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

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Nevada

45-4798356

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

Large accelerated filer

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Accelerated filer

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Non-accelerated filer

¨

Smaller reporting company

x

(Do not check if a smaller reporting company)

TABLE OF CONTENTS

PART 1 – FINANCIAL INFORMATION

Item 1.

Consolidated Financial Statements (Unaudited)

3

Item 2.

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

14

Item 3.

Quantitative and Qualitative Disclosure About Market Risk

17

Item 4.

Controls and Procedures

17

PART II – OTHER INFORMATION

Item 1.

Legal Proceedings

18

Item 1A.

Risk Factors

18

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

18

Item 3.

Defaults Upon Senior Securities

18

Item 5.

Other Information

18

Item 6.

Exhibits

19

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1.

OUTLOOK

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. The Company has limited resources and operating history. As shown in the accompanying financial statements, as of December 31, 2014 the Company has an accumulated deficit of approximately $5,687,000 and has negative working capital of approximately $5,538,000. The future of the Company is dependent upon its ability to obtain financing and upon future profitable operations from the development of new business opportunities.

Management has plans to seek additional capital through private placements and public offerings of its common stock. There can be no assurance that the Company will be successful in accomplishing its objectives. Without such additional capital, the Company may be required to cease operations.

These conditions raise substantial doubt about the Company's ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence.

2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation - The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All material intercompany transactions and balances have been eliminated in consolidation.

Concentrations of Sales to Certain Customers – During the three month and nine month period ended December 31, 2014, the Company had sales to one customer that accounted for approximately 13% of total revenue.

3.

ACQUISTION OF YOU EVERYWHERE NOW, LLC

On October 3, 2014, the Company’s wholly-owned subsidiary, The Pulse Network, Inc., a Massachusetts corporation (Pulse Massachusetts) acquired a 100% membership interest in You Everywhere Now, LLC, a California limited liability company (“You Everywhere Now”) from MikeKoenigs.com Inc. (seller). You Everywhere Now, in turn, holds 100% of the membership interests of VoiceFollowUp, LLC, a California limited liability company, and Traffic Geyser, LLC, a California limited liability company. Closing of the transaction under the Securities Purchase Agreement was conditioned upon closing and funding under the senior secured revolving credit facility agreement with TCA Global Credit Master Fund, LP as described in note 9.

The Company paid consideration to the seller comprised of a promissory note payable to the seller in the amount of $1,250,000 and cash of $1,047,560. The Company assumed liabilities of the seller totaling $244,450. The Company allocated the purchase price to intangible assets with a fair value of $1,738,750, accounts receivable of $29,127 and leasehold improvements of $30,000. The excess of the consideration paid over the fair value of the assets acquired totaling $744,133 has been recorded as goodwill on the Company’s balance sheet at December 31, 2014. The Company has estimated the useful lives of the various identifiable intangible assets acquired to be between two and fifteen years. Intangible assets at December 31, 2014 and March 31, 2014 consist of the following:

$

$

The Company incurred direct cost related to the acquisition of You Everywhere Now totaling $212,967 which is reported in the Company’s statement of operations for the three and nine month periods ended December 31, 2014 as acquisition related expenses.

4.

PROPERTYAND EQUIPMENT

Property and equipment at December 31, 2014 and March 31, 2014 consists of the following:

5.

RELATED PARTY TRANSACTIONS

Advances from stockholder at December 31, 2014 and March 31, 2014, respectively, consists of non-interest bearing advances of $71,397 and $244,637 from Stephen Saber. These advances have no set repayment terms.

Note payable related party consists of two loans from John C. Saber, the father of the three majority stockholders. Under the terms of the first note agreement dated January 23, 2013 the Company borrowed $50,000 repayable in twenty-four monthly principal and interest installments of $2,150 through maturity in January 2015. This note accrues interest at 3.042% per annum. The unpaid balance of this note is $2,145 and $19,107 at December 31, 2014 and March 31, 2014, respectively. Under the terms of the second note agreement dated May 15, 2014 the Company borrowed $100,000 repayable in monthly principal and interest installments of $4,614 through maturity in May 2016. This note accrues interest at 10% per annum. The unpaid balance of this note at December 31, 2014 is $72,861.

