Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended December 31, 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
(A Development Stage Company)
Nevada 45-4928294
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification No.)
2360 Corporate Circle, Suite 400, Henderson, NV 89074-7722
(Address of principal executive offices, including zip code)
(702) 608-7360
(Issuer's telephone number, including area code)
N/A
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark whether the registrant has submitted electronically and
posted on its corporate Web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-5 (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). Yes [X] No [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer", "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] 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 [ ] No [X]
APPLICABLE ONLY TO CORPORATE ISSUERS:
The issuer has 108,549,743 outstanding shares of common stock outstanding as
of December 31, 2014.
TABLE OF CONTENTS
Page
----
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements ........................................ 3
Item 2. Management's Discussion And Analysis Of Financial Condition
And Results Of Operation .................................... 12
Item 3. Quantitative and Qualitative Disclosures About Market Risk... 15
Item 4. Controls And Procedures ..................................... 15
PART II - OTHER INFORMATION
Item 1. Legal Proceedings ........................................... 15
Item 2. Unregistered Sales Of Equity Securities And Use Of Proceeds.. 15
Item 3. Defaults Upon Senior Securities ............................. 15
Item 4. Mine Safety Disclosures ..................................... 15
Item 5. Other Information ........................................... 15
Item 6. Exhibits .................................................... 16
2
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
INDEX TO FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEETS...................................... 4
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS ........................... 5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS ........................... 6
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS .................. 7
3
Peer to Peer Network
(Formerly "Psychic Friends Network, Inc.")
CONSOLIDATED CONDENSED BALANCE SHEETS
December 31, September 30,
2014 2014
------------ ------------
(unaudited)
ASSETS
Current assets
Cash $ 12 $ 2,644
Accounts receivable 72 125
Equity securities available for sale 46 229
------------ ------------
Total current assets 130 2,998
Investment in securities, at cost 73,000 70,000
Intangible assets
Website development costs (net of $64,492 and $57,300
of accumulated amortization, respectively) 19,943 27,136
------------ ------------
Total Assets $ 93,073 $ 100,134
============ ============
LIABILITIES
Current Liabilities
Accounts payable and accrued liabilities $ 101,427 $ 88,087
Accrued salaries to an officer 53,250 11,250
Convertible notes payable, net of discount of $4,782 and $18,504, respectively 38,218 34,496
------------ ------------
Total current liabilities 192,895 133,833
------------ ------------
Total Liabilities 192,895 133,833
------------ ------------
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock; 750,000,000 shares authorized at $0.001 par value;
90,900,620 and 88,977,543 issued and outstanding at December 31, 2014
and September 30, 2014, respectively 90,901 88,978
Common stock payable 177,000 171,000
Additional paid-in capital 1,009,289 1,001,212
Accumulated other comprehensive loss (814) (631)
Accumulated deficit (1,376,198) (1,294,258)
------------ ------------
Total stockholders' equity (deficit) (99,822) (33,699)
------------ ------------
Total liabilities and stockholders' equity (deficit) $ 93,073 $ 100,134
============ ============
The accompanying notes are an integral part of these
condensed consolidated financial statements.
4
Peer to Peer Network
(Formerly "Psychic Friends Network, Inc.")
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(unaudited)
For the Three Months Ended
-----------------------------------
December 31, December 31,
2014 2013
------------ ------------
REVENUE $ -- $ 1,529
------------ ------------
OPERATING EXPENSES
Payroll expenses 54,158 37,908
Depreciation and amortization 7,193 7,193
General and administrative 4,039 9,487
Consulting fees -- 26,663
Legal and professional 1,000 1,364
------------ ------------
TOTAL OPERATING EXPENSES 66,390 82,615
------------ ------------
NET LOSS FROM OPERATIONS (66,390) (81,086)
OTHER EXPENSE (INCOME)
Interest expense 15,550 --
------------ ------------
TOTAL OTHER EXPENSE 15,550 --
------------ ------------
NET LOSS BEFORE INCOME TAXES (81,940) (81,086)
PROVISION FOR INCOME TAX -- --
------------ ------------
NET LOSS FOR THE PERIOD $ (81,940) $ (81,086)
============ ============
OTHER COMPREHENSIVE INCOME (LOSS)
Unrealized losses on equity investments 183 --
------------ ------------
COMPREHENSIVE LOSS $ (82,123) $ (81,086)
============ ============
BASIC AND DILUTED (LOSS) PER COMMON SHARE $ (0.00) $ (0.00)
============ ============
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
(BASIC AND DILUTED) 89,750,954 84,921,239
============ ============
The accompanying notes are an integral part of these
condensed consolidated financial statements.
5
Peer to Peer Network
(Formerly "Psychic Friends Network, Inc.")
