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that's $20,000,000.00 a yr and our market cap is only $10,000,000.00
THE CAN OF WORMS IS SLOOOOOOOOOWLY OPENING UP
STAY TUNED
Mr. Herzog is a famous SEC litigator. Does TAUG have anything to fear from the SEC? I'd say yes
Like I have said numerous times this cockamamie lawsuit is going to open up a bad can of worms for TAUG and Sethyboy
Stay tuned..Ask Josh Kimmel. 865 924 3210 kimmelj5@me.com and there's many others too
totally agree. awesome dd.
what a beautiful chart. huge break out and more to come
http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=fern&insttype=&freq=1&show=&time=9
could be considered a productive day.
and this chart looks like a very productive 5 yrs. nice pump and dump seth
http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=taug&insttype=&freq=2&show=&time=12
cc and huge news coming and the caribbean peeps are in. no brainer
biggest day ever and more to come
penny land soon.
0007 - looking awesome
major volume today. i am sitting near the horse now. i am hearing monster news shall be coming. let's knock this outta the park
cc and major news which is coming will take fern into penny land and beyond
Wall Street strategist Tom Lee sees bitcoin surging to $6,000 next year, $25,000 by 2022
Tom Lee, founder of Fundstrat Global Advisors, established a mid-2018 target of $6,000 on the cryptocurrency.
Lee was the first major Wall Street strategist to come out with research on the cryptocurrency.
Bitcoin has already risen nearly 330 percent this year.
Fred Imbert | @foimbert
Published 48 Mins Ago
CNBC.com
Tom Lee
Adam Jeffery | CNBC
Tom Lee
Bitcoin has had a stellar year and one of Wall Street's top strategists thinks it can rise 40 percent more by next year.
Tom Lee, founder of Fundstrat Global Advisors, established a mid-2018 target of $6,000 on the cryptocurrency. Bitcoin traded at $4,284.14 on Friday, according to Coindesk. For the year, bitcoin has surged nearly 330 percent.
In a note to clients, Lee cites the approval of bitcoinoptions trading and the adoption of futures trading in the cryptocurrency as potential tailwinds.
This "implies significant rise [in] institutional holdings of Bitcoin in next 6-8 months given recent approvals," he said. "No doubt, this will lead to an increase in overall transaction volumes for bitcoin."
Lee was the first major Wall Street strategist to come out with research on the cryptocurrency. Last month, he said bitcoin could be worth up to $55,000 by 2022, adding that cryptocurrencies are "cannibalizing demand for gold."
Other well-known figures in the finance community have also started to comment on bitcoin. Investing legend Bill Miller reportedly owns bitcoin, and Josh Brown, CEO of Ritholtz Wealth Management, said last month he used Coinbase to buy bitcoin as a learning exercise.
"We see bitcoin as gaining from institutional sponsorship, improving transaction platforms and ultimately, greater public adoption," Lee added.
Fred Imbert
Markets Reporter
RELATED SECURITIES
Symbol
Price
Change
%Change
Bitcoin/USD 4225.04 -41.51 -0.97%
https://www.cnbc.com/2017/08/18/tom-lee-sees-bitcoin-jumping-to-6000-next-year.html
Fw: QBAN. JERRY MILLER MASSIVE SEC INVESTIGATION RE WILSON DAVIS
From: XXXXXXXXXX
Sent: Friday, August 18, 2017 1:24 AM
To: jcarlson@wdco.com; rcarlson@wdco.com; mklekas@wdco.com
Subject: QBAN. JERRY MILLER MASSIVE SEC INVESTIGATION
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=133936917
Wilson-Davis & Company-WD INVESTMENTS 236 So. Main St. - Salt Lake City, UT 84101
WDCO Shell Status Worksheet
Proposed Liquidation:
Customer: Issuer: Symbol:
Background Information:
Rule 144 is not available for the resale of securities issued by companies that are or ever have been a shell, defined
generally as a company with: (a) no or nominal assets; (b) assets consisting solely of cash and cash equivalents; or
(c) assets consisting of any amount of cash and cash equivalents and nominal other assets.
A former shell company can only cure its status if it files “Form 10 type information” (usually in a Form 8-K report)
reflecting the fact that it has ceased to be a shell company together with all Forms 10-Q and 10-K required during
the following year.
For Companies that File Periodic Reports with the SEC:
1. Has the Issuer filed all periodic reports required to be filed during the preceding 12 months (at least one 10-K
and three 10-Qs)? Yes ? No ?
2. Do all of such periodic reports include information, in both the text and the financial statements, describing
substantial assets, other than cash or cash items, and operations? Yes ? No ?
3. For most recent periodic report, which was either (complete one): an annual report on Form 10-K for the year
ended ____________; or a quarterly report on Form 10-Q for the quarter ended ____________, the Issuer had:
(a) Assets of cash and cash items totaling $____________ and gross assets of $____________
(b) Describe types of noncash assets:
(c) Revenues of $____________
(d) What is the Issuer’s business?
In order to liquidate the Securities, the Issuer must have substantial noncash/cash item assets
and substantial operations continuously for at least the last 12 months.
For Companies that Do Not Now File Periodic Reports with the SEC, but Did Previously:
1. The date the Rule 144 holding period started for the securities was:
2. Complete the following table for each year since inception of the Issuer to the date the Rule 144 holding period
commenced as stated above (attach all such financial statements or Internet links to public web site):
Year Cash-Cash Items Gross Assets Revenues Nature of Business
$ $ $
$ $ $
$ $ $
$ $ $
$ $ $
$ $ $
$ $ $
$ $ $
$ $ $
$ $ $
In order to liquidate the Securities, the Issuer must have substantial noncash/cash item assets
and substantial operations continuously from inception to the date of issuance of the Securities.
Signature of Registered Representative: Date: Signature of Reviewer:
http://www.wdco.com/uploads/files/8/SSW.pdf
Wilson-Davis & Company-WD INVESTMENTS 236 So. Main St. - Salt Lake City, UT 84101
WDCO Shell Status Worksheet
Proposed Liquidation:
Customer: Issuer: Symbol:
Background Information:
Rule 144 is not available for the resale of securities issued by companies that are or ever have been a shell, defined
generally as a company with: (a) no or nominal assets; (b) assets consisting solely of cash and cash equivalents; or
(c) assets consisting of any amount of cash and cash equivalents and nominal other assets.
A former shell company can only cure its status if it files “Form 10 type information” (usually in a Form 8-K report)
reflecting the fact that it has ceased to be a shell company together with all Forms 10-Q and 10-K required during
the following year.
For Companies that File Periodic Reports with the SEC:
1. Has the Issuer filed all periodic reports required to be filed during the preceding 12 months (at least one 10-K
and three 10-Qs)? Yes ? No ?
2. Do all of such periodic reports include information, in both the text and the financial statements, describing
substantial assets, other than cash or cash items, and operations? Yes ? No ?
3. For most recent periodic report, which was either (complete one): an annual report on Form 10-K for the year
ended ____________; or a quarterly report on Form 10-Q for the quarter ended ____________, the Issuer had:
(a) Assets of cash and cash items totaling $____________ and gross assets of $____________
(b) Describe types of noncash assets:
(c) Revenues of $____________
(d) What is the Issuer’s business?
In order to liquidate the Securities, the Issuer must have substantial noncash/cash item assets
and substantial operations continuously for at least the last 12 months.
