UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

 

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

 

For the quarterly period ended June 30, 2018

 

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

 

For the transition period from __________ to __________

 

Commission File Number: 333-205944

 

LINGERIE FIGHTING CHAMPIONSHIPS, INC.

(Exact name of Registrant as specified in its charter)

 

Nevada		20-8009362
(State or other jurisdiction of incorporation of organization)		(I.R.S. Employer Identification No.)

 

6955 North Durango Drive

Suite 1115-129

Las Vegas, NV 89149

(Address of principal executive offices)

 

(702) 527-2942

(Registrant’s telephone number, including area code)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

 

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

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	o	Smaller reporting company	x
		Emerging growth company	o

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

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

 

As of August 31, 2018 there were 665,925,639 shares of common stock issued and outstanding.

 

 

LINGERIE FIGHTING CHAMPIONSHIPS, INC.

FORM 10-Q

June 30, 2018

 

TABLE OF CONTENTS

 

			Page No.
PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements		3
	Balance Sheets as of June 30, 2018 and December 31, 2017 (Unaudited)		3
	Unaudited Statements of Operations for the Three Months Ended June 30, 2018 and 2017		4
	Unaudited Statements of Cash Flows for the Three Months Ended June 30, 2018 and 2017		5
	Notes to Unaudited Financial Statements.		6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.		17
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.		26
Item 4.	Controls and Procedures.		26
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings		27
Item 1A.	Risk Factors		27
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		27
Item 3.	Defaults upon Senior Securities		27
Item 4.	Mine Safety Disclosures		27
Item 5.	Other Information		27
Item 6.	Exhibits.		28

 

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PART I. - FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

LINGERIE FIGHTING CHAMPIONSHIPS, INC.

BALANCE SHEETS

 

		June 30,				December 31,
		2018				2017
ASSETS
Current Assets
Cash and cash equivalents		$	892			$	28,438
Total Current Assets			892				28,438
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current Liabilities
Accounts payable and accrued liabilities		$	23,113			$	5,625
Accounts payable - related party			169,380				119,680
Accrued interest payable			120,380				70,049
Stock payable			30,000				30,000
Convertible notes, net of $62,105 and $90,718 debt discount, respectively			523,253				426,678
Derivative liability			1,509,951				1,831,630
Total Current Liabilities			2,376,077				2,483,662
STOCKHOLDERS’ DEFICIT
Preferred stock, par value $0.001 per share, 10,000,000 shares authorized, 51 and 51 shares issued and outstanding, respectively			-				-
Common stock, par value $0.001 per share, 5,000,000,000 shares authorized, 665,925,639 and 576,193,639 shares issued and outstanding, respectively			665,926				576,194
Additional paid-in capital			466,286				525,366
Accumulated deficit			(3,507,397	)			(3,556,784	)
Total stockholders’ deficit			(2,375,185	)			(2,455,224	)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT		$	892			$	28,438

 

See notes to unaudited financial statements

 

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LINGERIE FIGHTING CHAMPIONSHIPS, INC.

STATEMENTS OF OPERATIONS

 

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2018				2017				2018				2017
Revenue		$	1,821			$	9,550			$	3,539			$	9,550
Cost of Services			1,420				6,150				21,720				26,830
GROSS PROFIT (LOSS)			401				3,400				(18,181	)			(17,280	)
OPERATING EXPENSES
Selling, general and administrative expenses			48,776				58,563				126,552				125,550
Stock based compensation			-				-				-				30,000
Total Operating Expenses			48,776				58,563				126,552				155,550
OTHER INCOME (EXPENSES)
Interest expense			(75,133	)			(90,373	)			(139,375	)			(202,968	)
Gain on derivative liabilities			1,603,779				97,191				333,495				264,214
Total other income (expenses)		$	1,528,646			$	6,818			$	194,120			$	61,246
OPERATING INCOME (LOSS)			1,480,271				(48,345	)			49,387				(111,584	)
NET INCOME (LOSS)		$	1,480,271			$	(48,345	)		$	49,387			$	(111,584	)
Basic Earnings (Loss) per Common Share		$	0.00			$	(0.00	)		$	0.00			$	(0.00	)
Diluted Earnings (Loss) per Common Share		$	0.00			$	(0.00	)		$	0.00			$	(0.00	)
Basic Weighted Average Common Shares Outstanding			665,925,639				305,541,153				628,705,342				239,461,074
Diluted Weighted Average Common Shares Outstanding			6,006,984,575				593,144,576				5,969,764,279				527,064,496

 

See notes to unaudited financial statements

 

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LINGERIE FIGHTING CHAMPIONSHIPS, INC.

STATEMENTS OF CASH FLOWS

 

		Six Months Ended
		June 30,
		2018				2017
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)		$	49,387			$	(111,584	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock - based compensation			-				30,000
Gain on derivative liability			(333,495	)			(264,214	)
Amortization of debt discount			88,613				177,525
Changes in operating assets and liabilities:
Accounts payable - related party			49,700				42,000
Accounts payable and accrued liabilities			17,918				1,900
Accrued interest payable			50,331				22,942
Net cash used in operating activities			(77,546	)			(101,431	)
CASH FLOWS FROM INVESTING ACTIVITIES			-				-
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from convertible debt			50,000				45,000
Net cash provided by financing activities			50,000				45,000
Net decrease in cash and cash equivalents			(27,546	)			(56,431	)
Cash and cash equivalents - beginning of period			28,438				57,630
Cash and cash equivalents - end of period		$	892			$	1,199
Supplemental Cash Flow Disclosures
Cash paid for interest		$	-			$	-
Cash paid for income taxes		$	-			$	-
NON CASH INVESTING AND FINANCING ACTIVITIES
Debt discount from derivative liability		$	60,000			$	45,000
Derivative reclass to APIC due to conversion		$	1,338			$	107,100
Common shares issued for conversion of debt and accrued interest		$	29,314			$	89,378

 

See notes to unaudited financial statements

 

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LINGERIE FIGHTING CHAMPIONSHIPS, INC.

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2018

(Unaudited)

 

NOTE 1 – ORGANIZATION AND NATURE OF BUSINESS

 

(a) Organization

 

Lingerie Fighting Championships, Inc. (the “Company”) is a Nevada corporation incorporated on November 29, 2006 under the name Sparking Events, Inc. The Company’s corporate name was changed to Xodtec Group USA, Inc. in June 2009, Xodtec LED, Inc. in May 2010, Cala Energy Corp. in September 2013 and Lingerie Fighting Championships, Inc. on April 1, 2015.