Related party loan at December 31, 2014 consists of loans previously due to Stephen Saber in the amount of $111,500 and Nicholas C. Saber in the amount of $10,000, which was transferred to CrossTech Partners, LLC. Stephen, Nicholas and John Saber own 100% of Crosstech Partners, LLC. The loan bears interest at 6.5% and matures with all unpaid principal and interest due on September 3, 2015.

Note payable – stockholders consists of a note dated September 3, 2013 under the terms of which the Company borrowed $110,100 from Saber Insurance Trust, of which the three majority stockholders are primary beneficiaries. The loan terms state repayment of the loan was to be paid in full by June 1, 2014 including interest at 8.6% per annum. The revised repayment terms state the loan is due in full by June 1, 2015 including interest at 8.6% per annum. The Company received net proceeds of $103,000 reflecting a discount in the amount of $7,100 representing the interest to be earned over the term of the note. The discount is being amortized through a charge to interest expense using the interest method. As of June 30, 2014 the discount amount of $7,100 has been amortized in full.

Advances from affiliate consists of $196,000 and $0 at December 31, 2014 and March 31, 2014, respectively, from Crosstech Partners, LLC with no stated repayment terms.

The Company leased its office space under a non-cancelable lease agreement with a related party which expired July 15, 2014. Total rent expense, including common area, maintenance, taxes, insurance and utilities was $0 and $27,090 for the three month period ended December 31, 2014 and 2013 respectively, and $25,578 and $81,270 for the nine month ended December 31, 2014 and 2013, respectively.

On February 4, 2014, the Company entered into a new non-cancelable 10 year lease agreement with a related party (32.5% of which is beneficially owned by Stephen Saber and Nicholas Saber, two of our officers and directors) with a commencement date of May 1, 2014. The new space is located at 10 Oceana Way, Norwood, Massachusetts and has approximately 10,000 square feet of leased space. Future minimum rent payments under this agreement are $120,000 for the twelve month period ending December 31, 2015. For each of the years ending March 31, 2016 through 2024, the minimum rent payment will be $120,000 and $20,000 for the year ending March 31, 2025. Total rent expense, including common area, maintenance, taxes, insurance and utilities was $34,525 and $0 for the three month period ended December 31, 2014 and 2013 respectively, and $64,309 and $0 for the nine month period ended December 31, 2014 and 2013, respectively.

6.

ACCRUED COMPENSATION

Accrued compensation at December 31, 2014 includes $1,074,541 of amounts due to the three officers and directors payable under the terms of their employment agreements.

7.

DEFERRED COMPENSATION

In September 2004 the Company entered into a deferred compensation arrangement with a former stockholder. Under the terms of the arrangement, beginning in January 2005, the former stockholder receives semi-monthly payments of $4,167 through December 2024. The amount included on the Company’s balance sheets at December 31, 2014 and March 31, 2014 represents the net present value of the remaining payments calculated using a discount rate of 5%. The amount of deferred compensation expected to be paid within twelve months of the balance sheet date is classified as a current liability with the remainder classified as non-current. Future maturities of this obligation are as follows:

8.

NOTE PAYABLE - BANK

Note payable – bank consisted of a revolving line of credit with Boston Private Bank & Trust Company. Under the terms of the agreement the Company could borrow up to $150,000 and interest accrued at the bank’s base rate plus 1% of the outstanding balance. This loan agreement expired on September 30, 2014. This loan was repaid in full on October 6, 2014 with proceeds from the TCA Global Credit financing described in note 9.

9.