For Companies that Do Not Now File Periodic Reports with the SEC, but Did Previously:
1. The date the Rule 144 holding period started for the securities was:
2. Complete the following table for each year since inception of the Issuer to the date the Rule 144 holding period
commenced as stated above (attach all such financial statements or Internet links to public web site):
Year Cash-Cash Items Gross Assets Revenues Nature of Business
$ $ $
$ $ $
$ $ $
$ $ $
$ $ $
$ $ $
$ $ $
$ $ $
$ $ $
$ $ $
In order to liquidate the Securities, the Issuer must have substantial noncash/cash item assets
and substantial operations continuously from inception to the date of issuance of the Securities.
Signature of Registered Representative: Date: Signature of Reviewer:
http://www.wdco.com/uploads/files/8/SSW.pdf
QBAN's attorney is also under SEC INVESTIGATION...WHAT'S THAT SAYING ABOUT BRIDS AND FEATHER?? OH, THEY FLOCK TOGETHER. HMMMMMMM
https://www.otcmarkets.com/ajax/showFinancialReportById.pdf?id=176382
9) Third Party Providers
Legal Counsel
Name: Andrew Coldicutt, ESQ
Firm: Law Office of Andrew Coldicutt
Address 1: 1220 Rosecrans Street, PMB 258
Address 2: San Diego, CA 92106
Phone: 619-228-4970
Email: info@coldicuttlaw.com
https://search.yahoo.com/yhs/search?hspart=adk&hsimp=yhs-adk_sbnt¶m2=c9a571fa-d2fd-4a7e-a37a-11b1a006fa80¶m3=converter_3.4~US~appfocus1¶m4=d~Chrome~Andrew+Coldicutt%2c+ESQ+SEC¶m1=20170817&p=Andrew+Coldicutt%2c+ESQ+SEC&type=co_appfocus1_cr
www.securitieslawyer101.com/2017/files-subpoena...
The SEC announced that it has filed a subpoena enforcement action against Andrew Coldicutt and the Law Offices of Andrew Coldicutt.
Andrew T.E. Coldicutt, et al. (Release No. LR-23882; Jul. 21 ...
www.sec.gov/litigation/litreleases/2017/lr23882.htm
U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 23882 / July 21, 2017 Securities and Exchange Commission v. Andrew T.E. Coldicutt, et al.,
THE BIGGEST NOTE HOLDER IS JMZ ALLIANCE. JERRY MILLER AND HIS WIFE JESSICA MILLER
https://www.otcmarkets.com/ajax/showFinancialReportById.pdf?id=176382
8) Officers, Directors, and Control Persons
A. Names of Officers, Directors, and Control Persons. In responding to this item, please provide the
names of each of the issuer’s executive officers, directors, general partners and control persons
(control persons are beneficial owners of more than five percent (5%) of any class of the issuer’s
equity securities), as of the date of this information statement.
William J Sanchez, CEO, President, and Chairman of the Board
Maria B. Anez, Director/Secretary
JMZ Alliance Group, Inc. (Holds non-votable shares)
HERE'S THE SCOOP ON JERRY MILLER VS THE SEC. THEY WILL PROBABLY GO AFTER QBAN NOW
Telco Cuba congratulates MicroTech on a job well done. As an initial RFP team member, the potential upside for Telco Cuba is tremendous. With the teaming agreement having run its course, we await further advisement from MicroTech on what the next steps are to continue our relationship with them." - William Sanchez, CEO.
With the teaming agreement having run its course. THAT MEANS IT EXPIRED, LONG GONE. The tweet from the CEO was fraudulent
The scammer behind QBAN is none other then jerry miller who is also behind KNSC and is about to take 4mio.com public. so sad
https://www.sec.gov/litigation/complaints/2017/comp23782.pdf
UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA ...
www.sec.gov
united states district court southern district of florida case no.: securities and exchange commission, plaintiff, v. jerry miller, defendant.
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
CASE NO.:
SECURITIES AND EXCHANGE COMMISSION,
Plaintiff,
v.
JERRY MILLER,
Defendant.
______________________________________________________/
COMPLAINT
Plaintiff Securities and Exchange Commission (the “Commission”) alleges:
I. SUMMARY
1. On or about February 26, 2014, Defendant Jerry Miller made and directed the
dissemination of materially false and misleading statements in a press release issued publicly on
www.otcmarkets.com by Petrotech Oil and Gas, Inc. (“Petrotech”).
2. Following Colorado’s legalization of the sale of recreational marijuana in January
2014, Petrotech, at the direction and behest of Miller and his entities, LP.US Inc. and LP.US
Management Group, both subsidiaries of Petrotech, issued a press release announcing that it had
expanded its cannabis and hemp production and distribution channels in Washington and
Colorado by securing a “Medical and Recreational license” from the state of Colorado and
signing on six licensed growers, as well as three additional growers in Washington.
3. However, Colorado has never issued any license to cultivate or sell marijuana in
the medical or retail markets to any of those entities. Furthermore, Petrotech, both LP US
Case 1:17-cv-20933-XXXX Document 1 Entered on FLSD Docket 03/13/2017 Page 1 of 9
2
entities, and all of their associated individuals have never held commercial or occupational
licenses in the Colorado Medical or Retail Marijuana industries.
4. Miller knew, or was reckless in not knowing, that the February 26, 2014 press
release contained materially false and misleading statements related to Petrotech’s purported
marijuana business.
5. By engaging in this conduct, Miller violated Section 10(b) of the Securities
Exchange Act of 1934 (“Exchange Act”), 15 U.S.C. § 78j(b), and Exchange Act Rule 10b-5(b),
17 C.F.R. § 240.10b-5(b); and alternatively, violated Section 10(b) and Rule 10b-5(b) through or
by means of any other person, pursuant to Section 20(b) of the Exchange Act, 15 U.S.C.
§ 78t(b). Unless enjoined, Miller is reasonably likely to continue to violate the federal securities
laws.
6. The Commission therefore respectfully requests the Court enter an order:
(i) permanently restraining and enjoining Miller from violating the federal securities laws;
(ii) directing Miller disgorge all ill-gotten gains; (iii) directing Miller to pay civil money
penalties; (iv) imposing an officer and director bar against Miller; and (v) imposing a penny
stock bar against Miller.
II. JURISDICTION AND VENUE
7. This Court has jurisdiction over this action pursuant to Sections 21(d)(1),
21(d)(3)(A), and 27 of the Exchange Act, 15 U.S.C. §§ 78u(d)(1), 78u(d)(3)(A), and 78aa.
8. Venue in the Southern District of Florida is proper pursuant to Section 27 of the
Exchange Act, 15 U.S.C. § 78aa. Miller resides and transacts business in this District.
Additionally, a substantial portion of the conduct alleged herein occurred in the Southern District
of Florida.
Case 1:17-cv-20933-XXXX Document 1 Entered on FLSD Docket 03/13/2017 Page 2 of 9
3
9. In connection with the conduct alleged in this Complaint, Miller, directly and
indirectly, singly or in concert with others has made use of the means or instrumentalities of
interstate commerce, the means or instruments of transportation or communication in interstate
commerce, and the mails.
