fast and efficient way to borrow money at attractive interest rates. 321Lend also offers accredited investors a robust, transparent platform for investing in consumer loans. 321LEND On August 7, 2014, the "Company closed its previously announced merger ("Merger") with 321Lend, Inc. ("321Lend") pursuant to an Agreement and Plan of Merger dated July 17, 2014 by and among the Company, 321Lend and PFN Sub Inc., a wholly owned subsidiary of the Company ("Merger Sub"). At the effective time of the Merger, Merger Sub merged with and into 321Lend, and the Company issued 18,000,000 shares of its common stock to stockholders of 321 Lend ("Merger Stock"), and Shin Hwang was appointed to the Company's board of directors ("321Lend Director"). Pursuant to the Merger, the Merger Stock and the assets of 321Lend shall be held in escrow pending 321Lend's ability to raise $500,000 in capital financing on terms acceptable to the Company's board of directors (including the 321Lend Director) within 90 days of the effective time of the Merger (the "Capital Raise"). If the Capital Raise is unsuccessful, the Merger Stock shall be canceled and returned to treasury, the 321Lend assets shall be returned to its stockholders, and the 321Lend Director shall resign. On December 3, 2014, the parties agreed to extend the 90 day deadline for the capital raise by an additional 90 days, with all other terms of the agreement remaining the same. As of the date of this filing, the capital raise is not complete. Upon successful completion of the Capital Raise, (i) the Merger Stock and 321Lend assets shall be released from escrow, (ii) the Company shall issue warrants to purchase an aggregate of 100,000,000 shares of Company common stock at a price of $0.02, with a minimum exercise of 1,000,000 shares, a term of 7 years, and cash-only exercise, to the 321Lend stockholders, (iii) the Company shall take steps to cause its shareholders to approve an increase in the size of the Company board of directors to five directors, upon which the Company board 4
of directors shall fill the remaining two director vacancies with two representatives of 321Lend, and (iiii) the Company shall adopt employment agreements for the Company's Chief Executive Officer Marc Lasky and President Michael Lasky, and 321Lend's Shin Hwang, Johnny Tong and Chris Wu. Upon 321Lend's successful commercial launch of its website and resulting origination of its first loan to a borrower, the Company shall issue warrants to purchase an aggregate of 36,000,000 shares of Company common stock at a price of $0.05, with a minimum exercise of 1,000,000 shares, a term of 7 years, and cash-only exercise, to the 321Lend stockholders. Upon 321Lend's successful origination of an aggregate of $2,500,000 in loans to borrowers, the Company shall issue warrants to purchase an aggregate of 72,000,000 shares of Company common stock at a price of $0.10, with a minimum exercise of 1,000,000 shares, a term of 7 years, and cash-only exercise, to the 321Lend stockholders. Upon 321Lend's successful commercial launch of its website and resulting origination of its first loan to a borrower, the Company shall issue warrants to purchase an aggregate of 36,000,000 shares of Company common stock at a price of $0.05, with a minimum exercise of 1,000,000 shares, a term of 7 years, and cash-only exercise, to the 321Lend stockholders. Upon 321Lend's successful origination of an aggregate of $2,500,000 in loans to borrowers, the Company shall issue warrants to purchase an aggregate of 72,000,000 shares of Company common stock at a price of $0.10, with a minimum exercise of 1,000,000 shares, a term of 7 years, and cash-only exercise, to the 321Lend stockholders. MARKETING For PFN, we plan to advertise and market our services via the following avenues: INFOMERCIALS - we anticipate that paid advertisements on television/radio will be used to provide information about our services and direct traffic to our different mediums. WEB-BASED ANALYTICS - we plan to use advertisements, social media and search engine optimization to help inform our target audience as well as make us stand out from our peers. WORD OF MOUTH - from historical experience, we believe that our clients will tend to be repeat customers and friends of past customers. Word of mouth and positive client experiences are a very important source of marketing and based on providing a high level of service. With the strength of our brand name both psychics and customers are very excited about the re-launch. COMPETITION The market for psychic services is competitive. PFN compete with a significant number of online, telephone and brick and mortar psychic service companies, the largest of which are Keen, California Psychics, Ask Now, Psychic Source and Live Person. Many of PFN competitors have significant advantages over PFN in terms of scale, operating histories, number of locations in operation, capital and other resources. PFN is a start-up company that has just begun to commence commercial operations. Accordingly, there can be no assurances that PFN can successfully compete in this market. EMPLOYEES As of September 30, 2014, the Company had two full time consultants and no employees. Our personnel are responsible for performing or overseeing all operations of the Company. Specifically, our personnel direct responsibilities include, but are not limited to, developing our website and mobile application, seeking the investment capital necessary to commence and build commercial operations, creating our marketing, branding and sales strategy, driving the overall services strategy, customer service, operations, and all financial reporting and general administrative duties. ITEM 1A RISK FACTORS Not required for a smaller reporting company. 5
ITEM 1B UNRESOLVED STAFF COMMENTS Not required for a smaller reporting company. ITEM 2 PROPERTIES Our principle corporate offices are located at 2360 Corporate Circle, Suite 400, Henderson NV 89074. ITEM 3 LEGAL PROCEEDINGS None. ITEM 4 MINE SAFETY DISCLOSURES Not applicable. 6