 

NOTE 2 – BASIS OF PRESENTATION AND ACCOUNTING POLICIES

 

The accompanying unaudited interim financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and are presented in accordance with the requirements of Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, these interim financial statements do not include all of the information and notes required by GAAP for complete financial statements. These interim financial statements should be read in conjunction with the financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six months ended June 30, 2018 are not necessarily indicative of the results that may be expected any other interim period or for the year ending December 31, 2018. At June 30, 2018 and December 31, 2017, the Company had no subsidiaries.

 

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 the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company continually evaluates its estimates and judgments. The Company bases its estimates and judgments on historical experience and other factors that it believes to be reasonable under the circumstances. Materially different results can occur as circumstances change and additional information becomes known, even for estimates and judgments that are not deemed critical.

 

Cash and Cash Equivalents

 

The Company considers all highly liquid investments with the original maturities of three months or less to be cash equivalents. The Company had $892 and $28,438 in cash and cash equivalents as at June 30, 2018 and December 31, 2017, respectively.

 

Revenue Recognition

 

The Company recognizes revenue from the sale of products and services in accordance with ASC 606,”Revenue Recognition” following the five steps procedure:

 

Step 1: Identify the contract(s) with customers

Step 2: Identify the performance obligations in the contract

Step 3: Determine the transaction price

Step 4: Allocate the transaction price to performance obligations

Step 5: Recognize revenue when the entity satisfies a performance obligation

 

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The Company recognizes revenue when it satisfies its obligation by transferring control of the good or service to the customer. A performance obligation is satisfied over time if one of the following criteria are met:

 

	a.	the customer simultaneously receives and consumes the benefits as the entity performs;
	b.	the entity’s performance creates or enhances an asset that the customer controls as the asset is created or enhanced; or
	c.	the entity’s performance does not create an asset with an alternative use to the entity, and the entity has an enforceable right to payment for performance completed to date.

 

Earnings (Loss) per Share

 

The Company computes basic and diluted net loss per share amounts in accordance with ASC Topic 260, “Earnings per Share.” Basic loss per share is computed by dividing net income (loss) available to common shareholders by the weighted average number of common shares outstanding during the reporting period. Diluted loss per share reflects the potential dilution that could occur if convertible notes to issue common stock were converted resulting in the issuance of common stock that could share in the loss of the Company.

 

Six months and Three months ended June 30, 2018

 

For the six months and three months ended June 30, 2018, 5,341,058,936 shares of common stock from the convertible notes were included in the calculation of diluted earnings per shares.

 

The following is a reconciliation of the numerator and denominator used for the computation of basic and diluted earnings per common shares:

 

Basic earnings per common share

 

		Three months ended				Six months ended
		June 30 2018				June 30 2018
Net Income		$	1,480,271			$	49,387
Basic Weighted Average Common Shares Outstanding			665,925,639				628,705,342
Basic Earnings per Common Share		$	0.00			$	0.00

 

Diluted earnings per common share

 

		Three months ended				Six months ended
		June 30 2017				June 30 2017
Net Income		$	1,480,271			$	49,387
Diluted Weighted Average Common Shares Outstanding			6,006,984,575				5,969,764,279
Diluted Earnings per Common Share		$	0.00			$	0.00

 

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Six months and Three months ended June 30, 2017

 

For the six months and three months ended June 30, 2017, convertible notes were included in the calculation of diluted loss per share under if-converted method as gain on dilutive liabilities exceeds the interest expense from the convertible notes.

 

The following is a reconciliation of the numerator and denominator used for the computation of basic and diluted loss per common share for the six months and three months ended June 30, 2017:

 

Basic loss per common share

 

		Three months ended				Six months ended
		June 30 2017				June 30 2017
Net Loss		$	(48,345	)		$	(111,584	)
Basic Weighted Average Common Shares Outstanding			305,541,153				239,461,074
Basic Loss per Common Share		$	(0.00	)		$	(0.00	)

 

Diluted loss per common share

 

		Three months ended				Six months ended
		June 30 2017				June 30 2017
Net Loss		$	(48,345	)		$	(111,584	)
add: Interest Expense			90,373				202,968
less: Gain on derivative liabilities			(97,191	)			(264,214	)
Adjusted Net Loss		$	(55,163	)		$	(172,830	)
Diluted Weighted Average Common Shares Outstanding			593,144,576				527,064,496
Diluted Loss per Common Share		$	(0.00	)		$	(0.00	)

 

Related Party Balances and Transactions

 

The Company follows FASB ASC 850, “Related Party Disclosures,” for the identification of related parties and disclosure of related party transaction.

 

Beneficial Conversion Feature of Convertible Debt

 

The Company accounts for convertible debt in accordance with the guidelines established by FASB ASC 470-20, “Debt with Conversion and Other Options”. The Beneficial Conversion Feature (“BCF”) of convertible debt is normally characterized as the convertible portion or feature of certain debt that provide a rate of conversion that is below market value or in-the-money when issued. The Company records a BCF related to the issuance of convertible debt when issued, and also records the estimated fair value. Beneficial Conversion Features that are contingent upon the occurrence of a future event are recorded when the event is resolved.

 

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Convertible Instruments and Derivatives

 

The Company evaluates and account for conversion options embedded in convertible instruments in accordance with ASC 815 “Derivatives and Hedging Activities.”

 

Share-Based Compensation

 

The Company measures the cost of services received in exchange for an award of an equity instrument based on the grant-date fair value of the award. Employee awards are accounted for under ASC 718 - where the awards are valued at grant date. Awards given to nonemployees are accounted for under ASC 505 where the awards are valued at earlier of commitment date or completion of services. Compensation cost for employee awards is recognized over the vesting or requisite service period. The Black-Scholes option-pricing model is used to estimate the fair value of options or warrants granted.

 

For the six months ended June 30, 2018 and June 30, 2017, the stock based compensation was $0 and $30,000, respectively.

 

Fair Value Measurement

 

The Company adopted the provisions of ASC Topic 820, “Fair Value Measurements and Disclosures,” which defines fair value as used in numerous accounting pronouncements, establishes a framework for measuring fair value and expands disclosure of fair value measurements.