III. DEFENDANT
10. Miller, age 64, is the owner, President, and sole employee of a consulting firm
specializing in microcap stock issuers, investor relations, and capital raising. Miller and his
consulting company provided consulting services to Petrotech and its prior iterations beginning
in approximately 2009. Miller is the father-in-law of the Secretary and Director of Petrotech
during the relevant time. He resides in Bay Harbor Islands, Florida.
IV. OTHER RELEVANT ENTITY
11. Petrotech was a Nevada corporation headquartered in Bedford, Texas until mid-
2014, when the company ceased operations. Its common stock was quoted on the OTC Link
operated by OTC Markets Group Inc. (symbol “PTOG”) until March 14, 2014, when the
Commission issued an order temporarily suspending trading in its securities. At all relevant
times, Petrotech common stock qualified as “penny stock” under Section 3(a)(51) of the
Exchange Act, 15 U.S.C. § 78c(a)(51), and Rule 3a51-1 thereunder, 17 C.F.R. § 240.3a51-1.
V. FACTUAL BACKGROUND
A. Petrotech’s Formation
12. Petrotech was formed in Nevada in 1998 under a different name, as a purported
natural resource company engaged in the acquisition of mineral properties. Between 2000 and
2013, the company underwent a reverse merger and several name changes, acquired two
Case 1:17-cv-20933-XXXX Document 1 Entered on FLSD Docket 03/13/2017 Page 3 of 9
4
subsidiaries, and was purportedly involved in various industries, including the development of
compact disc and digital video marketing and profiling tools, and wine and spirits production.
13. Since approximately 2009, Miller and his consulting company, from its location in
Bay Harbor Islands, Florida, provided consulting services to Petrotech’s immediate predecessor,
which was purportedly in the financial consulting business. Miller was a controlling shareholder
of the predecessor company between 2010 and 2013, before the merger that created Petrotech.
14. In or around 2012, Miller introduced the predecessor company to an oil and gas
company, and Miller and his consulting company assisted the predecessor company and the oil
and gas company complete a reverse merger. The resulting company was named Petrotech, and
Miller through his consulting company owned a significant number of shares in Petrotech after
the merger. Miller and the consulting firm sold Petrotech stock at a profit during the time of the
issuance of the press releases described herein.
15. Miller’s son-in-law was the predecessor company’s chairman, sole Director, and
Secretary and remained in those roles after the merger with Petrotech.
16. In one of Petrotech’s last public disclosures prior to the press releases, its Annual
Report ending December 31, 2013, Petrotech stated that its financial condition was such that it
“raised substantial doubt about the Company's ability to continue as a going concern.”
B. Miller Sets the Stage for Petrotech’s Foray into the Marijuana Business
17. In January 2014, Colorado’s legalization of the sale of recreational marijuana
became effective.
18. In early 2014, Miller incorporated LP.US, Inc. in Florida and LP.US Management
Group, Inc. in Colorado and Washington (collectively, “LP US”). LP US, as a Petrotech
subsidiary, would become Petrotech’s vehicle to enter the burgeoning marijuana-related business.
Case 1:17-cv-20933-XXXX Document 1 Entered on FLSD Docket 03/13/2017 Page 4 of 9
5
Miller provided and controlled the financing of LP US and was responsible for its business
decisions.
19. On or about February 19, 2014, in a press release Miller assisted in drafting,
Petrotech announced for the first time that it had set up LP US, a subsidiary company in
Colorado and Washington, “to serve as the foundation for the company’s entrance into the
emerging market for medical and recently legalized recreational marijuana in the United States.”
LP US would purportedly “specialize in managing the growers of legalized Marijuana and Hemp
in the states where they are allowed to grow.”
20. On or about February 20, 2014, Petrotech issued another press release announcing
that LP US was “structured around three main divisions [which would] work cohesively to
produce and market medicinal and recreational marijuana.”
21. Throughout February 2014 and March 2014, Petrotech continued to issue press
releases portraying it as having lucrative relationships with established marijuana growers.
22. During this time frame, Miller personally decided when to draft a press release,
what statements it would include, and when it would be publicly disseminated on behalf of
Petrotech.
23. Miller used his son-in-law, who as Petrotech’s Secretary had the ability to upload
press releases to www.otcmarkets.com and the company’s website, to publicly disseminate the
press releases via those websites.
C. Miller’s False Statement about Petrotech’s Marijuana License
24. On February 26, 2014, in a press release that Miller authored and directed to be
disseminated, Petrotech announced that in conjunction with its newly-founded marijuana
Case 1:17-cv-20933-XXXX Document 1 Entered on FLSD Docket 03/13/2017 Page 5 of 9
6
business, specifically its production and distribution channels in Washington and Colorado, it
had “secured a Medical and Recreational License from the state of Colorado.”
25. This statement is false. First, Colorado has never issued any marijuana-related
license by that name. Second, Petrotech, LP US, and all their associated individuals have never
held any Colorado licenses to cultivate or sell marijuana in the medical or retail markets, and, as
non-Colorado residents, could not obtain such licenses. Without such licenses, Petrotech and LP
US would not be legally able to commercially produce or market marijuana in Colorado.
26. Despite not having the requisite license to conduct such commercial marijuana
business in Colorado, Petrotech further announced in this press release an increased projected
marijuana production capacity of a minimum of 60-70 pounds per state, per month, with an
average market price of $3,000 per pound. These projections were announced as a result, in part,
from the securing of the marijuana license, which, in reality, was non-existent.
VI. CLAIMS FOR RELIEF
COUNT I
Fraud in Violation of Section 10(b) and Rule 10b-5(b) of the Exchange Act
27. The Commission realleges and incorporates Paragraphs 1 through 26 of this
Complaint.
28. On or about February 26, 2014, Miller, directly or indirectly, by use of any means
or instrumentality of interstate commerce, or of the mails, knowingly or recklessly made untrue
statements of material facts or omitted to state material facts necessary in order to make the
statements made, in light of the circumstances under which they were made, not misleading in
connection with the purchase or sale of a security.
Case 1:17-cv-20933-XXXX Document 1 Entered on FLSD Docket 03/13/2017 Page 6 of 9
7
29. By reason of the foregoing, Miller violated, and unless enjoined, is reasonably
likely to continue to violate, Section 10(b) of the Exchange Act, 15 U.S.C. § 78j(b), and
Exchange Act Rule 10b-5(b), 17 C.F.R. § 240.10b-5(b).
COUNT II
Violations of Sections 10(b), 20(b), and Rule 10b-5(b) of the Exchange Act
30. The Commission realleges and incorporates Paragraphs 1 through 26 of this
Complaint.
31. At all relevant times, Miller directly or indirectly violated Section 10(b) of the
Exchange Act, 15 U.S.C. § 78j(b), and Rule 10b-5(b) thereunder, 17 C.F.R. § 240.10b-5(b).
32. At all relevant times, Miller, directly or indirectly, through his son-in-law, did acts
or things which would have been unlawful for Miller to do under Exchange Act Section 10(b)
and Rule 10b-5(b).
33. By reason of the foregoing, Miller violated, and unless enjoined, is likely to
continue to violate, Section 20(b) of the Exchange Act, 15 U.S.C. § 78t(b).
VII. RELIEF REQUESTED
WHEREFORE, the Commission respectfully requests that the Court find Miller
committed the violations alleged in this Complaint, and:
I.