REVOLVING LOAN

On October 6, 2014, the Company borrowed $2,400,000 from TCA Global Credit Master Fund, LP (the “Lender”) pursuant to the terms of a Senior Secured Revolving Credit Facility Agreement, dated September 30, 2014 (the “Credit Agreement”), among the Company, as borrower, and certain of its subsidiaries (the “Subsidiary Guarantors”) as joint and several guarantors, and the Lender. The funds have been and will be used for general corporate purposes, including repayment of certain obligations of the Company. Under the Credit Agreement, the Company may borrow an amount equal to the lesser of 80% of the amount in a certain Lock Box Account (as defined in the Credit Agreement) and the revolving loan commitment, which initially is $1,400,000. The Company may request that the revolving loan commitment be raised by various specified amounts at specified times, up to a maximum of $5,000,000. In each case, the decision to grant any such increase in the revolving loan commitment is at the Lender’s sole discretion. The loan matures on the earlier of March 30, 2015, subject to a six-month extension at the request of the Company, or upon 60 days written notice by the Lender. The Company may prepay the Revolving Loan (as defined in the Credit Agreement), without penalty, provided it is repaid more than 180 days prior to maturity date. If Company prepays more than eighty percent (80%) of the Revolving Loan Commitment within 9 days following the effective date, there is a prepayment penalty equal to 2.5% of the Revolving Loan Commitment (as defined in the Credit Agreement).

The loan bears interest at the rate of 11% per annum, and the Company will pay certain fees, as set forth in the Credit Agreement. In addition, the Company paid an additional advisory fee of $450,000 to Lender as of December 31, 2014.

On October 30, 2014, the Company issued to the Lender 4,500,000 shares of redeemable common stock in payment of the advisory fee as stated in the credit agreement. The lender could require the Company to redeem these share for an amount up to $450,000 one year from the effective date of the agreement. On December 16, 2014 the Company and the lender entered into the first amendment to the credit agreement under which the available borrowing amount was increased and the original advisory fee in the amount of $450,000 was added to the outstanding loan amount with the lender and the shares issued on October 30, 2014 were deemed to be in settlement of a new advisory fee in the amount of $225,000. Under the terms of the amendment these shares are redeemable at the option of the lender for an amount up to $225,000 as defined in the agreement. As the redemption option is outside the control of the Company the redemption value of these shares has been recorded in temporary equity on the Company’s balance sheet at December 31, 2014. Including to the advisory fee described above the Company incurred fees totaling $896,350 in order to obtain this debt financing. These fees are being amortized to consulting fees expense over the initial term of the credit agreement which is six months. At December 31, 2014 net deferred financing costs of $448,175 are included on the balance sheet and $448,175 has been included in general and administrative expense for the three and nine month periods ended December 31, 2014.

The balance of the credit loan agreement is $2,770,987 at December 31, 2014.

10.

ACCOUNTS RECEIVABLE PURCHASE AGREEMENTS

On April 15, 2014, the Company entered into an accounts receivable purchase agreement with Super G Funding, LLC (Super G). Under this agreement the Company received $250,000 in exchange for accounts receivable of the Company totaling $315,000. This agreement is secured by a security interest in substantially all assets of the Company subordinate to the security interest held by Boston Private Bank. The note requires the Company to make daily payments of $1,676 as the accounts receivable sold under the agreement are collected until such time as the full amount has been collected. The Company is accounting for this transaction as if it were short term note payable. Although the terms of the agreement appear to indicate this is a factoring arrangement without recourse, Financial Accounting Standards Board Accounting Standard Codification (ASC) section 860-10-40-5 “Transfers and Servicing of Financial Assets – DE recognition” states that for such a transaction to be considered a transfer certain criteria must be met. The first of these criteria is the transferred financial assets have been isolated from the transferor, put presumptively beyond the reach of the transferor and its creditors, even in bankruptcy or other receivership. Transferred financial assets are isolated in bankruptcy or other receivership only if the transferred financial assets would be beyond the reach of the powers of a bankruptcy trustee or other receiver for the transferor or any of its consolidated affiliates included in the financial statements being presented.  As such the Super G agreement does not appear to result in “isolation of transferred financial assets beyond the reach of the transferor and its creditors.” On December 16, 2014 the balance of this accounts receivable purchase agreement including all interest was paid in full.