 

The estimated fair value of certain financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued expenses are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments. The carrying amounts of our short and long term credit obligations approximate fair value because the effective yields on these obligations, which include contractual interest rates taken together with other features such as concurrent issuances of warrants and/or embedded conversion options, are comparable to rates of returns for instruments of similar credit risk.

 

ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value:

 

Level 1 –	quoted prices in active markets for identical assets or liabilities
Level 2 –	quoted prices for similar assets and liabilities in active markets or inputs that are observable
Level 3 –	inputs that are unobservable (for example cash flow modeling inputs based on assumptions)

 

The derivative liability in connection with the conversion feature of the convertible debt, classified as a level 3 liability, is the only financial liability measured at fair value on a recurring basis.

 

The change in the level 3 financial instrument is as follows:

 

Balance - December 31, 2017		$	1,831,630
Reduction of derivative liabilities from conversion of convertible note to common shares			(29,314	)
Addition of new derivative liabilities upon issuance of convertible notes as debt discount			50,000
Addition of new derivatives liabilities recognized as day one loss			311,773
Gain on change in fair value of the derivative			(654,138	)
Balance - June 30, 2018		$	1,509,951

 

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The following table summarizes fair value measurement by level at June 30, 2018 and December 31, 2017, measured at fair value on a recurring basis:

 

June 30, 2018		Level 1				Level 2				Level 3				Total
Assets
None			-				-				-				-
Liabilities
Derivative liabilities			-				-				1,509,951				1,509,951

 

December 31, 2017		Level 1				Level 2				Level 3				Total
Assets
None			-				-				-				-
Liabilities
Derivative liabilities			-				-				1,831,630				1,831,630

 

NOTE 3 – GOING CONCERN

 

The accompanying financial statements have been prepared in conformity with GAAP, which contemplate continuation of the Company as a going concern. The Company has generated nominal revenues since inception, has sustained losses since its organization and requires funding to generate revenue. These conditions raise substantial doubt as to the Company’s ability to continue as a going concern.

 

Management anticipates that the Company will be dependent, for the near future, on additional investment capital to fund operating expenses. The Company can give no assurances that it can or will become financially viable and continue as a going concern.

 

NOTE 4 – STOCKHOLDERS DEFICIT

 

Preferred Stock

 

The authorized preferred stock consists of 10,000,000 shares with a par value $0.001 per share. The board of directors has broad discretion in setting the rights, preferences and privileges of one or more series of preferred stock.

 

On September 3, 2016, the Company issued 51 Series A preferred shares to the chief Executive Officer. The Series A preferred shares have voting rights, resulting in the Series A stockholder holding in aggregate approximately 51% of the total voting power of all issued and outstanding voting capital of the Company. The valuation of the preferred shares was completed by the Company based on the change in voting percentage rights before and after the Series A shares were issued. The value of the Series A shares is $42,669 and was expensed.

 

There were 51 and 51 preferred shares issued and outstanding as at June 30, 2018 and December 31, 2017.

 

Common Stock

 

The Company has authorized 5,000,000,000 shares with a par value $0.001 per share.

 

During the six months ended June 30, 2018, the Company issued 89,132,000 common shares for conversion of debt and accrued interest in the amount of $1,337.

 

During the years ended December 31, 2017, the Company issued 488,517,204 common shares for conversion of debt and accrued interest in the amount of $119,392.

 

As of June 30, 2018 and December 31, 2017, the common shares issued and outstanding was 665,925,639 and 576,193,639, respectively.

 

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Common shares issued for compensation

 

During the year ended December 31, 2016, the Company issued 2,250,000 common shares with a fair value of $174,000 for services rendered. The shares were valued at market price when the shares were issued.

 

As of June 30, 2018, the Company recorded stock payable for 300,000 outstanding common shares of $30,000 not yet issued to the consultant for service performed.

 

NOTE 5 – NOTES PAYABLE

 

The Company had the following unsecured notes payable as at June 30, 2018 and December 31, 2017:

 

		June 30, 2018				December 31, 2017
Convertible Promissory Note to Crown Bridge		$	-			$	2,404
Convertible Promissory Notes to Auctus Fund			237,522				179,172
Convertible Promissory Notes to EMA Financial			130,316				89,686
Convertible Promissory Notes to Black Bridge Capital			100,000				100,000
Convertible Promissory Notes to Tangiers			23,801				23,801
Convertible Promissory Notes to Denali			31,615				31,615
Total Convertible Debt		$	523,253			$	426,678

 

Promissory Note Payable to Crown Bridge Partners

 

On February 23, 2018, EMA Financial LLC and Auctus Fund, LLC each made repayment to Crown Bridge Partners, LLC on behalf of the Company at $5,636.04, totaling $11,272.08 to settle the total outstanding principal and accrued penalty amount at $11,272.08 of the $40,000 convertible note originally issued to Crown Bridge Partners, LLC on April 1, 2016.

 

Promissory Notes Payable to Auctus Fund

 

Auctus #1

 

On May 20, 2016, the Company entered into an agreement to issue a convertible promissory note to an unrelated party for an amount of $67,750 with a $7,750 original issue discount. The convertible promissory note bears interest at 10% per annum and matures nine months from issue date. The conversion price is 50% of the lowest trading price 25 days prior to conversion. The note was discounted for a derivative and the discount of $60,000 is being amortized over the life of the note using the effective interest method resulting in $0 and $14,542 of interest expense for the six months ended June 30, 2018 and December 31, 2017, respectively.

 

During the year ended December 31, 2017, principal of $15,278 and accrued interest of $5,975 were converted for 111,460,000 common shares.

 

During the six months ended June 30, 2018, accrued interest of $432 were converted for 28,782,000 common shares.

 

As of June 30, 2018, the note is presented net of a debt discount of $0.

 

The note is currently in default.

 

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Auctus #2

 

On September 20, 2016, the Company entered into an agreement to issue a convertible promissory note to an unrelated party for an amount of $56,750 with a $6,750 original issue discount. The convertible promissory note bears interest at 10% per annum and matures nine months from issue date. The conversion price is 50% of the lowest trading price 25 days prior to conversion. The note was discounted for a derivative and the discount of $50,000 is being amortized over the life of the note using the effective interest method resulting in $0 and $35,607 of interest expense for the six months ended June 30, 2018 and year ended December 31, 2017, respectively.

 

On July 7, 2017, note amendment was executed with $20,000 increase in principal of the note and the note principle increased to $76,750. The Company received $20,000 cash proceeds from the note amendment on the same date.