Permanent Injunctive Relief
Issue a Permanent Injunction restraining and enjoining Defendant, his officers, agents,
servants, employees, attorneys, and all persons in active concert or participation with him, and
each of them, from violating the federal securities laws alleged in this Complaint.
Case 1:17-cv-20933-XXXX Document 1 Entered on FLSD Docket 03/13/2017 Page 7 of 9
8
II.
Disgorgement
Issue an Order directing Defendant to disgorge all ill-gotten gains, including prejudgment
interest, resulting from the acts or courses of conduct alleged in this Complaint.
III.
Penalties
Issue an Order directing Defendant to pay civil money penalties pursuant to Section
21(d)(3) of the Exchange Act, 15 U.S.C. § 78u(d)(3).
IV.
Officer and Director Bar
Issue an order pursuant to Section 21(d)(2) of the Exchange Act, 15 U.S.C. § 78u(d)(2),
barring Defendant from serving as an officer or director of any issuer that has a class of
securities registered pursuant to Section 12 of the Exchange Act or that is required to file reports
pursuant to Section 15(d) of the Exchange Act.
V.
Penny Stock Bar
Issue an order barring Defendant from any future participation in the offering of any
penny stock, as defined by Section 3(a)(51)(A) of the Exchange Act, 15 U.S.C. § 77c(a)(51)(A)
and Rule 3a51-1 thereunder, 17 C.F.R. § 20.3a51-1, including engaging in activities with a
broker, dealer, or issuer for purposes of issuing, trading, or inducing or attempting to induce the
purchase or sale of any penny stock, pursuant to Section 21(d)(6) of the Exchange Act, 15 U.S.C.
§ 78u(d)(6), and the Court’s equitable powers.
Case 1:17-cv-20933-XXXX Document 1 Entered on FLSD Docket 03/13/2017 Page 8 of 9
9
VI.
Further Relief
Grant such other and further relief as may be necessary and appropriate.
VII.
Retention of Jurisdiction
Further, the Commission respectfully requests the Court retain jurisdiction over this
action and over this Defendant, in order to implement and carry out the terms of all orders and
decrees that it may enter, or to entertain any suitable application or motion by the Commission
for additional relief within the jurisdiction of this Court.
Respectfully submitted,
March 13, 2017 By: s/Wilfredo Fernandez
Wilfredo Fernandez
Senior Trial Counsel
Fla. Bar No. 142859
Telephone: (305) 982-6376
Facsimile: (305) 536-4154
E-mail: FernandezW@sec.gov
ATTORNEY FOR PLAINTIFF
SECURITIES AND EXCHANGE COMM
dear jennifer
it has come to our attention that a company called telcocuba is using your 50b dollar press release to pump up their stock by saying that they are affilated with you and are intitled to part of the proceeds. their stock symbol is qban. the guy behind qban is a man named jerry miller who is under a massive sec investigation. here's a post and all the info from a message board
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=133711881
why not. it's an empty, worthless shell. should be 0001
the friendable app is dead. the fanpass app is dead. this company is dead. it's just a bloated junkass shell run by a few crooks
i have pm'd a lot peeps that rode bitcf from 01 to $3.10 and peeps from ottv that rode it from 0003 to almost a penny and numerous others to keep an eye on fern. kabbbbbbbbbbbbbbbbbbbbbbbbbbbbbbooooooooooooooooom
it's a scam
lmfao. qban is nothing more then scam run by jerry miller, the pump and dump crook. qban has nothing and never will, bookmark this post
$1.00 a share buyout??? lllllllllllllllllllllllllllllllllllllllllllllllllllllollllllllllllllllllllllllllllllll
'
you'll be lucky if this scam doesn't get suspended
0002 coming. trip 3's getting killed..some ipo run. eh ron? lmfao
an MOA? they probably meant it's an MOU which is a memorandum of understanding (MOU) is a nonbinding agreement between two or more parties
QBAN is nothing more then a scam run by a few pump and dump scammers. Stay tuned
your posts would make a case against yourself.
yup. like i said this cockamamie lawsuit is going to open up a huge can of ugly worms. stay tuned
Let's see if Lenny can duplicate these numbers with ARNH
http://www.marketwatch.com/story/musclepharm-reports-2017-second-quarter-financial-results-2017-08-14?siteid=bigcharts&dist=bigcharts
PRESS RELEASE
MusclePharm Reports 2017 Second Quarter Financial Results
Published: Aug 14, 2017 4:10 p.m. ET
DENVER, Aug. 14, 2017 /PRNewswire/ -- MusclePharm Corporation (MSLP) ("MusclePharm" or the "Company") (otcqb:MSLP), a scientifically-driven, performance lifestyle sports nutrition company, today announced financial results for the second quarter ended June 30, 2017.
Operational and Financial Highlights for Second Quarter 2017 (as compared to Second Quarter 2016 unless otherwise indicated):
Financial Results
Net Revenue was $26.2 million, compared to $32.9 million in Q2 2016, and flat sequentially compared to Q1 2017.
Adjusted EBITDA excluding one-time adjustments was $1.7 million, compared to $2.1 million for Q1 2017.
Reduced net loss 25% to $3.1 million.
Gross Margin increased to 29.1%, from 24.9% compared to Q1 2017.
Operational Highlights
Online sales expanded in the quarter to 17.8% of sales, from 14.8% of sales, driven by our enhanced presence on Amazon.com
Shipped first products from the Natural Series line
Ramped manufacturing in Europe; added two new customers – Tropicana and Muscle Finesse
Settled the City Football Group litigation with a $3M settlement, representing a significant reduction in potential liability
Entered into a partnership with the United States Air Force School of Aerospace Medicine (USAFSAM) to develop products specific to the needs of special tactics airmen when in combat.
Cost Reduction Activities
Reduced inventory by 28.4% compared to $8.6 million as compared to December 31, 2016
Total operating expenses decreased by 17.6% to $10.0 million
Selling, general and administrative expenses decreased 36.1% to $2.8 million
Salaries and benefits costs decreased 20.4% to $2.6 million
Advertising and promotion expenses decreased 16.6% to $2.2 million
Professional fees decreased 58.3% to $0.7 million
Expansion of the Executive Team and Board of Directors
Appointed Matthew Kerbel as Chief Marketing Officer and Paul Anton as Vice President of Finance; both joined the Company in August 2017
Strengthened corporate governance with two new appointments to the Board of Directors: John J. Desmond, a certified public accountant with more than 40 years of public accounting industry experience, and Brian Casutto, MusclePharm's Executive Vice President of Sales & Operations.
"During the second quarter of 2017, MusclePharm continued to successfully execute against its growth strategy and began to tilt the scales away from the distractions of having to address legacy issues, to truly move forward and build what we are confident will be a high-growth, sustainably profitable business," commented Ryan Drexler, President and Chief Executive Officer of MusclePharm, Inc. "We made significant progress executing against the three core elements of our growth plan: 1) growing international sales; 2) expanding and improving our product lines; and 3) diversifying our distribution channels, with a focus on growth from our online channels.
International sales accounted for a higher percentage of total revenue in the second quarter, both year-over-year and sequentially. Notable progress was made in the U.K., led by our new U.K. Sales Director, Daniel Clark. As market demand for nutritional supplements remains robust in the region, we are investing significantly in our European manufacturing capabilities to support our sales efforts in this promising market.