On July 7, 2014, Company entered into a second accounts receivable purchase agreement with Super G under substantially the same terms as the first. This agreement requires the Company to make daily payments of $1,676 as the accounts receivable sold under the agreement are collected until such time as the full amount has been collected. On December 16, 2014 the balance of this accounts receivable purchase agreement including all interest was paid in full.

11.

NOTE PAYABLE-OTHER

The company received a $50,000 loan on July 26, 2012 in financing related to an exchange agreement which was terminated. The interest rate is 12% per annum. The principle balance of the note has been paid in full as of September 30, 2014. Accrued interest of $10,000 is included in accounts payable and is past due as of December 31, 2014.

12.

CONVERITBLE NOTE PAYABLE

On December 13, 2013 the Company issued a convertible promissory note. The Purchaser of the note advanced the Company $52,500 in principle net of $2,500 of expense incurred by the purchaser. The note accrued interest at 10% per annum and was due and payable 12 months from the date of issuance. The note was convertible beginning 90 days from issuance at a 37.5% discount to the Volume Weighted Average Price (VWAP) of the common stock for the 10 trading days immediately prior to the conversion date, or the VWAP on the issuance date. The Company determined there was a beneficial conversion feature of $31,500 as of December 31, 2013 based on the intrinsic value of the beneficial conversion feature as calculated using the VWAP on the issuance date of the note. The value of the beneficial conversion feature has been recorded as a discount to the note on the balance sheet at December 31, 2013 and was being amortized using the interest method through the earliest conversion date. This convertible note was repaid in full on July 7, 2014.

On February 6, 2014 the Company entered into a convertible promissory note agreement with a maximum borrowing limit of $335,000. The purchaser of the note advanced the Company $60,000 net of a 10% original issue discount upon closing of this note. The full principle amount and any unpaid interest was due in full on February 6, 2016. Upon issuance of the note the Company determined there was a beneficial conversion feature with an intrinsic value of $59,659. The note was convertible as of the effective date of the agreement and therefore the entire discount related to the beneficial conversion feature had been charged to interest expense during the year ended March 31, 2014. This convertible note was repaid in full on August 25, 2014.

13.

CONVERTIBLE DEBENTURE

On April 29, 2014, the Company issued a non-interest bearing convertible debenture. The purchaser of the debenture advanced the Company $175,000 in principle due three years from the issuance date. At any time the purchaser may convert the amount outstanding at a conversion rate equal to 65% of the second lowest closing bid price of the Company’s common stock for the 20 trading days immediately preceding the date of conversion of the debenture. The Company determined there was a beneficial conversion feature with an intrinsic value of $77,405 as of June 30, 2014. The debenture is convertible as of the effective date of the agreement and therefore the entire discount related to the beneficial conversion feature has been recorded in additional paid-in capital and charged to interest expense during the quarter ended June 30, 2014. The Company has also issued 500,000 shares of common stock with an aggregate fair value of $32,000 to the purchaser in connection with this agreement which is included in general and administrative expenses in the statement of operations.

On November 4, 2014, the purchaser elected to convert $35,000 of the principle amount into 2,153,846 shares of the Company’s common stock. The balance of the convertible debenture at December 31, 2014 is $140,000. On January 27, 2015 the purchaser elected to convert $20,000 of the principle amount into 4,615,384 shares of the Company’s common stock.

14.

CAPITAL LEASE OBLIGATIONS

The Company leases certain equipment under capital leases expiring in various years through 2018. The net book value of assets held under capital leases at December 31, 2014 and March 31, 2014 is $30,119 and $43,325 respectively. The annual repayments of capital lease obligations at December 31, 2014 are as follows:

15.

CLIENT FUNDS PASS THROUGH LIABILITY

The Company collects and receives funds from attendees who register for our clients’ upcoming events. Per the terms of the contracts, the Company remits the balance of funds collected to its clients at 30 and 45 days post event. The Company client funds pass through liability at December 31, 2014 and March 31, 2014 is $27,288 and $397,559 respectively.