 

As of June 30, 2018, the notes are presented net of a debt discount of $0.

 

The note is currently in default.

 

Auctus #3

 

On January 13, 2017, the Company entered into an agreement with Power Up Lending Group to issue a convertible promissory note of $45,000 with a $2,500 original issue discount to the unrelated party, which bears interest at 8% of the principal amount. The promissory note matures on January 13, 2018. The conversion price shall be equal to 57.5% of the lowest trading price of the Company’s common stock during the 20 consecutive trading days prior to the date on which the unrelated party elects to convert all or part of the note. The note was discounted for a derivative and the discount of $45,000 is being amortized over the life of the note using the effective interest method. Total of $0 and $40,843 of the discount was recorded as interest expense for the six months ended June 30, 2018 and the year ended December 31, 2017.

 

During the year ended December 31, 2017, principal of $6,700 was converted for 30,455,486 common shares.

 

On June 14, 2017, the Company entered into an agreement with Power Up Lending Group to issue a convertible promissory note of $7,500 to the unrelated party, which bears interest at 12% of the principal amount. The promissory note matured on March 20, 2018. The conversion price shall be equal to 50% of the lowest trading price of the Company’s common stock during the 20 consecutive trading days prior to the date on which the unrelated party elects to convert all or part of the note. The note was discounted for a derivative and the discount of $7,500 is being amortized over the life of the note using the effective interest method. Total of $0 and $4,462 of the discount was recorded as interest expense for the six months ended June 30, 2018 and the year ended December 31, 2017.

 

On November 27, 2017, Auctus Fund, LLC entered into an agreement with Power Up Lending Group Ltd. to buy out the total outstanding principal amount and accrued interest of the two convertible promissory notes at $50,774.54. The note bears interest at 12% of the principal amount and matured on March 20, 2018. The conversion price shall be equal 57.5% of the lowest trading price of the Company’s common stock during the 20 consecutive trading days prior to the date on which the unrelated party elects to convert all or part of the note. During the six months ended June 30, 2018 and the year ended December 31, 2017, interest expense of $5,030 and $2,165 was recorded over the remaining note discount transferred the two convertible notes of $7,195.

 

As of June 30, 2018, the note is presented net of a debt discount of $0.

 

The note is currently in default.

 

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Auctus #4

 

On November 2, 2017, the Company entered into an agreement to issue a convertible promissory note of $53,000 to the unrelated party, which bears interest at 12% of the principal amount. The promissory note matures on August 2, 2018. The conversion price shall be equal to 50% of the lowest trading price of the Company’s common stock during the 25 consecutive trading days prior to the date on which the unrelated party elects to convert all or part of the note. The note was discounted for a derivative and the discount of $53,000 is being amortized over the life of the note using the effective interest method. Total of $35,139 and $11,454 of the discount was recorded as interest expense for the six months ended June 30, 2018 and the year ended December 31, 2017.

 

On February 23, 2018, EMA Financial LLC and Auctus Fund, LLC each made repayment to Crown Bridge Partners, LLC on behalf of the Company at $5,636.04, totaling $11,272.08 to settle the total outstanding principal and accrued penalty amount at $11,272.08 of the $40,000 convertible note originally issued to Crown Bridge Partners, LLC on April 1, 2016.

 

As of June 30, 2018, the note principal was amended to 58,636.04.

 

As of June 30, 2018, the note is presented net of a debt discount of $6,407.

 

Auctus #5

 

On March 7, 2018, the Company entered into an agreement to issue a convertible promissory note to an unrelated party for an amount of $30,000 with a $5,000 original issue discount. The convertible promissory note bears interest at 12% per annum and matures nine months from issue date. The conversion price is 50% of the lowest trading price 25 days prior to conversion. The note was discounted for a derivative and the discount of $30,000 is being amortized over the life of the note using the effective interest method resulting in $12,545 of interest expense for the six months ended June 30, 2018.

 

As of June 30, 2018, the note is presented net of a debt discount of $17,455.

 

Promissory Note Payable to EMA Financial, LLC

 

EMA#1

 

On September 7, 2016, the Company entered into an agreement to issue a convertible promissory note to an unrelated party for an amount of $35,000 with a $5,250 original issue discount. The convertible promissory note bears interest at 10% per annum and matures twelve months from issue date. The conversion price is 50% of the lowest trading price 25 days prior to conversion. The note was discounted for a derivative and the discount of $29,750 is being amortized over the life of the note using the effective interest method resulting in $0 and $21,774 of interest expense for the six months ended June 30, 2018 and the year ended December 31, 2017, respectively.

 

During the year ended December 31, 2017, principal of $7,538 were converted for 123,242,000 common shares.

 

During the six months ended June 30, 2018, principal of $905 were converted for 60,350,000 common shares.

 

As of June 30, 2018, the note is presented net of a debt discount of $0.

 

The note is currently in default.

 

EMA#2

 

On November 3, 2016, the Company entered into an agreement with Blackbridge Capital Growth Funds, LLC to issue a convertible promissory note to an unrelated party for an amount of $60,000. The convertible promissory note bears interest at 8% per annum and matures on November 3, 2017. The conversion price is 50% of the lowest trading price 20 days prior to conversion. The note was discounted for a derivative and the discount of $60,000 is being amortized over the life of the note using the effective interest method resulting in $0 and $50,465 of interest expense for the six months ended June 30, 2018 and the year ended December 31, 2017, respectively.

 

During the year ended December 31, 2017, principal of $10,810 were converted for 65,000,000 common shares.

 

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On September 27 2017, EMA Financial, LLC entered into an agreement with Blackbridge Capital Growth Funds, LLC to buy out the outstanding principal amount and accrued interest of the convertible promissory note at $53,367.22. The note bears interest at 8% of the principal amount and matures on November 3, 2017. The conversion price shall be equal to 57.5% of the lowest trading price of the Company’s common stock during the 20 consecutive trading days prior to the date on which the unrelated party elects to convert all or part of the note.

 

As of June 30, 2018, the notes are presented net of a debt discount of $0.

 

The note is currently in default.

 

EMA#3

 

On October 31, 2017, the Company entered into an agreement to issue a convertible promissory note of $53,000 to the unrelated party, which bears interest at 12% of the principal amount. The promissory note matures on October 31, 2018. The conversion price shall be equal to 50% of the lowest trading price of the Company’s common stock during the 25 consecutive trading days prior to the date on which the unrelated party elects to convert all or part of the note. The note was discounted for a derivative and the discount of $53,000 is being amortized over the life of the note using the effective interest method. Total of $26,282 and $8,858 of the discount was recorded as interest expense for the six months ended June 30, 2018 and the year ended December 31, 2017, respectively.