"We are excited about the initial market acceptance and broad rollout strategy for the Natural Series. Shipping of initial products commenced in the middle of the second quarter, and we were proud and excited to have the Natural Series accepted by Sprouts Farmers Market. Several additional products also began their initial rollout near the end of the quarter. We are encouraged by the strong initial uptake online and anticipate strong demand for the Natural Series, especially among the specialty retailer channel. We expect to introduce new products in the Natural Series product line in the second half of 2017.
"We also continued to make significant progress diversifying our distribution channels. In particular, we expanded sales online through the online offerings of our existing brick and mortar customers and reported strong results through our distribution partnership with Amazon, which accounted for 12% of our total revenues in the second quarter from 6% in Q1 of 2017.
"The results of these initiatives demonstrate continued strength in our core business and early positive signs that we are making headway against our growth strategy. We are encouraged by the trends we saw in the second quarter and look forward to accelerating our growth strategy in the second half of the year," concluded Mr. Drexler.
2017 Second-Quarter Results
For the second quarter ended June 30, 2017, net revenue was $26.2 million, compared with $32.9 million in the prior year. The decrease in net revenue was primarily due to the termination of the Arnold Schwarzenegger product-line licensing agreement, the sale of our BioZone subsidiary and certain other products being discontinued. Net revenue for the second quarter of 2017 was flat compared to first quarter 2017 net revenue of $26.0 million. Normalized net revenue, which excludes sales from discontinued products, the Arnold Schwarzenegger product-line licensing agreement and the sale of our BioZone subsidiary, was $26.4 million, compared to $31.7 million in Q2 2016. The decrease was due to lower sales at the Company's traditional brick and mortar retail partners.
Adjusted EBITDA, including certain one-time adjustments, a non-GAAP measure excludes stock-based compensation, restructuring charges, depreciation and amortization, as well as other items defined in the reconciliation table included in the press release, was $1.7 million for the quarter ended June 30, 2017 as compared to $2.1 million in the quarter ended March 31, 2017. Management believes this is a primary metric to track company performance as it excludes one time and non-recurring items and reflects the state of the underlying sustaining business.
For the second quarter of 2017, gross profit was $7.6 million, compared to $10.7 million in the second quarter of 2016, most of which was related to increased whey protein costs and discontinued products. Operating expenses were $10.0 million for the second quarter of 2017, compared to $12.2 million for the same period in 2016. Operating expenses were 38.3% of revenue in the second quarter of 2017 compared to 37.0% for the same period in 2016, with significant reductions in advertising and promotion expense and salaries and benefits expense. Excluding the settlement with City Football Group which totaled $3 million and resulted in a charge of $1.5 million in the quarter ended June 30, 2017, operating expenses were 32.7% of revenues for the second quarter of 2017, a decrease of 4.3% compared to the same period in 2016. Advertising and promotion expense decreased 16.6% to $2.2 million for the second quarter of 2017, or 8.6% of revenue, compared to $2.7million, or 8.2% of revenue, for the second quarter of 2016.
The net loss for the 2017 second quarter was ($3.1 million), or a loss of ($0.23) per share, compared to a loss of ($4.2 million), or a loss of ($0.30) per share, for the same period in the prior year.
2017 Second Quarter Conference Call Information
When: Monday, August 14, 2017 Time: 4:30 p.m. Eastern Time Phone: 1-877-407-0792 (domestic) 1-201-689-8263 (international) Participants must request the MusclePharm Second Quarter Results Call.
A live webcast will be available online on MusclePharm's website at http://ir.musclepharmcorp.com/, where it will be archived for one year.
An audio replay of the conference call will be available through midnight August 24, 2017 by dialing 1- 844-512-2921 from the U.S. or Canada, or 1-412-317-6671 from international locations, Conference ID: 13667203.
About MusclePharm Corporation
MusclePharm® is a scientifically-driven, performance lifestyle company that develops, manufactures, markets and distributes branded nutritional supplements. The Company offers a range of powders, capsules, tablets and gels. Its portfolio of recognized brands includes MusclePharm® Sport Series, Black Label and Core Series, FitMiss™, as well as Natural Series which was launched in 2017. These products are available in more than 120 countries and over 50,000 retail outlets worldwide. The clinically-proven supplements are developed through a six-stage research process utilizing the expertise of leading nutritional scientists, doctors and universities. MusclePharm is the innovator of the sports nutrition industry. For more information, visit http://www.musclepharm.com. To sign up to receive MusclePharm news via email, please visit http://ir.musclepharmcorp.com/email-alerts.
Forward-Looking Statements
This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended. Statements that are not a description of historical facts constitute forward-looking statements and may often, but not always, be identified by the use of such words as "expects", "anticipates", "intends", "estimates", "plans", "potential", "possible", "probable", "believes", "seeks", "may", "will", "should", "could" or the negative of such terms or other similar expressions. Actual results may differ materially from those set forth in this release due to the risks and uncertainties inherent in the Company's business. More detailed information about the Company and the risk factors that may affect the realization of forward-looking statements is set forth in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2016, the Company's Quarter Reports on Form 10-Q and other filings submitted by the Company to the Securities and Exchange Commission, copies of which may be obtained from the SEC's website at www.sec.gov. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. All forward-looking statements are qualified in their entirety by this cautionary statement and the Company undertakes no obligation to revise or update this release to reflect events or circumstances after the date hereof.
Phil Carlson / Elizabeth Barker IR for MusclePharm pcarlson@kcsa.com / ebarker@kcsa.com 212.896.1233 / 212.896.1203
## Tables Follow ##
MusclePharm Corporation Condensed Consolidated Statements of Operations (In thousands, except share and per share data) (Unaudited)
Three Months Ended
June 30,
2017
2016
Revenue, net
$
26,192
$
32,867
Cost of revenue (1)
18,576
22,181
Gross profit
7,616
10,686
Operating expenses:
Advertising and promotion
2,240
2,686
Salaries and benefits
2,620
3,292
Selling, general and administrative
2,829
4,424
Research and development
152
531
Professional fees
727
1,742
Restructuring and othe charges
—
(4,820)
Settlement of obligation
1,453
—
Impairment of assets
—
4,313
Total operating expenses
10,021
12,168
Loss from operations
(2,405)
(1,482)
Gain on settlement of accounts payable
22
—
Loss on sale of subsidiary
—
(2,115)
Other expense, net
(690)
(592)
Loss before provision for income taxes
(3,073)
(4,189)
Provision for income taxes
76
7
Net loss
$
(3,149)
$
(4,196)
Net loss per share, basic and diluted
$
-0.23
$
-0.48
Weighted average shares used to compute net loss per share, basic and diluted
13,845,301
13,874,209
MusclePharm Corporation
Condensed Consolidated Balance Sheets
(In thousands, except share and per share data)
30-Jun
December 31,
2017
2016
(Unaudited)
ASSETS
Current assets:
Cash
$
3,553
$
4,943
Accounts receivable, net of allowance of $521 and $462
13,408
13,353
Inventory
6,133
8,568
Prepaid giveaways
135
205
Prepaid expenses and other current assets
2,403
1,725
Total current assets
25,632
28,794
Property and equipment, net
2,498
3,243
Intangible assets, net
1,478
1,638
Other assets
146
421
TOTAL ASSETS
$
29,754
$
34,096
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable
$
9,134
$
9,625
Accrued liabilities
8,115
9,051
Accrued restructuring charges, current
588
614
Obligation under secured borrowing arrangement
3,147
2,681
Convertible note with a related party, net of discount
16,772
16,465
Total current liabilities
37,756
38,436
Accrued restructuring charges, long-term
161
208
Other long-term liabilities
1851
332
Total liabilities
39,768
38,976
Commitments and contingencies
Stockholders' deficit:
Common stock
14
14
Additional paid-in capital
157,448
156,301
Treasury stock, at cost; 875,621 shares
-10,039
-10,039
Accumulated other comprehensive loss
-145
-162
Accumulated deficit
-157,292
-150,994
TOTAL STOCKHOLDERS' DEFICIT
-10,014
-4,880
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT
$
29,754
$
34,096
Non-GAAP Adjusted EBITDA
In addition to disclosing financial results calculated in accordance with U.S. Generally Accepted Accounting Principles, ("GAAP"), this press release discloses Adjusted EBITDA, which is net loss adjusted for income taxes, depreciation and amortization of property and equipment, amortization of intangible assets, provision for doubtful accounts, amortization of prepaid stock compensation, amortization of prepaid sponsorship fees, stock-based compensation, issuance of common stock warrants, other expense, net, loss on sale of subsidiary, gain on settlements, restructuring, and asset impairment charges. Management believes that this non-GAAP measures provides investors with important additional perspectives into our ongoing business performance.