16.

STOCKHOLDERS’ EQUITY

On April 29, 2014 the Company issued 500,000 shares of its common stock with an aggregate fair value of $32,000 to the purchaser in connection with the agreement in note 13.

On October 15, 2014 the Company also agreed to issue 3,000,000 shares of its common stock as an advisory fee to an agent for its services related to the credit loan agreement. The fair value of these shares was $.02 per share on October 15, 2014. The Company has recorded accrued expenses of $60,000 as of December 31, 2014. This amount is included in the deferred financing costs.

As described in note 9 the Company issued 4,500,000 redeemable common shares to TCA Global Credit Master Fund, LP in payment of advisory fees as defined in the credit agreement. These shares had a fair value of $225,000 on the date of issuance and that value is guaranteed by the Company under the terms of the agreement.

On November 4, 2014 the Company issued 2,153,846 shares of its common stock with a fair value of $0.02 per share on the issuance date to the holder of its outstanding convertible debenture upon election of the holder of the debenture to convert an amount representing outstanding principle of $35,000. See note 13.

On November 22, 2014 the Company issued 2,033,333 shares of its common stock with a fair value on the issuance date of $.03 per share to a consultant for services provided under an agency and broker fee agreement. The Company recorded an expense of $61,000 as a result of the issuance of these shares.

17.

STOCK-BASED COMPENSATION

Outstanding, October 1, 2014

1,775,000

$

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Granted

-

$

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Exercised

-

$

-

Forfeited or expired

)

$

0.17

Outstanding, December 31, 2014

1,740,000

$

0.17

18.

COMMITMENTS AND CONTINGENCIES

Employment agreements – On April 1, 2013 the Company entered into employment agreements with three of its executive stockholders. Each of these agreements has a five year term beginning April 1, 2013 and ending on April 1, 2018. Unless otherwise terminated each of these agreements shall annually extend for one additional year beginning on the second anniversary date of each agreement. Compensation under these agreements is as follows.

Stephen Saber, chief executive officer of the Company is to receive an annual base salary of $350,000 and a monthly bonus equal to 1.5% of all monthly net revenues of the Company. The bonus is to be paid within fifteen days of the end of each month. If the executive is terminated other than for cause, the executive is entitled to an amount equal to the executive’s annual base salary in effect at the time of termination.

Nicholas Saber, president of the Company is to receive an annual base salary of $275,000 and a monthly bonus equal to 1.5% of all monthly net revenues of the Company. The bonus is to be paid within fifteen days of the end of each month. If the executive is terminated other than for cause, the executive is entitled to an amount equal to the executive’s annual base salary in effect at the time of termination.

John Saber, chief information officer of the Company is to receive an annual base salary of $225,000 and a monthly bonus equal to 1.5% of all monthly net revenues of the Company. The bonus is to be paid within fifteen days of the end of each month. If the executive is terminated other than for cause, the executive is entitled to an amount equal to the executive’s annual base salary in effect at the time of termination.

Effective January 1, 2014, amendments were approved to the existing employment agreements with its three officers and directors: Stephen Saber, Nicholas Saber and John Saber.

The amendments to the individual agreements provide for an initial base salary, commencing January 1, 2014, of $250,000 for Stephen Saber, $200,000 for Nicholas Saber, and $200,000 for John Saber. The amendment has removed the provision to automatically increase the officers’ base salaries 7% on April 1 of each year. The amendment also removed providing bonus compensation equal to 1.5% of all monthly net revenues of the Company.

Effective September 26, 2014, amendment No. 2 was approved to the existing employment agreements with its three officers and directors: Stephen Saber, Nicholas Saber and John Saber.

Amendment No. 2 to the individual agreements provide for an initial base salary, commencing September 16, 2014, of $350,000 for Stephen Saber, $275,000 for Nicholas Saber, and $225,000 for John Saber. Amendment No. 2 automatically increases the officers’ base salaries 7% on April 1 of each year. Amendment No. 2 also provides bonus compensation equal to 1.5% of all monthly net revenues of the Company.