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(unaudited)
For the Three Months Ended
---------------------------------
December 31, December 31,
2014 2013
---------- ----------
OPERATING ACTIVITIES
Net loss $ (81,940) $ (81,086)
Adjustments to reconcile net loss from operations:
Stock-based compensation for options issued -- 7,543
Amortization expense 7,193 7,193
Common stock issued for services -- 2,870
Amortization of debt discount 13,722 --
Change in operating assets and liabilities:
Decrease (increase) in accounts receivable 53 (818)
Increase in accounts payable to a related party 42,000 --
Increase in accrued interest 1,828 --
Increase in accounts payable and accrued liabilities 11,512 1,572
---------- ----------
NET CASH USED IN OPERATING ACTIVITIES (5,632) (62,726)
---------- ----------
INVESTING ACTIVITIES
Purchase of investment in securities, at cost (3,000) --
---------- ----------
NET CASH USED IN INVESTING ACTIVITIES (3,000) --
---------- ----------
FINANCING ACTIVITIES
Proceeds from cash subscriptions payable 6,000 --
---------- ----------
NET CASH PROVIDED BY FINANCING ACTIVITIES 6,000 --
---------- ----------
NET (DECREASE) IN CASH AND CASH EQUIVALENTS (2,632) (62,726)
CASH AND CASH EQUIVALENTS
-BEGINNING OF PERIOD 2,644 75,393
---------- ----------
CASH AND CASH EQUIVALENTS
-END OF PERIOD $ 12 $ 12,667
========== ==========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest $ -- $ --
========== ==========
Cash paid for taxes $ -- $ --
========== ==========
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Common stock issued to in exchange for note payable $ 10,000 $ --
========== ==========
The accompanying notes are an integral part of these
condensed consolidated financial statements.
6
Peer to Peer Network
(Formerly "Psychic Friends Network, Inc.")
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2014 and 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.
Certain information or footnote disclosures normally included in financial
statements prepared in accordance with accounting principles generally accepted
in the United States of America have been condensed or omitted, pursuant to the
rules and regulations of the Securities and Exchange Commission for interim
financial reporting. Accordingly, they do not include all the information and
footnotes necessary for a comprehensive presentation of financial position,
results of operations, or cash flows. It is management's opinion, however, that
all material adjustments (consisting of normal recurring adjustments) have been
made which are necessary for a fair financial statement presentation. The
interim results for the three months ended December 31, 2014 are not necessarily
indicative of results for the full fiscal year. It is suggested that these
financial statements be read in conjunction with the audited financial
statements and notes thereto included in the Company's annual report on Form
10-K for the year ended September 30, 2014.
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 December 31, 2014, the Company
has accumulated losses from inception (May 9, 2007) of $1,376,198. 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.
7
Peer to Peer Network
(Formerly "Psychic Friends Network, Inc.")
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2014 and 2013
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:
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
The fair value of the Company's financial instruments, consisting of cash and
accounts payable and accrued liabilities, is equal to fair value due to their
short-term to maturity. Unless otherwise noted, it is management's opinion that
the Company is not exposed to significant interest, currency or credit risks
arising from these financial instruments.
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
three months ended December 31, 2014 and 2013, the Company recognized revenues
of $-0- and $1,529, respectively for which each of the four aforementioned
criteria were satisfied.
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
8
Peer to Peer Network
(Formerly "Psychic Friends Network, Inc.")
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2014 and 2013
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED)
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 December 31, 2014 and 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
three months ended December 31, 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
7) that totaled $70,000 and $0 at September 30, 2014 and 2013. During the period
ended December 31, 2014, the Company invested an additional $3,000 in the cost
method investment for a total of $73,000. 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
December 31, 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 $-0- during the three months
ended December 31, 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 $7,193 and $7,193
for the three months ended December, 2014 and 2013, respectively.
ADVERTISING COSTS
Advertising costs are to be expensed as incurred in accordance to Company
policy; for the three ended December31, 2014 and 2013, advertising expenses
totaled $693 and $-0-, respectively.
RECENT ACCOUNTING PRONOUNCEMENTS
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.
9
Peer to Peer Network
(Formerly "Psychic Friends Network, Inc.")
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2014 and 2013
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
------ ------------ ------ --------------
December 31, 2014:
Capitalized website
development costs $ 84,436 $(64,493) $ 19,943 0.71 years
-------- -------- -------- ----------
Total $ 84,436 $(64,493) $ 19,943 0.71 years
======== ======== ======== ==========
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 three months ended
December 30, 2014 Shares Amount Gain (Loss)
----------------- ------ ------ -----------
Shares held, September 30, 2014 9,143 $ 229 $ --
Unrealized loss, December 31, 2014 -- (183) (183)
----- ----- -----
Balance, December 31, 2014 9,143 $ 46 $(183)
===== ===== =====
NOTE 5 - CONVERTIBLE NOTE PAYABLE
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
beneficial conversion feature discount of $38,379 calculated on this note. As of
December, 2014, $33,597 in debt discount has been recorded as interest expense
leaving a remainder of $4,782. As of December 31, 2014 there is was a total of
$4,874 in accrued interest assessed on this note of which $1,828 was expensed
during the three months ended December 31, 2014. On November 24, 2014, the note
holder exercised their conversion rights and converted $10,000 of the note
payable into 1,923,077 shares of common stock (see Note 6). As part of this
transaction the proportional remaining debt discount of $2,069 related to this
conversion was expensed.