PART II ITEM 5 MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our Common Stock is listed to trade in the over-the-counter securities market through OTC Markets OTCQB under the symbol "PTOP". The following table sets forth the quarterly high and low bid prices for our Common Stock since we began trading on April 17, 2012, as reported by Yahoo! Finance. The quotations reflect inter-dealer prices, without retail mark-up, markdown or commission, and may not necessarily represent actual transactions. Bid Prices ($) ------------------ Quarter Ending High Low -------------- ---- --- June 30, 2012 1.10 0.72 September 30, 2012 0.75 0.35 December 31, 2012 0.63 0.07 March 31, 2013 0.12 0.01 June 30, 2013 0.04 0.01 September 30, 2013 0.02 0.01 December 31, 2013 0.07 0.01 March 31, 2014 0.04 0.01 June 30, 2014 0.03 0.01 September 30, 2014 0.03 0.01 December 31, 2014 0.02 0.01 On September 30, 2014, the closing price for our common stock on the OTCQB was $0.0140 per share. HOLDERS As of September 30, 2014, we had 19 holders of our common stock. DIVIDEND POLICY The payment of dividends in the future rests within the discretion of our Board of Directors and will depend upon our earnings, capital requirements and financial condition, as well as other relevant factors. We do not intend to pay any cash dividends in the foreseeable future, but intend to retain all earnings, if any, for use in our business. EQUITY COMPENSATION PLAN INFORMATION On September 17, 2012, the Company adopted the 2012 PFN Stock Plan ("the Plan"). The total number of shares of stock which may be granted directly by options, stock awards or restricted stock purchase offers, shall not exceed 8,250,000. The Plan indicates that the exercise price of an award is equivalent to the market value of the Company's common stock on the grant date. The following table gives information about our common stock that may be issued under our existing equity compensation plans as of September 30, 2014. 7
Number of Securities Number of Securities to be Remaining Available for Issued Upon Exercise of Weighted-Average Exercise Future Issuance Under Outstanding Options, Price of Outstanding Options, Equity Compensation Plans Warrants and Rights Warrants and Rights (excluding column (a)) Plan Category (a) (b) (c) ------------- ------------------- ------------------- ------------------------- Equity Compensation Plans 0 -- 8,250,000 Approved by Security Holders Equity Compensation Plans Not 0 -- n/a Approved by Security Holders Total 0 -- 8,250,000 RECENT SALES OF UNREGISTERED SECURITIES During the quarter ended September 30, 2014, the Company sold 8,550,000 shares of common stock to eight investors for gross proceeds of $171,000. The securities were sold exempt from registration under the Section 4(2) of the Securities Act of 1933. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS None. ITEM 6 SELECTED FINANCIAL DATA Not required for smaller reporting companies. ITEM 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS The following discussion of the financial condition and results of operations should be read in conjunction with the financial statements included herewith. This discussion should not be construed to imply that the results discussed herein will necessarily continue into the future, or that any conclusion reached herein will necessarily be indicative of actual operating results in the future. YEAR ENDED SEPTEMBER 30, 2014 AND 2013: REVENUE We generated revenue of $1,785 and $987 for the year ended September 30, 2014 and 2013. Since our inception, we have been primarily focused on corporate organization and development of our web site and mobile application. We do not anticipate earning significant revenues until such time that we have sufficient capital to market our services. EXPENSES During the year ended September 30, 2014, total operating expenses were $315,950 compared to $445,027 for the year ended September 30, 2013. The majority of the operating expenses incurred during both years were consulting, legal, professional and general and administrative costs, and website development. 8
NET LOSS Our net loss for the year ended September 30, 2014 was $395,584 as compared to a net loss of $444,040 for the year ended September 30, 2013. OTHER COMPREHENSIVE LOSS During the year ended September 30, 2014 the Company purchased 80,000,000 common shares of Telecorp, Inc. (TLNF.pk) for $2,150 in cash. The Company is holding these securities available for sale. During the year the Company sold 48,000,000 shares for $5,555 recognizing a capital gain of $4,265. As of September 30, 2014, the Company had a remainder of 9,143 post split shares and recorded an unrealized capital loss of $631 reported to 'other comprehensive income' after a mark-to-market adjustment. The Company had no such transaction during the year ended September 30, 2013. LIQUIDITY AND FINANCIAL CONDITION As of September 30, 2014, we had current assets of $2,998 consisting of cash, accounts receivable and equity securities available for sale and current liabilities of $133,833. We believe that currently we do not have sufficient funds to execute our business plan. We anticipate that additional capital will be required to implement our business plan to pay for marketing efforts to support our revenue forecast for fiscal year 2015. In order to obtain the necessary capital, we may need to sell additional shares of common stock or borrow funds from private lenders. Even if we are able to raise the funds required, it is possible that we could incur unexpected costs and expenses, fail to collect significant amounts owed to us or experience unexpected cash requirements that would force us to seek alternative financing. Further, if we issue additional equity or debt securities as a means of raising additional capital, stockholders may experience dilution or the new equity securities may have rights, preferences or privileges senior to those of existing holders of common stock. PLAN OF OPERATIONS We launched our website in 2013 at www.psychicfriendsnetwork.com. Our plan is to take a multi-faceted approach towards marketing. This will include both online and offline marketing. Our online marketing will include a robust pay per click campaigns with Google, Microsoft and Yahoo. We have contacted experts in the PPC field so that we can commence these campaigns once we secure appropriate funding. We will also do affiliate marketing on a CPA (cost per acquisition) basis. Using