Office Lease Agreement – On October 6, 2014, with the acquisition of You Everywhere Now, LLC., the Company has new office space located at 591 Camino De La Reina, San Diego, CA. The sublease expires on March 31, 2018. Future minimum rent payments under this agreement are $76,113 for the twelve month period ending December 31, 2015. For the year ending March 31, 2016, the minimum rent payment is $76,869, $79,943 for the year ending March 31, 2017, and $83,141 for the year ending March 31, 2018. Total rent expense, including common area, maintenance, taxes, insurance and utilities was $14,015 and $0 for the three and nine month period ended December 31, 2014 and 2013 respectively.

19.

SUBSEQUENT EVENTS

On January 27, 2015, $20,000 of the principle amount of debenture was converted into 4,615,384 shares of common stock.

Management of the Company has evaluated subsequent events through the date these financial statements were issued and determined there are no other subsequent events that require disclosure.

·

Revenues earned from usage of the Pulse Network Platform for management and support of client events or conferences.

·

Revenues earned by providing ongoing development and support for client content and digital marketing programs.

Exhibit

Description

2.1

Share Exchange Agreement, dated March 29, 2013, by and among the Registrant, The Pulse Network, Inc., a Massachusetts corporation (“The Pulse Network”), and the holders of common stock of The Pulse Network. (2)

2.2

Form of Articles of Share Exchange (2)

3.1.1

Form of Articles of Incorporation (1)

3.1.2

Form of Certificate of Amendment to Articles of Incorporation (2)

3.1.3

Form of Certificate of Change (2)

3.1.4

Form of Certificate of Designation for Series A Preferred Stock (2)

3.1.5

Form of Certificate of Designation for Series B Preferred Stock (2)

3.1.6

Form of Amendment to Certificate of Designation for Series B Preferred Stock (2)

3.1.7

Bylaws (1)

4.1

2013 Stock Option Plan (2)

10.1

Lease Agreement dated April 2005, by and between Canton Realty Associates Limited Partnership and The Pulse Network, Inc., a Massachusetts corporation (then named, Exgenex, Inc.) (2)

10.2

Amendment of Lease dated June 2005 by and between Canton Realty Associates Limited Partnership and The Pulse Network, Inc., a Massachusetts corporation (then named, Exgenex, Inc.) (2)

10.3

Second Amendment of Lease dated July 1, 2006 by and between Canton Realty Associates Limited Partnership and The Pulse Network, Inc., a Massachusetts corporation (then named, Exgenex, Inc.) (2)

10.4

Employment Agreement dated March 29, 2013, by and between the Registrant and Stephen Saber (2)

10.5

Employment Agreement dated March 29, 2013, by and between the Registrant and Nicholas Saber (2)

10.6

Employment Agreement dated March 29, 2013, by and between the Registrant and John Saber (2)

10.7

Stock Redemption Agreement dated March 29, 2013 by and between the Registrant and Mohamed Ayad (2)

31.1

Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2

Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1

Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS *

XBRL Instance Document

101.SCH *

XBRL Taxonomy Extension Schema Document

101.CAL *

XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF *

XBRL Taxonomy Extension Definition Linkbase Document

101.LAB *

XBRL Taxonomy Extension Label Linkbase Document

101.PRE *

XBRL Taxonomy Extension Presentation Linkbase Document

*

XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

(1)

Filed and incorporated by reference to the Company’s Registration Statement on Form S-1 (File No. 333-174443), as filed with the Securities and Exchange Commission on May 24, 2011.

(2)

Filed and incorporated by reference to the Company’s Current Report on Form 8-K (File No. 000-54741), as filed with the Securities and Exchange Commission on March 29, 2013.

The Pulse Network, Inc.

Date: February 17, 2015

By:

/s/ Stephen Saber

Stephen Saber

Chief Executive Officer

(Principal Executive Officer)