 

As of June 30, 2018, the note is presented net of a debt discount of $17,860.

 

EMA#4

 

On March 5, 2018, the Company entered into an agreement to issue a convertible promissory note to an unrelated party for an amount of $30,000 with a $5,000 original issue discount. The convertible promissory note bears interest at 12% per annum and matures twelve months from issue date. The conversion price is 50% of the lowest trading price 25 days prior to conversion. The note was discounted for a derivative and the discount of $30,000 is being amortized over the life of the note using the effective interest method resulting in $9,616 of interest expense for the six months ended June 30, 2018.

 

As of June 30, 2018, the note is presented net of a debt discount of $20,384.

 

Promissory Note Payable to Blackbridge Capital Growth Fund, LLC

 

Commitment Note

 

On November 3, 2016, the Company entered into an investment agreement with Blackridge Capital Growth Fund, LLC. Per the investment agreement, the investor will invest up to $2,000,000 to purchase the Company’s common stock, par value of $.001 per share.

 

The Company issued a convertible promissory note for $100,000, as a commitment fee, which bears interest at 8% of the principle amount and matures on November 3, 2017. The commitment fee expense of $100,000 was recognized on November 3, 2016. The conversion price is equal to 57.5% of the lowest trading price during the 20 days prior to the conversion.

 

On November 3, 2016, a derivative debt discount of $100,000 was recorded. For the year ended December 31, 2017, an amount of $100,000 was amortized into interest expense in relation to the debt discount.

 

As of June 30, 21018, the notes are presented net of a debt discount of $0.

 

The note is currently in default.

 

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Commitment Note Payable to Tangiers

 

On April 4, 2016, the Company entered into an investment agreement with an unrelated party. Per the investment agreement, the investor will invest up to $5,000,000 to purchase the Company’s common stock, par value of $.001 per share. In connection with the investment agreement, the Company entered into a registration rights agreement with the unrelated party which has been filed with the SEC. The maximum investment amount is equal to one hundred percent of the average of the daily trading volume of the common stock for the ten days prior to the put notice entered into by the unrelated party. The total purchase price to be paid in connection with the put notice, is calculated at eighteen percent discount of the lowest trading price of the common stock during the five consecutive trading days immediately succeeding the put notice date.

 

The Company issued a promissory note to the unrelated party for $100,000, as a commitment fee, which bears interest at 10% of the principle amount and matures seven months from April 4, 2016 with a possible extension to ten months based on whether the Company executes the related investment agreement within 180 days from April 4, 2016. If the registration statement is declared effective within 90 days of the execution of the investment agreement, the Company and the unrelated party agree the principal balance of the note will be immediately reduced by $40,000. The note payable will be available to be converted upon default. Per the agreement, default could occur based on: failure of payment on any outstanding amounts longer than five days after the due date, failure to issue shares after request, or failure to comply with all of the other material provisions included in the agreement. The conversion price is equal to the lower of: (a) 90% of the lowest trading price of the Company’s common stock during the 25 consecutive trading days prior to the date on which the unrelated party elects to convert all or part of the note, or (b) 90% of the lowest trading price of the Company’s common stock during the 25 consecutive trading days prior to the effective date of April 4, 2016. At the election of the unrelated party, at each closing date (as defined in the investment agreement) after the date which is six months after April 4, 2016, the unrelated party shall retain (or the Company shall pay to the unrelated party) an amount equal to ten percent of each Put Amount (as defined in the agreement), and the amounts shall be applied by the unrelated party as follows: first against the amount of any unpaid interest or other fees, and second against any unpaid principal amounts, until all interest, fees, and principal have been paid.

 

On April 28, 2016, the Company filed a registration statement with the Securities and Exchange Commission to register 3,500,000 shares of common stock pursuant to the Investment Agreement and the Registration Rights Agreement. On May 24, 2016, the Company received a comment letter from the Securities and Exchange Commission regarding the registration statement. On March 3, 2017, the Company voluntarily withdrew the registration statement.

 

The Company expensed the $100,000 as commitment fee during the year ended December 31, 2016.

 

The note was discounted for a derivative and the discount of $65,238 is fully amortized into interest expense for the year ended December 31, 2016. As of March 31, 2018, the note is presented net of a debt discount of $0.

 

On January 10, 2017, the Company entered into an Assignment Agreement that Denali acquired $50,000 of the $100,000 note held by Tangiers. As at January 10, 2017, $50,000 of principal remained with Tangiers.

 

During the year ended December 31, 2017, principal of $26,199 was converted for 49,905,893 common shares.

 

The note is currently in default.

 

Notes Payable to Denali

 

On January 10, 2017, the Company entered into an Assignment Agreement that Denali acquired $50,000 of the $100,000 note held by Tangiers.

 

During the year ended December 31, 2017, principal of $18,385 was converted for 9,884,409 common shares.

 

As of June 30, 2018, the note principal balance was $31,615.

 

The note is currently in default.

 

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Accrued interest on convertible notes

 

During the six months ended June 30, 2018 and June 30, 2017, interest expense of $50,331 and $22,942 was incurred on convertible notes, respectively. As of June 30, 2018 and December 31, 2017, accrued interest payable on convertible notes was $120,380 and $70,049, respectively.

 

Summary of Conversions

 

During the six months ended June 30, 2018, $905 principal amount of the convertible note and $432 accrued interest was converted for 89,132,000 common shares.

 

During the year ended December 31, 2017, $111,542 principal amount of the convertible note and $7,850 accrued interest was converted for 488,517,204 common shares.

 

NOTE 6 – DERIVATIVE LIABILITY

 

The Company analyzed the conversion options for derivative accounting consideration under ASC 815, Derivatives and Hedging, and hedging, and determined that the instrument should be classified as a liability when the conversion option becomes effective

 

The following table summarizes the derivative liabilities included in the balance sheet at June 30, 2018:

 

Balance - December 31, 2017		$	1,831,630
Reduction of derivative liabilities from conversion of convertible note to common shares			(29,314	)
Addition of new derivative liabilities upon issuance of convertible notes as debt discount			50,000
Addition of new derivatives liabilities recognized as day one loss			311,773
Gain on change in fair value of the derivative			(654,138	)
Balance - June 30, 2018		$	1,509,951

 

The following table summarizes the loss on derivative liability included in the income statement for the six months ended June 30, 2018 and 2017, respectively.