this model, we will only pay the affiliated for a paid customer, and they pay for their own marketing, so it is a very targeted brand of marketing. We will also be doing some banner ads on a CPI (cost per impression) basis and contextual marketing, where we can serve people ads only after they express interest in psychics or horoscopes. Regarding our offline advertising, this is our true strength, as witnessed from our previous run of success. We already have new television spots produced that we expect to perform extremely well. These spots were all produced by the same team that produced the original Psychic Friends Network infomercials. In addition, we are expecting our mobile app to be finished during the second half of 2015. We believe that our mobile app will be the most successful of all of our platforms. Mobile advertising has the best ROI, of all forms of advertising simply because the market is still relatively new, and as such is not near a saturation point. Furthermore, mobile applications are truly tailor made for Psychic Friends. For the first time ever we can contact our customer in their pockets or purses. We can let them know about promo offers, or send them a horoscope or with them a happy birthday with a discount code. And, the customer is just a few clicks away from connecting to one of our hand chosen psychics anytime or anywhere that they have their mobile smart phones. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES See Note 2 to the notes to our financial statements. OFF-BALANCE SHEET ARRANGEMENTS None. 9
ITEM 7A QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Not required for smaller reporting companies. ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA See F-1. ITEM 9 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. ITEM 9A CONTROLS AND PROCEDURES EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES Disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the "Exchange Act"), are our controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Act is accumulated and communicated to our management, including our Chief Executive and Financial Officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Rules 13a-15(b) and 15d-15(b) under the Exchange Act, requires us to carry out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of September 30, 2014, being the date of our most recently completed fiscal year end. This evaluation was implemented under the supervision and with the participation of our Chief Executive and Financial Officer. Based on that evaluation, our management, including our Chief Executive and Financial Officer have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures are effective in ensuring that information required to be disclosed in our Exchange Act reports is (1) recorded, processed, summarized and reported in a timely manner, and (2) accumulated and communicated to our management, including our Chief Executive and Financial Officer, as appropriate to allow timely decisions regarding required disclosure. MANAGEMENT'S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING Management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control system was designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation and fair presentation of our financial statements for external purposes in accordance with generally accepted accounting principles. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Our officers have assessed the effectiveness of our internal controls over financial reporting as of September 30, 2014. In making this assessment, management used the criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based upon its assessment, management concluded that, as of September 30, 2014, our internal control over financial reporting was not effective. Management believes the controls were not effective due to the simple fact that segregation of duties is not feasible given the size of the entity and limited management personnel. 10
This Annual Report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by our registered public accounting firm pursuant to an exemption for smaller reporting companies under Section 989G of the Dodd-Frank Wall Street Reform and Consumer Protection Act. CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING During the final quarter of the year ended September 30, 2014, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. ITEM 9B OTHER INFORMATION None. 11
PART III ITEM 10 DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE Incorporated by reference from our 2015 Proxy Statement. ITEM 11 EXECUTIVE COMPENSATION Incorporated by reference from our 2015 Proxy Statement. ITEM 12 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS Incorporated by reference from our 2015 Proxy Statement. ITEM 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE Incorporated by reference from our 2015 Proxy Statement. ITEM 14 PRINCIPAL ACCOUNTING FEES AND SERVICES Incorporated by reference from our 2015 Proxy Statement. 12
PART IV ITEM 15 EXHIBITS, FINANCIAL STATEMENT SCHEDULES Number Exhibit ------ ------- 3.1 (1) Articles of Incorporation 3.2 (1) Bylaws 31 (2) Rule 13a-14(a) Certification of Principal Executive and Financial Officer 32 (2) Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of Principal Executive and Financial Officer 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 ---------- (1) Incorporated by reference to the exhibits to the registrant's registration statement on Form SB-2 dated January 11, 2008. (2) Furnished herewith. * Pursuant to applicable securities laws and regulations, we are deemed to have complied with the reporting obligation relating to the submission of interactive data files in such exhibits and are not subject to liability under any anti-fraud provisions of the federal securities laws as long as we have made a good faith attempt to comply with the submission requirements and promptly amend the interactive data files after becoming aware that the interactive data files fail to comply with the submission requirements. Users of this data are advised that, pursuant to Rule 406T, these interactive data files are deemed not filed and otherwise are not subject to liability. 13