The GAAP measure most directly comparable to Adjusted EBITDA is net loss. The non–GAAP financial measure of Adjusted EBITDA should not be considered as an alternative to net loss. Adjusted EBITDA is not a presentation made in accordance with GAAP and has important limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. Because Adjusted EBITDA excludes some, but not all, items that affect net loss and is defined differently by different companies, our definition of Adjusted EBITDA may not be comparable to similarly titled measures of other companies.
Set forth below are reconciliations of our reported GAAP net loss to Adjusted EBITDA (in thousands):
Three Months Ended
Three Months Ended
Six MonthsEnded Jun. 30, 2017
June 30, 2017
Mar. 31, 2017
Year Ended Dec. 31, 2016
Dec. 31, 2016
Sept. 30, 2016
June 30, 2016
Mar. 31, 2016
Net loss
$ (6,298)
$ (3,149)
$ (3,149)
$ (3,477)
$ 8,771
$ (1,447)
$ (4,196)
$ (6,605)
Stock-based compensation
1,148
541
607
5,304
323
(116)
427
4,670
Restructuring and asset impairment charges
-
-
-
3,186
(970)
1,920
-
2,236
Gain on settlement of accounts payable
(471)
(22)
(449)
(9,927)
(9,927)
-
-
-
Loss on sale of subsidiary
-
-
-
2,115
-
-
2,115
-
Amortization of prepaid sponsorship fees
255
110
145
1,235
180
211
146
698
Other expense, net
1,668
690
978
2,313
1,009
117
516
671
Amortization of prepaid stock compensation
-
-
-
938
-
-
235
703
Depreciation and amortization of property
and equipment
630
290
340
1,551
389
346
389
427
Amortization of intangible assets
160
80
80
576
80
80
196
220
(Recovery) provision for doubtful accounts
224
144
80
386
152
225
43
(34)
Issuance of common stock warrants to third parties for services
-
-
-
6
-
-
3
3
Provision for income taxes
104
76
28
318
180
-
7
131
Adjusted EBITDA
$ (2,580)
$ (1,240)
$ (1,340)
$ 4,524
$ 187
$ 1,336
$ (119)
$ 3,120
One time events
Executive severance
493
206
287
1,062
-
-
-
1,062
Discontinued business/product lines
646
513
133
2,102
(121)
-
771
1,452
Settlement related, including legal
2,485
1,927
558
3,533
1,248
723
816
746
Unusual credits against revenue
1,141
1,141
-
-
-
-
-
Whey protein costs
1,322
296
1,026
-
-
-
-
-
Financing costs
280
5
275
-
-
-
-
-
Total one-time adjustments
$ 6,367
$ 2,947
$ 3,420
$ 6,697
$ 1,127
$ 723
$ 1,587
$ 3,260
Adjusted EBITDA excluding one time
$ 3,787
$ 1,707
$ 2,080
$ 11,221
$ 1,314
$ 2,059
$ 1,468
$ 6,380
View original content:http://www.prnewswire.com/news-releases/musclepharm-reports-2017-second-quarter-financial-results-300504041.html
SOURCE MusclePharm Corporation
Copyright (C) 2017 PR Newswire. All rights reserved
From MarketWatch
excellent post and spot on TOG
we're in bed with same peeps that took mslp from $1.00 to $14.00 are now in arnh. a repeat of mslp? we shall see but we're in good hands with lenny and company
10q out on this bloated scam. Look at all those notes
Quarterly Report (10-q)
Date : 08/16/2017 @ 4:16PM
Source : Edgar (US Regulatory)
Stock : Friendable, Inc. (PC) (FDBL)
Quote : 0.0005 0.0002 (66.67%) @ 3:48PM
Quarterly Report (10-q)
Print
Alert
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
? QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: June 30, 2017
OR
? 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: 000-52917
FRIENDABLE, INC.
(Exact name of registrant as specified in its charter)
Nevada
98-0546715
(State or other jurisdiction of incorporation)
(I.R.S. Employer Identification No.)
1821 S Bascom Ave., Suite 353, Campbell, California 95008
(Address of principal executive offices) (zip code)
(855) 473-8473
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
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 ? 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 ? No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
?
Accelerated filer
?
Non-accelerated filer
?
(Do not check if a smaller reporting company)
Smaller reporting company
?
Emerging growth company
?
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
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:
1,965,508,014 shares of common stock outstanding as of August 10, 2017
i
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
1
ITEM 1. FINANCIAL STATEMENTS
1
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
16
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
20
ITEM 4. CONTROLS AND PROCEDURES
20
PART II - OTHER INFORMATION
21
ITEM 1. LEGAL PROCEEDINGS
21
ITEM 1A. RISK FACTORS
22
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
22
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
22
ITEM 4. MINE SAFETY DISCLOSURES
22
ITEM 5. OTHER INFORMATION
22
ITEM 6. EXHIBITS
23
SIGNATURES
24
ii
As used in this report, the term “the Company ” means Friendable, Inc., formerly known as iHookup Social, Inc., and its subsidiary, unless the context clearly indicates otherwise.
Special Note Regarding Forward-Looking Information
This quarterly report on Form 10-Q contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. The use of words such as “anticipates,” “estimates,” “expects,” “intends,” “plans” and “believes,” among others, generally identify forward-looking statements. These forward-looking statements include, among others, statements relating to: the Company’s future financial performance, the Company’s business prospects and strategy, anticipated trends and prospects in the industries in which the Company’s businesses operate and other similar matters. These forward-looking statements are based on the Company’s management's expectations and assumptions about future events as of the date of this quarterly report, which are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict.