 

		Six months ended
		June 30,				June 30,
		2018				2017
Day one loss due to derivative liabilities on convertible notes		$	(320,641	)		$	(45,283	)
Gain on change in fair value of derivative liabilities			654,136				309,497
Gain on change in fair value of derivative liabilities		$	333,495			$	264,214

 

The table below shows the Black-Scholes option-pricing model inputs used by the Company to value the derivative liability at each measurement date:

 

		Six months ended
		June 30,				June 30,
		2018				2017
Expected term		0.34 - 0.68 years				0.19 - 0.54 years
Expected average volatility		272% - 440		%		266% - 312		%
Expected dividend yield			-				-
Risk-free interest rate		1.39% - 2.33		%		0.94% - 1.14		%

 

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NOTE 7 – RELATED PARTY TRANSACTIONS

 

During the six months ended June 30, 2018, the Company accrued $60,000 of salary payable to the Director of the Company, and paid $9,520 owing to him for the accrued salaries.

 

During the year ended December 31, 2017, the Company accrued $120,000 of salary payable to the Director of the Company, and paid $24,600 owing to him for the accrued salaries.

 

During the year ended December 31, 2017, the Director of the Company advanced $780 to the Company. The amount is unsecured and non-interest bearing with no set terms of repayment. During the six months ended June 30, 2018, the Company repaid $780 to the Director.

 

As of June 30, 2018 and December 31, 2017, amount due to related parties was $169,380 and $119,680, respectively.

 

NOTE 8 – SUBSEQUENT EVENTS

 

Subsequent to June 30, 2018 and through the date that these financials were made available, the Company had the following subsequent events:

 

On July 2, 2018, the Company entered into an agreement with Auctus Fund, LLC to issue a convertible promissory note of $43,500 to the unrelated party, which bears interest at 12% of the principal amount. The promissory note matures on April 2, 2019. The conversion price shall be equal to the lesser of (i) 50% multiplied by the lowest Trading Price during the previous twenty-five Trading Day period ending on the latest complete Trading Day prior to the date of this Note and (ii) the Variable Conversion Price, that is 50% multiplied by the Market Price, being the lowest Trading Price for the Common Stock during the twenty-five Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. In conjunction with the convertible note, the Company issued warrants to purchase 72,500,000 shares of common stock, exercisable for five years from issuance at $0.0003 per share.

 

On July 2, 2018, the Company entered into an agreement with EMA Financial, LLC to issue a convertible promissory note of $43,500 to the unrelated party, which bears interest at 12% of the principal amount. The promissory note matures on April 2, 2019. The conversion price shall be equal to the lesser of (i) 50% multiplied by the lowest Trading Price during the previous twenty-five Trading Day period ending on the latest complete Trading Day prior to the date of this Note and (ii) the Variable Conversion Price, that is 50% multiplied by the Market Price, being the lowest Trading Price for the Common Stock during the twenty-five Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. In conjunction with the convertible note, the Company issued warrants to purchase 72,500,000 shares of common stock, exercisable for five years from issuance at $0.0003 per share.

 

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

This quarterly report on Form 10-Q and other reports filed by Lingerie Fighting Championships, Inc. (“Lingerie”, “we” or the “Company”) from time to time with the SEC (collectively, the “Filings”) contain or may contain forward-looking statements and information that are based upon beliefs of, and information currently available to, the Company’s management as well as estimates and assumptions made by Company’s management. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. When used in the Filings, the words “anticipate,” “believe,” “estimate,” “expect,” “future,” “intend,” “plan,” or the negative of these terms and similar expressions as they relate to the Company or the Company’s management identify forward-looking statements. Such statements reflect the current view of the Company with respect to future events and are subject to risks, uncertainties, assumptions, and other factors, including the risks relating to the Company’s business, industry, and the Company’s operations and results of operations. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended, or planned.

 

Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee future results, levels of activity, performance, or achievements. Except as required by applicable law, including the securities laws of the United States, the Company does not intend to update any of the forward-looking statements to conform these statements to actual results.

 

Our financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). These accounting principles require us to make certain estimates, judgments and assumptions. We believe that the estimates, judgments and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments and assumptions are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities as of the date of the financial statements as well as the reported amounts of revenues and expenses during the periods presented. Our financial statements would be affected to the extent there are material differences between these estimates and actual results. In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP and does not require management’s judgment in its application. There are also areas in which management’s judgment in selecting any available alternative would not produce a materially different result. The following discussion should be read in conjunction with our financial statements and notes thereto appearing elsewhere in this report.

 

Business Overview

 

We were incorporated in Nevada on November 29, 2006 under the name Sparking Events, Inc., and on September 16, 2013 our corporate name was changed to Cala Energy Corp., (formally, Xodtec LED, Inc.) under which we were engaged in the business of offering services, such as enhanced oil recovery and material supplies, to gas and oil fields predominantly located in Southeast Asia. We were not successful in our efforts and discontinued this line of business. Since that time, and prior to the “Exchange Agreement” (defined below) we have been a “shell company”, as such term is defined in Rule 12b-2 of the Exchange Act.

 

On March 31, 2015, the Company, pursuant to share exchange agreement (the “Share Exchange Agreement”), among the Company, Lingerie Fighting Championships, Inc. (“LFC”), and the holders of all of the outstanding common stock and convertible notes of LFC exchanged their common stock and convertible notes of LFC for a total of 16,750,000 shares of common stock, which represented 84.70% of the Company’s common stock after giving effect to the issuance of the shares pursuant to the Share Exchange Agreement and the shares of common stock issued in the private placement described in the following paragraph. The issuance of the 16,750,000 shares of common stock to the former holders of LFC’s common stock and convertible notes in exchange for the capital stock of LFC is referred to as the reverse acquisition transaction. The sole director and chief executive officer of LFC became a director and the chief executive officer of the Company. As a result of the reverse acquisition, the Company’s business has become the business of LFC.

 

On March 31, 2015, contemporaneously with the closing pursuant to the Share Exchange Agreement, the Company issued 2,500,000 shares of common stock for a purchase price of $0.08 per share, for a total of $200,000. The proceeds from the private placement were held in escrow on March 31, 2015, and were paid to the Company on April 2, 2015. Accordingly, on March 31, 2015, the proceeds from the private placement are reflected as a subscription receivable. None of the purchasers in the private placement are affiliates of the Company.