SIGNATURES Pursuant to the requirements of Section 13 or 15(d) 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. Peer to Peer Network Date: January 21, 2015 /s/ Marc Lasky ------------------------------------------------ Marc Lasky, Director and Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Title Date --------- ----- ---- /s/ Marc Lasky Director and Chief Executive Officer January 21, 2015 -------------------------- (Principal Executive, Financial and Marc Lasky Accounting Officer) /s/ Michael Lasky -------------------------- Michael Lasky Director and President January 21, 2015 /s/ Shin Hwang Director January 21, 2015 -------------------------- Shin Hwang 14
[LETTERHEAD OF SADLER, GIBB & ASSOCIATES, LLC] REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors Peer to Peer Network (fka Psychic Friends Network, Inc.) We have audited the accompanying consolidated balance sheets of Peer to Peer Network (fka Psychic Friends Network, Inc.) (the Company) as of September 30, 2014 and 2013 and the related consolidated statements of operations, stockholders' equity (deficit) and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Peer to Peer Network (fka Psychic Friends Network, Inc.) as of September 30, 2014 and 2013, and the results of their operations and cash flows for the years then ended, in conformity with U.S. generally accepted accounting principles. The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has accumulated losses from inception (May 9, 2007) of $1,294,258 as of September 30, 2014 which raises substantial doubt about its ability to continue as a going concern. Management's plans concerning these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. /s/ Sadler, Gibb & Associates, LLC ------------------------------------------- Salt Lake City, UT January 20, 2015 F-1
Peer to Peer Network (Formerly "Psychic Friends Network, Inc.") BALANCE SHEETS September 30, September 30, 2014 2013 ------------ ------------ ASSETS Current assets Cash $ 2,644 $ 75,393 Accounts receivable 125 -- Equity securities available for sale 229 -- ------------ ------------ Total current assets 2,998 75,393 Investment in securities, at cost 70,000 -- Intangible assets Website development costs (net of $57,300 and $28,764 of accumulated amortization, respectively) 27,136 55,672 ------------ ------------ Total Assets $ 100,134 $ 131,065 ============ ============ LIABILITIES Current Liabilities Accounts payable and accrued liabilities $ 88,087 $ 58,683 Accrued salaries to an officer 11,250 -- Convertible notes payable, net of discount of $18,504 and $-0-, respectively 34,496 -- ------------ ------------ Total current liabilities 133,833 58,683 ------------ ------------ Total Liabilities 133,833 58,683 ------------ ------------ STOCKHOLDERS' EQUITY (DEFICIT) Common stock; 750,000,000 shares authorized at $0.001 par value; 88,977,543 and 84,907,543 issued and outstanding at September 30, 2014 and September 30, 2013, respectively 88,978 84,908 Common stock payable 171,000 -- Additional paid-in capital 1,001,212 886,148 Accumulated other comprehensive loss (631) -- Accumulated deficit (1,294,258) (898,674) ------------ ------------ Total stockholders' equity (deficit) (33,699) 72,382 ------------ ------------ Total liabilities and stockholders' equity (deficit) $ 100,134 $ 131,065 ============ ============ The accompanying notes are an integral part of these financial statements. F-2
Peer to Peer Network (Formerly "Psychic Friends Network, Inc.") STATEMENTS OF OPERATIONS For the Years Ended ------------------------------------ September 30, September 30, 2014 2013 ------------ ------------ REVENUE $ 1,785 $ 987 ------------ ------------ OPERATING EXPENSES Payroll expenses 146,542 144,891 Depreciation and amortization 28,536 23,261 General and administrative 31,407 131,665 Consulting fees 66,570 73,636 Legal and professional 42,895 71,574 ------------ ------------ TOTAL OPERATING EXPENSES 315,950 445,027 ------------ ------------ NET LOSS FROM OPERATIONS (314,165) (444,040) OTHER EXPENSE (INCOME) Interest expense 77,684 -- Loss on debt settlement 8,000 -- Capital gains on equity securities available for sale (4,265) -- ------------ ------------ TOTAL OTHER EXPENSE 81,419 -- ------------ ------------ NET LOSS BEFORE INCOME TAXES (395,584) (444,040) PROVISION FOR INCOME TAX -- -- ------------ ------------ NET LOSS FOR THE PERIOD $ (395,584) $ (444,040) ============ ============ OTHER COMPREHENSIVE INCOME (LOSS) Unrealized losses on equity investments 631 -- ------------ ------------ COMPREHENSIVE LOSS $ (396,215) $ (444,040) ============ ============ BASIC AND DILUTED (LOSS) PER COMMON SHARE $ (0.00) $ (0.01) ============ ============ WEIGHTED AVERAGE NUMBER OF COMMON SHARES (BASIC AND DILUTED) 85,774,310 84,321,659 ============ ============ The accompanying notes are an integral part of these financial statements. F-3
Peer to Peer Network (Formerly "Psychic Friends Network, Inc.") STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT) Accumulated Other Common Stock Additional Comprehensive ------------------- Paid-in Income Issued Amount Capital (Loss) ------ ------ ------- ------ BALANCE, SEPTEMBER 30, 2012 84,016,334 $84,017 $ 875,065 $ -- Shares issued for consulting services - November 29, 2012 at $0.34876 per share 16,209 16 5,637 -- Shares issued for consulting services - May 15, 2013 at $0.01 per share 750,000 750 6,750 -- Forfeited stock options -- -- (2,429) -- Shares issued for consulting services - Sept 06, 2013 at $0.01 per share 125,000 125 1,125 -- Net loss for the year ended September 30, 2013 -- -- -- -- ---------- ------- ---------- ------ BALANCE, SEPTEMBER 30, 2013 84,907,543 84,908 886,148 -- Shares issued for consulting services - December 13, 2013 at $0.041 per share 70,000 70 2,800 -- Beneficial Conversion Feature - Feburary 6, 2014 -- -- 33,885 -- Beneficial Conversion Feature - April 6, 2014 -- -- 38,379 -- Shares issued for conversion of debt - July 18, 2014 at $0.011 per share 4,000,000 4,000 400,000 -- Shares payable issued for cash - August 12, 2014 at $0.02 per share -- -- -- -- Unrealized loss on equity securities available for sale -- -- -- (631) Net loss for the year ended September 30, 2014 -- -- -- -- ---------- ------- ---------- ------ BALANCE, SEPTEMBER 30, 2014 88,977,543 $88,978 $1,001,212 $ (631) ========== ======= ========== ====== Total Subscriptions Payable Stockholders' --------------------- Accumulated Equity Issuable Amount Deficit (Deficit) -------- ------ ------- --------- BALANCE, SEPTEMBER 30, 2012 -- $ -- $ (454,634) $ 504,448 Shares issued for consulting services - November 29, 2012 at $0.34876 per share -- -- -- 5,653 Shares issued for consulting services - May 15, 2013 at $0.01 per share -- -- -- 7,500 Forfeited stock options -- -- -- (2,429) Shares issued for consulting services - Sept 06, 2013 at $0.01 per share -- -- -- 1,250 Net loss for the year ended September 30, 2013 -- -- (444,040) (444,040) --------- -------- ----------- --------- BALANCE, SEPTEMBER 30, 2013 -- -- (898,674) 72,382 Shares issued for consulting services - December 13, 2013 at $0.041 per share -- -- -- 2,870 Beneficial Conversion Feature - Feburary 6, 2014 -- -- -- 33,885 Beneficial Conversion Feature - April 6, 2014 -- -- -- 38,379 Shares issued for conversion of debt - July 18, 2014 at $0.011 per share -- -- -- 44,000 Shares payable issued for cash - August 12, 2014 at $0.02 per share 8,550,000 171,,000 -- 171,000 Unrealized loss on equity securities available for sale -- -- -- (631) Net loss for the year ended September 30, 2014 -- -- (395,584) (395,584) --------- -------- ----------- --------- BALANCE, SEPTEMBER 30, 2014 8,550,000 $171,000 $(1,294,258) $ (33,699) ========= ======== =========== ========= The accompanying notes are an integral part of these financial statements. F-4
Peer to Peer Network (Formerly "Psychic Friends Network, Inc.") STATEMENTS OF CASH FLOWS For the Years Ended ---------------------------------- September 30, September 30, 2014 2013 ---------- ---------- OPERATING ACTIVITIES Net loss $ (395,584) $ (444,040) Adjustments to reconcile net loss from operations: Capital gain on securities held for sale (4,265) -- Expenses paid for by director -- 4,411 Stock-based compensation for options issued -- (2,429) Amortization expense 28,536 23,261 Common stock issued for services 2,870 14,403 Amortization of debt discount 53,760 -- Expenses paid with convertible note 9,000 -- Loss on settlement of a liability 8,000 -- Change in operating assets and liabilities: Prepaid expenses -- 1,000 Accounts receivable (125) -- Accrued interest 3,046 -- Accounts payable related party 11,250 Increase in accounts payable and accrued liabilities 62,359 20,986 ---------- ---------- NET CASH USED IN OPERATING ACTIVITIES (221,153) (382,408) ---------- ---------- INVESTING ACTIVITIES Capitalization of website development costs -- (37,686) Purchase of securities available for sale (2,150) -- Proceeds from sale of securities held for sale 5,555 -- Purchase of investment in securities, at cost (70,000) -- ---------- ---------- NET CASH USED IN INVESTING ACTIVITIES (66,595) (37,686) ---------- ---------- FINANCING ACTIVITIES Proceeds from issuance of common stock -- -- Proceeds from cash subscriptions payable 171,000 -- Proceeds from related parties -- -- Proceeds from convertible notes payable 97,000 -- Repayments of convertible notes payable (53,000) -- Repayments of amounts due to director -- (4,411) ---------- ---------- NET CASH PROVIDED BY FINANCING ACTIVITIES 215,000 (4,411) ---------- ---------- NET (DECREASE) IN CASH AND CASH EQUIVALENTS (72,748) (424,505) CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD 75,393 499,898 ---------- ---------- CASH AND CASH EQUIVALENTS - END OF PERIOD $ 2,645 $ 75,393 ========== ========== SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid for interest $ 20,115 $ -- ========== ========== Cash paid for taxes $ -- $ -- ========== ========== NON-CASH INVESTING AND FINANCING ACTIVITIES: Debt discount on convertible notes payable $ 72,264 $ -- ========== ========== Common stock issued for accrued salaries $ 44,000 $ -- ========== ========== The accompanying notes are an integral part of these financial statements. F-5
Peer to Peer Network (Formerly "Psychic Friends Network, Inc.") NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS September 30, 2014 and September 30, 2013 NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS Peer to Peer Network (OTC:PTOP) hereinafter, ("the Company") was incorporated in the State of Nevada on May 9, 2007 under the name "Web Wizard, Inc.". On February 17, 2012 the Company's board passed a motion to change the corporate name to "Psychic Friends Network, Inc." pursuant to an asset purchase agreement executed on January 27, 2012. As part of this agreement, all of the assets of PFN Holdings were purchased. These assets are an integral part of the Company's business development and ultimately the realization of the Company's anticipated cash flows. On September 8, 2014 the Company's board passed a motion to change the corporate name to "Peer to Peer Network". The Company is in the business of providing daily horoscopes and live psychic advice by telephone, internet or our soon to be released mobile application. Our website is www.psychicfriendsnetwork.com. First time customers will be offered promotions and are able to choose their psychic friend by specialties. They also are able to establish an ongoing relationship with their advisor, or they can choose to try someone new the next time they call. We will strive to stay on the cutting edge of technology in an effort to deliver our content. Currently this includes Facebook applications, and twitter pages, that reward our customers with free credits towards readings for sharing, liking or tweeting about PTOP. We will also be giving all of our psychics their own website, to find new customers. BASIS OF PRESENTATION The Company has not generated significant revenues from operations. There is no bankruptcy, receivership, or similar proceedings against our company. The accompanying audited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the United States Securities and Exchange Commission for annual financial information. GOING CONCERN The accompanying financial statements have been prepared assuming the Company will continue as a going concern. Its ability to continue as a going concern is dependent upon the ability of the Company to obtain the necessary financing to meet its obligations and pay its liabilities