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.
COMMON STOCK
On November 24, 2014 a convertible note holder converted $10,000 into 1,923,077
shares of common stock at a price of $0.0052 per share (see Note 5).
10
Peer to Peer Network
(Formerly "Psychic Friends Network, Inc.")
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2014 and 2013
NOTE 6 - STOCKHOLDERS' EQUITY (DEFICIT) - (CONTINUED)
COMMON STOCK SUBSCRIPTIONS PAYABLE
On November 19, 2014 the Company received $6,000 in exchange for 300,000 in
common stock subscriptions payable valued at $0.02 per share. These shares will
be issued in conjunction with the total capital raise of $500,000 and the
pending merger with 321 Lend.
NOTE 7 - SUBSEQUENT EVENTS
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 December 31, 2014, $177,000 of the $500,000 had been raised (see Note 6).
Furthermore, the Company has acquired securities of 321 Lend, Inc in the amount
of $73,000 as of December 31, 2014, which is presented in the balance sheet as
"Investment in securities, at cost"
On January 27, 2017 the Company issued 200,000 shares of common stock at $0.005
per share or $1,000 in exchange for services rendered.
On February 2, 2015 a convertible note holder converted $10,105 into 5,318,421
shares of common stock at a price of $0.0019 per share.
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.
11
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION
This report 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 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 report references to "we", "our", "us", "the Company", and
similar terms refer to Peer to Peer Network.
OVERVIEW
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.
12
Our assets include the Psychic Friends Network ("PFN"), and upon closing
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
The Company entered 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
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.
RESULTS OF OPERATIONS
The following discussion of the financial condition and results of operations
should be read in conjunction with the unaudited interim 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.
13
FOR THE THREE MONTHS ENDED DECEMBER 31, 2014 VERSUS 2013:
REVENUE
We generated $0 in revenue for the three months ended December 31, 2014 compared
to $1,529 during the same period in 2013. The Company commenced commercial
operations as of September 30, 2013 however we do not anticipate earning
significant revenues until such time that we have sufficient capital to market
our services.
OPERATING EXPENSES
During the three months ended December 31, 2014, total operating expenses for
the Company were $66,390 compared to $82,615 during the same period in 2013. The
decrease in expenses was due to the higher expense incurred in the 2014 period
for consulting services
NET LOSS
Our net loss for the three months ended December 31, 2014 was $81,940 compared
to $81,086 during the same period in 2013. As we have incurred no substantial
revenues, the net loss figures follow our operating expenses.
LIQUIDITY AND CAPITAL RESOURCES
As of December 31, 2014, we have yet to generate any material revenues from our
business operations as our website, while operational, has yet to be marketed.
As of December 31, 2014, we had $12 in cash and $93,073 in total assets, of
which $19,943 is attributed to website development and $73,000 is attributed to
our investment in acquiring 321Lend. Our total liabilities were $192,895.
The Company believes it currently does not have sufficient funds to execute its
business plan. We anticipate that additional capital will be required to
implement our business plan to pay for marketing efforts to support revenue for
2015. In order to obtain the necessary capital, the Company 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.
OFF BALANCE SHEET ARRANGEMENTS
None.
CRITICAL ACCOUNTING POLICIES
See Note 2 "Significant Accounting Policies" within the notes to our financial
statements.
14
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
ITEM 4. CONTROLS AND PROCEDURES
(A) EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
We maintain disclosure controls and procedures that are designed to ensure that
information required to be disclosed in our reports filed under the Securities
Exchange Act of 1934, as amended, is recorded, processed, summarized and
reported within the time periods specified in the Securities and Exchange
Commission's rules and forms, and that such information is accumulated and
communicated to our management, including our Chief Executive Officer (our
principal executive officer, principal financial officer and principle
accounting officer) to allow for timely decisions regarding required disclosure.
As of the end of the quarter covered by this report, we carried out an
evaluation, under the supervision and with the participation of our Chief
Executive Officer, of the effectiveness of the design and operation of our
disclosure controls and procedures. Based on that evaluation, our management,
including our Chief Executive Officer have concluded that, as of the end of the
period covered by this report, our disclosure controls and procedures are not
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 Officer, as appropriate to allow timely decisions regarding
required disclosure.
(B) CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There were no significant changes in the Company's internal control over
financial reporting during the quarter ended December 31, 2014.
PART II--OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We are not currently a party to any legal proceedings nor are we aware of any
threatened proceedings against us.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
N/A
ITEM 5. OTHER INFORMATION
None.
15
ITEM 6. EXHIBITS
Exhibit
Number Description
------ -----------
31 Certification of Principal Executive Officer and Principal Financial
Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32 Certification of Principal Executive Officer and Principal Financial
Officer pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
101 Interactive data files pursuant to Rule 405 of Regulation S-T.
16
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
PEER TO PEER NETWORK
Date: February 17, 2015 By: /s/ Marc Lasky
-------------------------------------------
Marc Lasky
Chief Executive and Financial Officer
(Principal Executive Officer, and
Principal Financial and Accounting Officer)
1