 

As a result of the reverse acquisition with LFC, we ceased to be a shell company on March 31, 2015.

 

Effective as of April 1, 2015, we changed our name to “Lingerie Fighting Championships, Inc.” a name which more accurately represents our new business. We effected the name change by virtue of a short form merger, pursuant to which LFC (our wholly owned subsidiary after the LFC Acquisition) merged with and into the Company, with the Company remaining as the surviving parent corporation. In connection with the name change, we submitted to FINRA a voluntary request for the change of our OTC trading symbol. Our Common Stock now trades under the symbol “BOTY”.

 

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As a result of, and in connection with, the reverse acquisition, the Company changed its fiscal year to December 31, which was LFC’s fiscal year, from a fiscal year ending February 28.

 

On April 20, 2015, the Company effected a one-for-800 reverse split, pursuant to which each share of common stock was converted into, and became 1/800 of a share of common stock, with fractional shares being rounded up to the next higher whole number of shares. As a result of the reverse split, the 339,757,357 shares of common stock, then outstanding, became and were converted into 424,977 shares. All references to shares of common stock and per share information retroactively reflect the reverse split.

 

On September 14, 2016, Lingerie Fighting Championships, Inc., a Nevada Corporation (the “Company”) filed an amendment to its articles of incorporation (the “Amendment”) with the Secretary of State of the State of Nevada, which, among other things, established the designation, powers, rights, privileges, preferences and restrictions of the Series A Preferred Stock, $0.001 par value per share (the “Series A Preferred Stock”).

 

Among other provisions, each one (1) share of the Series A Preferred Stock shall have voting rights equal to (x) 0.019607 multiplied by the total issued and outstanding shares of common stock of the Company eligible to vote at the time of the respective vote (the “Numerator”), divided by (y) 0.49, minus (z) the Numerator. For purposes of illustration only, if the total issued and outstanding shares of common stock of the Company eligible to vote at the time of the respective vote is 5,000,000, the voting rights of one share of the Series A Preferred Stock shall be equal to 102,036 (0.019607 x 5,000,000) / 0.49) – (0.019607 x 5,000,000) = 102,036).

 

Fifty-one (51) shares of Series A Preferred Stock were authorized and fifty-one (51) shares of Series A Preferred Stock were issued to Shaun Donnelly, the Company’s Chief Executive Officer and a director of the Company.

 

On November 22, 2016, the Company filed a Certificate of Amendment to the Company’s Articles of Incorporation (the “Amendment”) with the Secretary of State of Nevada to increase the number of authorized shares of common stock, par value $0.001 per share, from four hundred million (400,000,000) shares to one billion (1,000,000,000) shares.

 

On January 23, 2017, the Company filed a Certificate of Amendment to the Company’s Articles of Incorporation (the “Amendment”) with the Secretary of State of Nevada to increase the number of authorized shares of common stock, par value $0.001 per share, from one billion (1,000,000,000) shares to one billion two hundred million (1,200,000,000) shares.

 

We do not have a principal office. Our mailing address is 6955 North Durango, Suite 1115-129, Las Vegas, NV, 89149, telephone (702) 527-2942. Our website is www.lingeriefc.com.

 

Results of Operations

 

Three Months ended June 30, 2018 as compared to the Three Months ended June 30, 2017

 

Our operating results for the three months ended June 30, 2018 and 2017, and the changes between those periods for the respective items are summarized as follows:

 

		Three Months Ended
		June 30,
Statement of Operations Data:		2018				2017				Changes
Revenue		$	1,821			$	9,550			$	(7,729	)
Cost of Services			(1,420	)			(6,150	)			4,730
Total operating expenses			(48,776	)			(58,563	)			9,787
Other income			1,528,646				6,818				1,521,828
Net Income (loss)		$	1,480,271			$	(48,345	)		$	1,528,616

 

Revenues

 

We generated revenues of $1,821 and $9,550 for the three months ended June 30, 2018 and 2017, respectively.

 

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Cost of Services

 

We incurred total cost of services of $1,420 and $6,150 for the three months ended June 30, 2018 and 2017, respectively. The cost of services incurred consist of labor, material, equipment and subcontractor expenses.

 

Operating Expenses

 

We incurred total operating expenses of $48,776 and $58,563 for the three months ended June 30, 2018 and 2017, respectively. The decrease in operating expenses was primarily due to the decrease in travel expense and professional fees.

 

Other Expenses

 

We incurred total other income of $1,528,646 and other income of $6,818 for the three months ended June 30, 2018 and 2017, respectively. The increase in other income was mainly attributed to $1,603,779 gain on of derivative liabilities from the convertible notes due to the increase in share conversion price during the three months ended June 30, 2018, as compared to gain on derivative liabilities of $97,191 during the three months ended June 30, 2017.

 

Net Loss

 

We incurred a net income of $1,480,271 and net loss of $48,345 during the three months ended June 30, 2018 and 2017, respectively. The increase in our net income was mainly attributed to the increase in gain on derivative liabilities from the convertible notes during the three months ended June 30, 2018.

 

Six Months ended June 30, 2018 as compared to the Six Months ended June 30, 2017

 

Our operating results for the six months ended June 30, 2018 and 2017, and the changes between those periods for the respective items are summarized as follows:

 

		Six Months Ended
		June 30,
Statement of Operations Data:		2018				2017				Changes
Revenue		$	3,539			$	9,550			$	(6,011	)
Cost of Services			(21,720	)			(26,830	)			5,110
Total operating expenses			(126,552	)			(155,550	)			28,998
Other income			194,120				61,246				132,874
Net Income (loss)		$	49,387			$	(111,584	)		$	160,971

 

Revenues

 

We generated revenues of $3,593and $9,550 for the six months ended June 30, 2018 and 2017, respectively.

 

Cost of Services

 

We incurred total cost of services of $21,720 and $26,830 for the six months ended June 30, 2018 and 2017, respectively. The cost of services incurred consist of labor, material, equipment and subcontractor expenses.

 

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Operating Expenses

 

We incurred total operating expenses of $126,552 and $155,550 for the six months ended June 30, 2018 and 2017, respectively. The decrease in operating expenses was primarily due to the decrease in payroll expenses, finance commissions and travel expense.