arising from normal business operations when they come due. Furthermore, as of September 30, 2014, the Company has accumulated losses from inception (May 9, 2007) of $1,294,258. The outcome of these matters cannot be predicted with any certainty at this time and raise substantial doubt that the Company will be able to continue as a going concern. These financial statements do not include any adjustments to the amounts and classification of assets and liabilities which may be necessary should the Company be unable to continue as a going concern. Management believes that the Company will need to obtain additional funding by borrowing funds from its directors and officers, or a private placement of common stock through various sales and public offerings. The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America. Because a precise determination of many assets and liabilities is dependent upon future events, the preparation of financial statements involves the use of estimates, which have been made using judgment. Actual results may vary from these estimates. The financial statements have, in management's opinion, been prepared within the framework of the significant accounting policies summarized below: F-6
Peer to Peer Network (Formerly "Psychic Friends Network, Inc.") NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS September 30, 2014 and September 30, 2013 NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES CASH AND CASH EQUIVALENTS The Company considers highly liquid financial instruments purchased with a maturity of three months or less to be cash equivalents. USE OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. ACCOUNTS RECEIVABLE Accounts receivable are reported at the customers' outstanding balances less any allowance for doubtful accounts. Interest is not accrued on overdue accounts receivable. The Company evaluates receivables on a regular basis for potential reserve. FAIR VALUE OF FINANCIAL INSTRUMENTS Fair value accounting establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below: Level 1 Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2 Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; and Level 3 Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity). The Company's financial instruments consist of cash, accounts receivable, equity securities available for sale, accounts payable and accrued liabilities. Except for the equity securities available for sale which are valued using level 1 inputs, the carrying amount of these financial instruments approximate fair value due to either length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these financial statements. REVENUE RECOGNITION The Company recognizes revenue on an accrual basis. The Company generally earns revenue through the online sale of service minutes. These purchases obligate the Company to arrange a telephonic conversation with a designated service provider of the customers choosing. The Company remits a portion of the fee to the service provider and retains the balance. At the time of sale, the formal arrangements are made and the Company has fulfilled its obligation. Furthermore, the Company's portions of any fees collected are non-refundable. Revenue is generally realized or realizable and earned when all of the following criteria are met: 1) persuasive evidence of an arrangement exists between the Company and our customer(s); 2) services have been rendered; 3) our price to our customer is fixed or determinable; and 4) collectability is reasonably assured. For the year ended September 30, 2014 and 2013, the Company recognized revenues of $1,785 and $987 for which each of the four aforementioned criteria were satisfied. F-7
Peer to Peer Network (Formerly "Psychic Friends Network, Inc.") NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS September 30, 2014 and September 30, 2013 NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED) PER SHARE DATA In accordance with "ASC 260 - Earnings per Share", the basic loss per common share is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding. Diluted loss per common share is computed similar to basic loss per common share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. At September 30, 2014 and September 30, 2013, the Company had no stock equivalents that were anti-dilutive and excluded in the loss per share computation. STOCK-BASED COMPENSATION The Company records stock based compensation in accordance with the guidance in ASC Topic 718 which requires the Company to recognize expenses related to the fair value of its employee stock option awards. This eliminates accounting for share-based compensation transactions using the intrinsic value and requires instead that such transactions be accounted for using a fair-value-based method. The Company records the value for options granted over the vesting period of the options granted. Accordingly, the Company did not recognized expenses during the year ended September 30, 2014 and 2013, respectively (see Note 6). INVESTMENT IN SECURITIES The cost of the Company's cost-method investment consist of an investment in a company with which a merger is contemplated (see subsequent events footnote Note 9) that totaled $70,000 and $0 at September 30, 2014 and 2013. As the Company owned less than 20% of that company's stock as of September 30, 2014, and no significant influence or control exists, the investment is accounted for using the cost method. The Company evaluated the investment for impairment. No impairment was noted as of September 30, 2014. WEBSITE DEVELOPMENT COSTS The Company capitalizes its costs to develop its website and when preliminary development efforts are successfully completed, management has authorized and committed project funding, and it is probable that the project will be completed and the website will be used as intended. Such costs are amortized on a straight-line basis over the estimated useful life of the related asset, which approximates three years. Costs incurred prior to meeting these criteria, together with costs incurred for training and maintenance, are expensed as incurred. Costs incurred for enhancements that are expected to result in additional material functionality are capitalized and expensed over the estimated useful life of the upgrades. The Company capitalized website costs of $-0- and $37,686 during the year ended September 30, 2014 and 2013, respectively. The Company's capitalized website amortization is included in depreciation and amortization in the Company's consolidated statements of operations, and totaled $28,536 and $23,261 for the year ended September 30, 2014 and 2013, respectively. ADVERTISING COSTS Advertising costs are to be expensed as incurred in accordance to Company policy; for the year ended September 30, 2014 and 2013, advertising expenses totaled $3,520 and $28,523, respectively. F-8