Actual results could differ materially from those contained in these forward-looking statements for a variety of reasons, including, among others, the risk factors set forth below. Other unknown or unpredictable factors that could also adversely affect the Company’s business, financial condition and results of operations may arise from time to time. In light of these risks and uncertainties, the forward-looking statements discussed in this quarterly report may not prove to be accurate. Accordingly, you should not place undue reliance on these forward-looking statements, which only reflect the views of the Company’s management as of the date of this quarterly report. The Company does not undertake to update these forward-looking statements
In this quarterly report on Form 10-Q, unless otherwise specified, all dollar amounts are expressed in United States dollars and all references to “common shares” refer to the common shares in the Company’s capital stock.
An investment in the Company’s common stock involves a number of very significant risks. You should carefully consider the following risks and uncertainties in addition to other information in this quarterly report on Form 10-Q in evaluating the Company and its business before purchasing shares of the Company’s common stock. The Company’s business, operating results and financial condition could be seriously harmed as a result of the occurrence of any of the following risks. You could lose all or part of your investment due to any of these risks. You should invest in the Company’s common stock only if you can afford to lose your entire investment.
iii
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
FRIENDABLE, INC.
CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2017
(Unaudited)
Consolidated Balance Sheets as of June 30, 2017 and December 31, 2016
2
Consolidated Statements of Comprehensive Loss for the three and six months ended June 30, 2017 and 2016
3
Consolidated Statements of Stockholders’ Deficiency for the period from December 31, 2015 to June 30, 2017
4
Consolidated Statements of Cash Flows for the six months ended June 30, 2017 and June 30, 2016
5
Notes to the Consolidated Financial Statements
6-15
1
FRIENDABLE, INC.
CONSOLIDATED BALANCE SHEETS
(Expressed in US dollars)
ASSETS
June 30,
2017
(Unaudited)
December 31,
2016
Current assets
Cash
$ -
$ 119,804
Accounts receivable
1,074
1,009
Prepaid expenses
10,863
6,963
Total current assets
11,937
127,776
Intangible assets (Note 3)
35,000
35,000
TOTAL ASSETS
$ 46,937
$ 162,776
LIABILITIES AND STOCKHOLDERS' DEFICIT
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities
2,049,852
1,554,350
Convertible debentures (Note 10)
3,507,900
2,171,923
Deferred revenue
-
6,323
Total current liabilities
5,557,752
3,732,596
Convertible debentures (Note 10)
-
218,964
Total liabilities
5,557,752
3,951,560
Going concern (Note 1)
Commitments (Note 7)
Subsequent events (Note 13)
STOCKHOLDERS' DEFICIT
Preferred stock, 50,000,000 shares authorized at par value of $0.0001, 21,363 (December 31, 2016 – 21,655) shares issued and outstanding (Note 4)
2
2
Common stock, 15,000,000,000 shares authorized at par value of $0.0001, 1,847,008,214 (December 31, 2016 – 1,068,031,823) shares issued and outstanding (Note 4)
184,701
106,803
Additional paid-in capital
10,424,715
9,609,198
Common stock subscriptions receivable (Note 8)
(4,500 )
(4,500 )
Deficit
(16,115,733 )
(13,500,287 )
Total Stockholders' Deficit
(5,510,815 )
(3,788,784 )
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT
$ 46,937
$ 162,776
The accompanying notes are an integral part of these consolidated financial statements.
2
FRIENDABLE, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(Expressed in US dollars)
(Unaudited)
Three Months Ended June 30, 2017
$
Three Months Ended June 30, 2016
$
Six Months
Ended June 30, 2017
$
Six Months
Ended June 30, 2016
$
REVENUES
2,535
7,189
5,578
18,580
OPERATING EXPENSES
Accretion and interest expense (Note 10)
805,129
570,789
1,451,393
1,178,796
App hosting (Note 8)
142,826
80,473
277,826
228,552
Commissions
760
2,157
1,673
5,544
Financing costs
-
37,768
-
75,458
General and administrative (Note 8)
227,578
270,391
459,379
460,723
Product development (Note 8)
42,050
64,113
92,450
159,234
Sales and marketing
63,809
557,098
163,303
772,601
TOTAL OPERATING EXPENSES
1,282,152
1,582,789
2,446,024
2,880,908
LOSS FROM OPERATIONS
(1,279,617 )
(1,575,600 )
(2,440,446 )
(2,862,328 )
OTHER EXPENSES
Loss on investment (Note 11)
-
-
(175,000 )
-
NET LOSS AND COMPREHENSIVE LOSS
(1,279,617 )
(1,575,600 )
(2,615,446 )
(2,862,328 )
BASIC LOSS PER SHARE
(0.00 )
(0.00 )
(0.00 )
(0.01 )
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING
1,682,777,754
425,129,047
1,491,502,113
340,742,364
The accompanying notes are an integral part of these consolidated financial statements.
3
FRIENDABLE, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIENCY
FOR THE PERIOD FROM DECEMBER 31, 2015 TO JUNE 30, 2017
(Expressed in US dollars)
(Unaudited)
Common Stock
#
Common Stock Amount
Preferred
#
Preferred Stock Amount
Additional Paid-in Capital
Common Stock Subscriptions
Deficit
Total
Balance December 31, 2015
218,977,542
$ 21,898
22,165
$ 2
$ 5,697,308
$ (4,500 )
$ (7,387,048 )
$ (1,672,340 )
Shares issued for services
65,465,714
6,547
—
—
231,545
—
—
238,092
Conversion of convertible notes (Note 10)
652,069,721
65,207
—
—
311,248
—
—
376,455
Conversion of preferred shares (Note 4)
104,524,944
10,452
(510 )
—
(10,452 )
—
—
—
Issuance of convertible notes (net) (Note 10)
—
—
—
—
2,882,248
—
—
2,882,248
Exercise of warrants
26,993,902
2,699
—
—
(2,699 )
—
—
—
Debt forgiveness (Note 8)
—
—
—
—
500,000
—
—
500,000
Net loss for the year
—
—
—
—
—
—
(6,113,239 )
(6,113,239 )
Balance December 31, 2016
1,068,031,823
$ 106,803
21,655
$ 2
$ 9,609,198
$ (4,500 )
$ (13,500,287 )
$ (3,788,784 )
Shares issued for services
4,720,000
472
—
—
8,968
—
—
9,440
Conversion of convertible notes (Note 10)
599,157,030
59,916
—
—
229,568
—
—
289,484
Conversion of preferred shares (Note 4)
175,099,361
17,510
(293 )
—
(17,510 )
—
—
—
Issuance of convertible notes (net) (Note 10)
—
—
—
—
594,491
—
—
594,491
Net loss for the period
—
—
—
—
—
—
(2,615,446 )
(2,615,446 )
Balance June 30, 2017
1,847,008,214
$ 184,701
21,362
$ 2
$ 10,424,715
$ (4,500 )
$ (16,115,733 )
$ (5,510,815 )
The accompanying notes are an integral part of these consolidated financial statements.