 

Other Expenses

 

We incurred total other income of $194,120 and other income of $61,246 for the six months ended June 30, 2018 and 2017, respectively. The increase in other income was mainly attributed to $333,495 gain on of derivative liabilities from the convertible notes during the six months ended June 30, 2018 as compared to gain on derivative liabilities of $264,214 during the six months ended June 30, 2017. In addition, the interest expenses from the convertible note interest and amortization of note discount totaled $139,375 during the six months ended June 30, 2018 decreased by $63,593, as compared to interest expense of $202,968 during the six months ended June 30, 2017.

 

Net Loss

 

We incurred a net income of $49,387 and net loss of $111,584 during the six months ended June 30, 2018 and 2017, respectively. The increase in our net income was mainly attributed to the increase in other income due to the increase in gain on derivative liabilities and decrease in interest expense from the convertible notes during the six months ended June 30, 2018.

 

Liquidity and Capital Resources

 

		June 30,				December 31,
Balance Sheet Data:		2018				2017
Cash and cash equivalents		$	892			$	28,438
Working capital deficiency		$	(2,375,185	)		$	(2,455,224	)
Total assets		$	892			$	28,438
Total liabilities		$	2,376,077			$	2,483,662
Total stockholders’ deficit		$	(2,375,185	)		$	(2,455,224	)

 

At June 30, 2018, we had a working capital deficiency of $2,375,185 and an accumulated deficit of $3,507,397. The Company intends to fund future operations through equity financing arrangements, which may be insufficient to fund its capital expenditures, working capital and other cash requirements for the year ending December 31, 2018.

 

The ability of the Company to realize its business plan is dependent upon, among other things, obtaining additional financing to continue operations, and development of its business plan. In response to these problems, management intends to raise additional funds through public or private placement offerings.

 

These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

The following table sets forth certain information about our cash flow during the six months ended June 30, 2018 and June 30, 2017:

 

		Six Months Ended
		June 30,
Cash Flow Data:		2018				2017				Changes
Cash Flows used in Operating Activities		$	(77,546	)		$	(101,431	)		$	23,885
Cash Flows used in Investing Activities			-				-				-
Cash Flows provided by Financing Activities			50,000				45,000				5,000
Net decrease in Cash During Period		$	(27,546	)		$	(56,431	)		$	28,885

 

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Cash Flows from Operating Activities

 

We have not generated positive cash flows from operating activities.

 

During the six months ended June 30, 2018, net cash flows used in operating activities was $77,546, consisting of a net income of $49,387, increased by amortization of debt discount of $88,613, an increase in accounts payable to related party of $49,700, an increase in accounts payable and accrued liabilities of $17,918 and an increase in accrued interest payable of $50,331, and was reduced by gain on derivative liability of $333,495.

 

During the six months ended June 30, 2017, net cash flows used in operating activities was $101,431, consisting of net loss of $111,584, increased by gain on derivative liabilities of $264,214, and was reduced by stock based compensation of $30,000, amortization of debt discount of $177,525, increase in accounts payable to related party of $42,000, an increase in accounts payable and accrued liabilities of $1,900 and an increase in accrued interest payable of $22,942.

 

Cash Flows from Investing Activities

 

There was no investing activities during the six months ended June 30, 2018 and 2017.

 

Cash Flows from Financing Activities

 

During the six months ended June 30, 2018 and June 30, 2017, net cash provided by financing activities was $50,000 and $45,000 from the issuance of convertible debts, respectively.

 

Off-Balance Sheet Arrangements

 

We have no off-balance sheet arrangements.

 

Inflation

 

We do not believe that inflation has had a material effect on our results of operations.

 

Critical Accounting Policies and Estimates

 

The preparation of financial statements in conformity with generally accepted accounting principles requires management to select appropriate accounting policies and to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses.

 

Use of Estimates

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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 or revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

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Stock-Based Compensation

 

The Company recognizes compensation expense for all equity–based payments in accordance with ASC 718 “Share-based payments”. Under fair value recognition provisions, the Company recognizes equity–based compensation net of an estimated forfeiture rate and recognizes compensation cost only for those shares expected to vest over the requisite service period of the award.

 

Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the financial statements based on their fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period).

 

The Company accounts for share–based payments granted to non–employees in accordance with ASC 505, “Equity Based Payments to Non–Employees”. The Company determines the fair value of the stock–based payment as either the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. If the fair value of the equity instruments issued is used, it is measured using the stock price and other measurement assumptions as of the earlier of either (1) the date at which a commitment for performance by the counterparty to earn the equity instruments is reached, or (2) the date at which the counterparty’s performance is complete.

 

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

 

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.

 

Item 4. Controls and Procedures

 

Evaluation of Disclosure Controls and Procedures

 

As required by Rule 13a-15 under the Exchange Act, our management evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of June 30, 2018.

 

Disclosure controls and procedures refer to controls and other procedures designed to ensure that information required to be disclosed in the reports we file or submit under the Securities Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating and implementing possible controls and procedures.

 

Management conducted its evaluation of disclosure controls and procedures under the supervision of our chief executive officer and our chief financial officer. Based on that evaluation, we concluded that our disclosure controls and procedures were not effective as of June 30, 2018.

 

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PART II - OTHER INFORMATION

 

Item 1. Legal Proceedings

 

We are not currently involved in any litigation that we believe could have a materially adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our Company or any of our subsidiaries, threatened against or affecting our Company, our common stock, any of our subsidiaries or of our Company’s or our Company’s subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

 

However, from time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.

 

Item 1A. Risk Factors

 

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

There were no unregistered sales of equity securities that were not otherwise disclosed in a current report on Form 8-K.

 

Item 3. Defaults upon Senior Securities

 

Refer to the notes to the financial statements of the Company for all securities currently in default.

 

Item 4. Mine Safety Disclosures

 

Not applicable.

 

Item 5. Other information

 

Not applicable.

 

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Item 6. Exhibits

 

31.1		Certification of the Principal Executive Officer of the Registrant pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2		Certification of the Principal Financial Officer of the Registrant pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1		Certification of the Principal Executive Officer of the Registrant pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2		Certification of the Principal Financial Officer of the Registrant pursuant to 18 U.S.C. Section 1350, as adopted 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

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

	LINGERIE FIGHTING CHAMPIONSHIPS, INC.
September 11, 2018	By:	/s/ Shaun Donnelly
		Shaun Donnelly,
		Chief Executive Officer, Chief Financial Officer, (Principal Executive Officer and Principal Financial Officer)

 

 

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