Peer to Peer Network (Formerly "Psychic Friends Network, Inc.") NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS September 30, 2014 and September 30, 2013 NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED) INCOME TAXES The Company records income taxes under the asset and liability method, whereby deferred tax assets and liabilities are recognized based on the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and attributable to operating loss and tax credit carryforwards. Accounting standards regarding income taxes requires a reduction of the carrying amounts of deferred tax assets by a valuation allowance, if based on the information available it is more likely than not that such assets will not be realized. Accordingly, the need to establish valuation allowances for deferred tax assets is assessed at each reporting period based on a more-likely-than-not realization threshold. This assessment considers, among other matters, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, the duration of statutory carryforward periods, the Company's experience with operating loss and tax credit carryforwards not expiring unused, and tax planning alternatives. RECENT ACCOUNTING PRONOUNCEMENTS In June 2014, the Financial Accounting Standards Board issued Accounting Standards Update No. 2014-10, which eliminated certain financial reporting requirements of companies previously identified as "Development Stage Entities" (Topic 915). The amendments in this ASU simplify accounting guidance by removing all incremental financial reporting requirements for development stage entities. The amendments also reduce data maintenance and, for those entities subject to audit, audit costs by eliminating the requirement for development stage entities to present inception-to-date information in the statements of income, cash flows, and shareholder equity. Early application of each of the amendments is permitted for any annual reporting period or interim period for which the entity's financial statements have not yet been issued (public business entities) or made available for issuance (other entities). Upon adoption, entities will no longer present or disclose any information required by Topic 915. The Company has adopted this standard and will not report inception to date financial information. Management has evaluated all recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the American Institute of Certified Public Accountants, and the SEC did not, or are not believed by management to, have a material impact on the Company's present or future financial position, results of operations or cash flows. NOTE 3 - INTANGIBLE ASSET The following table presents the detail of other intangible assets for the periods presented: Gross Carrying Accumulated Net Carrying Weighted-Average Amount Amortization Amount Remaining Life ------ ------------ ------ -------------- September 30, 2014: Capitalized website development costs $ 84,436 $(57,300) $ 27,136 0.96 years -------- -------- -------- ---------- Total $ 84,436 $(57,300) $ 27,136 0.96 years ======== ======== ======== ========== F-9
Peer to Peer Network (Formerly "Psychic Friends Network, Inc.") NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS September 30, 2014 and September 30, 2013 NOTE 4 - SECURITIES AVAILABLE FOR SALE During the year ended September 30, 2014 the Company purchased equity securities that are being held for sale in Telecorp, Inc. (TLNF.pk). Below is a table summarizing the activity in TLNF: For the period ended September 30, 2014 Shares Amount Gain (Loss) --------------------------------------- ------ ------ ----------- Shares purchased ($0.0000269/share) 80,000,000 $ 2,150 $ -- Shares sold (total sale of $5,555) 48,000,000 (1,290) 4,265 Reverse stock split (basis $0.094061/share) 9,143 -- -- Unrealized loss at September 30, 2014 -- (631) (631) ---------- ---------- ---------- Total 9,143 $ 229 ========== ========== ========== NOTE 5 - CONVERTIBLE NOTE PAYABLE On February 6, 2014 the Company entered into a $53,000 Convertible Promissory Note with an unrelated third party finance company to fund operating expenses in the form of $44,000 in cash and $9,000 advanced directly to vendors for expenses. The Note shall accrued interest at 8% per annum with a 22% default rate and matures on November 10, 2014. The holder has the right to convert into common stock 180 days after issuance at a variable rate of 61% of the market price as defined in the debenture document. Upon default, the Note will be convertible at par or $0.001 per share. On August 18, 2014 the Company extinguished this note by paying $73,641 in cash which included $20,115 in interest and prepayment penalties. Accordingly, the remaining debt discount on this note of $28,881 was expensed upon the extinguishment of this debt and charged to interest expense. On May 8, 2014 the Company entered into a $53,000 Convertible Promissory Note with an unrelated third party finance company to fund operating expenses in the form of $53,000 in cash . The Note shall accrued interest at 8% per annum with a 22% default rate and matures on February 12, 2015. The holder has the right to convert into common stock 180 days after issuance at a variable rate of 58% of the market price as defined in the debenture document. Upon default, the Note will be convertible at par or $0.001 per share. Accordingly, there has been a combined aggregate beneficial conversion feature discount of $72,264 was calculated on these notes and as of September 30, 2014, $53,760 in combined debt discount has been recorded as interest expense leaving a remainder of $28,764. As of June 30, 2014 there is an aggregate combined total of $3,572 in accrued interest assessed on these notes all of which was expensed during the nine months ended June 30, 2014. NOTE 6 - STOCKHOLDERS' EQUITY (DEFICIT) As summarized in Note 1 on February 17, 2012, in addition to the name change, our board of directors approved a ten (10) new for one (1) forward stock split of our authorized and issued and outstanding shares of common stock. Upon effect of the forward stock split, our authorized capital was increased from 75,000,000 to 750,000,000 shares of common stock and correspondingly, our issued and outstanding shares of common stock was increased from 8,225,000 to 82,250,000 shares of common stock as of September 30, 2011, all with a par value of $0.001. OPTIONS AND WARRANTS During July 2012, the Company's shareholders approved its 2012 Stock Option Plan ("the Plan"). Under the Plan, the Company may issue up to 8,250,000 shares at its discretion. On December 13, 2013, the Company granted 500,000 stock options to a consultant of the Company of which 200,000 vested immediately, 150,000 on December 13, 2014 and the balance of 150,000 on December 13, 2015. The options expire five (5) years following the vesting date and carry a strike price of $0.04. F-10
Peer to Peer Network (Formerly "Psychic Friends Network, Inc.") NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS September 30, 2014 and September 30, 2013 NOTE 6 - STOCKHOLDERS' EQUITY (DEFICIT) - (CONTINUED) The 500,000 vested options were valued using the Black-Scholes model and the following inputs: 5 year life, volatility of 154%, interest rate of 1.55%, and 0% forfeiture rate. The resulting value was $0.0377 per option for a total value of $7,543. The 500,000 vested options were canceled in February of 2014. Accordingly for options granted during the years pursuant to ASC Topic 718, during the year ended September 30, 2014, the Company recognized expense of $-0- and ($2,429), respectively. A summary of the status of the options granted at September 30, 2014 and September 30, 2013 and changes during the periods then ended is presented below: September 30, 2014 September 30, 2013 ----------------------------- ----------------------------- Weighted Average Weighted Average Shares Exercise Price Shares Exercise Price ------ -------------- ------ -------------- Outstanding at -- $ -- 200,000 $ 0.35 beginning of period Granted 500,000 0.04 -- -- Exercised -- -- -- -- Expired or canceled (500,000) 0.04 (200,000) 0.35 -------- ------- -------- ------- Outstanding at end of period -- $ -- -- $ -- ======== ======= ======== ======= Exercisable -- $ -- -- $ -- ======== ======= ======== ======= COMMON STOCK NOTE 7 - INCOME TAXES The Company provides for income taxes under FASB ASC 740, Accounting for Income Taxes. FASB ASC 740 requires the use of an asset and liability approach in accounting for income taxes. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax bases of assets and liabilities. FASB ASC 740 requires the reduction of deferred tax assets by a valuation allowance, if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. In the Company's opinion, it is uncertain whether they will generate sufficient taxable income in the future to fully utilize the net deferred tax asset. Accordingly, a valuation allowance equal to the deferred tax asset has been recorded. The total deferred tax asset since inception is $342,572 which is calculated by multiplying a 34% estimated tax rate by the cumulative net operating loss (NOL) adjusted for the following items: F-11
Peer to Peer Network (Formerly "Psychic Friends Network, Inc.") NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS September 30, 2014 and September 30, 2013 NOTE 7 - INCOME TAXES - (CONTINUED) For the period ended September 30, 2014 2013 ---------------------------------- ---------- ---------- Book loss for the year $ (395,584) $ (444,040) Adjustments: Meals and entertainment 640 4,065 Stock based compensation 2,870 54,201 Unpaid payroll taxes 29,542 29,542 Discount amortization 53,760 -- ---------- ---------- Tax loss for the year $ (308,773) $ (356,232) Estimated effective tax rate 34% 34% ---------- ---------- Deferred tax asset $ (104,983) $ (121,120) ========== ========== The total valuation allowance is $342,572. Details for the last two periods are as follows: For the period ended September 30, 2014 2013 ---------------------------------- ---------- ---------- Deferred tax asset $ 104,983 $ 121,120 Valuation allowance (104,983) (121,120) ---------- ---------- Net deferred tax asset -- -- ---------- ---------- Income tax expense $ -- $ -- ========== ========== Below is a chart showing the estimated corporate federal cumulative net operating loss (NOL) carry forward of $1,007,564 and the years in which it will expire. Year Amount Expiration ---- ------ ---------- 2014 $ 308,773 2034 2013 $ 356,232 2033 Prior to 2013 $ 342,559 Prior to 2033 NOTE 8 - RELATED PARTY TRANSACTIONS As of September 30, 2013, the President was owed $11,250 in accrued salaries payable. NOTE 9 - SUBSEQUENT EVENTS On November 11, 2014, the Company approved an issuance of 300,000 shares valued at $0.02 per share in exchange for $6,000 in cash. On July 17, 2014, the Company entered into an agreement and plan of merger with PFN Sub, Corp and 321 Lend, Inc. The agreement stipulates that 18,000,000 shares of the Company valued at $270,000 or $0.015 per share shall be issued in exchange for the intellectual and ownership rights of 321 Lend, Inc. The merger will not officially close and the assets of 321 Lend, Inc. and Company's common stock will be held in escrow until $500,000 in capital financing is achieved. As of September 30, 2014, $171,000 of the $500,000 had been raised (see Note 5). Furthermore, the Company has acquired securities of 321 Lend, Inc in the amount of $70,000 during the year ending September 30, 2014, which is presented in the balance sheet as "Investment in securities, at cost" The Company has evaluated events subsequent to the balance sheet date through the issuance date of these financial statements in accordance with FASB ASC 855 and has determined there are no other events that would require adjustment to, or disclosure in, the financial statements. F-1