4
FRIENDABLE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in US dollars)
(Unaudited)
Six months ended
June 30, 2017
Six months ended
June 30, 2016
Cash Flows from Operating Activities:
Net loss
$ (2,615,446 )
$ (2,862,328 )
Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities:
Interest on convertible debentures
216,601
97,903
Accretion expense
1,234,790
1,073,925
Shares issued for services
9,440
77,034
Loss on investment
175,000
-
Changes in Operating Assets and Liabilities
Decrease (Increase) in accounts receivable
(63 )
2,430
Increase in prepaid expenses
(3,900 )
-
Increase (decrease) in accounts payable
312,714
251,481
Net Cash Used in Operating Activities
(670,864 )
(1,359,555 )
Cash Flows Used in Investing Activities:
Investment in Hang With
(175,000 )
-
Net Cash Used in Investing Activities
(175,000 )
-
Cash Flows from Financing Activities:
Proceeds from convertible debentures (net)
726,060
1,457,271
Net Cash Provided by Financing Activities
726,060
1,457,271
Net Increase(Decrease) in Cash
(119,804 )
97,716
Cash on Hand – Beginning
119,804
15,880
Cash on Hand – Ending
$ -
$ 113,596
Supplemental Cash Flow Information:
Cash paid for interest
$ —
$ —
Cash paid for income taxes
$ —
$ —
Non-cash Investing and Financing Items:
Shares issued for conversion of debt (net)
$ -
$ 109,980
Convertible debentures issued to extinguish promissory notes
$ -
$ -
The accompanying notes are an integral part of these consolidated financial statements.
5
FRIENDABLE, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
FOR THE PERIOD JUNE 30, 2017
(Expressed in US dollars)
1. NATURE OF BUSINESS AND GOING CONCERN
Friendable, Inc., a Nevada corporation (the “Company”), was incorporated in the State of Nevada as Digital Yearbook Inc. Effective June 15, 2011, the Company completed a merger with its subsidiary, Titan Iron Ore Corp., a Nevada corporation, which was incorporated solely to effect a change in the Company’s name from “Digital Yearbook Inc.” to “Titan Iron Ore Corp.” The Company then began to pursue business in the area of mining exploration.
On February 3, 2014, the Company entered into an Agreement and Plan of Merger and Reorganization (the “Merger”) with iHookup Operations Corp., a wholly-owned Delaware subsidiary of the Company (“Acquisition Sub”) and iHookup-DE, whereby iHookup-DE was the surviving entity and became the wholly-owned subsidiary of the Company. iHookup-DE’s former stockholders exchanged all of their 6,000 shares of outstanding common stock for 25,000 shares of the Company’s designated Series A Preferred Stock.
The Merger was regarded as a reverse recapitalization whereby iHookup-DE was considered to be the accounting acquirer as its stockholders retained control of the Company after the Merger. On February 3, 2014, the Merger was completed and as a result, iHookup-DE acquired the net liabilities of the Company.
As a result of the Merger, the Company ceased its prior operations and its business became the development and dissemination of a “proximity based” mobile-social media application that facilitates connections between people, utilizing the intelligence of global positioning system and localized recommendations.
On September 28, 2015, the Company filed a Certificate of Amendment to its Articles of Incorporation changing the name of the Company from “iHookup Social, Inc.” to “Friendable, Inc.” . On October 27, 2015, the Company’s trading symbol on the OTC Pink marketplace was changed from “HKUP” to “FDBL”. This change was made in conjunction with the re-branding of the Company’s app from "iHookup Social" to "Friendable".
On May 31, 2017, the Company filed an Amendment to its Articles of Incorporation increasing the authorized common stock from 10,000,000,000 to 15,000,000,000 shares. On June 28, 2017, the Company incorporated a subsidiary, Fan Pass Inc., a Nevada corporation, which was incorporated to hold all of the assets of the mobile application “Fan Pass Live” (Note 13(b)).
The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which implies that the Company would continue to realize its assets and discharge its liabilities in the normal course of business. The Company has never paid any dividends and is unlikely to pay dividends or generate earnings in the immediate or foreseeable future. As of June 30, 2017, the Company has a working capital deficiency of $5,545,815 and has an accumulated deficit of $16,115,733 since inception and its operations continue to be funded primarily from sales of its stock and issuance of convertible debentures. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company’s ability to obtain the necessary financing through the issuance of convertible notes and equity instruments. The consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
Management plans to raise financing through the issuance of convertible notes. No assurance can be given that any such additional financing will be available, or that it can be obtained on terms acceptable to the Company and its stockholders.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
These consolidated financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States, and are expressed in US dollars. The Company’s fiscal year end is December 31.
Interim financial statements
The unaudited interim consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim consolidated financial information and with the instructions for Securities and Exchange Commission (“SEC”) Form 10-Q and they do not include all of the information and footnotes required by generally accepted accounting principles for complete consolidated financial statements. Therefore, these consolidated financial statements should be read in conjunction with the Company’s audited annual consolidated financial statements and notes thereto for the year ended December 31, 2016, included in the Company’s Annual Report on Form 10-K filed on April 17, 2017, with the SEC.
In the opinion of management, all adjustments (consisting of normal and recurring accruals) considered necessary for fair presentation of the Company’s financial position, results of operations and cash flows have been included. Operating results for the six months ended June 30, 2017, are not necessarily indicative of the results that may be expected for future quarters or the year ending December 31, 2017.
6
FRIENDABLE, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
FOR THE PERIOD JUNE 30, 2017
(Expressed in US dollars)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Use of Estimates
The preparation of these statements in accordance with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses in the reporting period. The Company regularly evaluates estimates and assumptions related to the useful life and recoverability of long-lived assets, valuation of convertible debenture conversion options, deferred income tax asset valuations, financial instrument valuations, share-based payments, other equity-based payments, and loss contingencies. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.
Revenue Recognition
Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable, and collectability is probable. Revenue generally is recognized net of allowances for returns and any taxes collected from customers and subsequently remitted to governmental authorities. The Company derives revenues from the sale of application software, unlimited messaging subscriptions for periods varying from one to twelve months, and arrangements for virtual gifts and access to special features referred to as coin packs. Revenue from the sale of application software is recognized upon download. Revenue from messaging subscriptions is recognized as revenue ratably over the subscription period beginning on the date the service is made available to customers. Revenue from coin packs is recognized on a consumption basis commensurate with the customer utilization of such resources.
Advertising Costs
The Company’s policy regarding advertising is to expense advertising when incurred. During the six months ended June 30, 2017, the Company incurred $25,207 (June 30, 2016: $560,925) in advertising costs.
Cash and Cash Equivalents
The Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents.
Intangible Assets
The Company accounts for intangible assets in accordance with ASC 350, Intangibles – Goodwill and Other. The Company assesses potential impairments to intangible assets when there is evidence that events or changes in circumstances indicate that the carrying amount of an asset may not be recovered.
Intangible assets with finite lives are reviewed for impairment when events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of intangible assets with finite lives is measured by comparing the carrying amount of the asset to its fair value. If the future value of the asset is lower than its carrying value, the Company recognizes an impairment loss for the amount by which the carrying value of the asset exceeds the related estimated fair value.
Intangible assets with indefinite lives are tested for impairment annually or more frequently are tested for impairment annually or more frequently if events or changes in circumstances indicate that it is more likely than not that the intangible asset is impaired.
Impairment of Long-Lived Assets
The Company continually monitors events and changes in circumstances that could indicate carrying amounts of long-lived assets may not be recoverable. When such events or changes in circumstances are present, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows.
If the total of the future cash flows is less than the carrying amount of those assets, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or the fair value less costs to sell.
7
FRIENDABLE, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
FOR THE PERIOD JUNE 30, 2017
(Expressed in US dollars)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Stock-based Compensation
The Company records stock-based compensation in accordance with ASC 718, Compensation – Stock Based Compensation and ASC 505, Equity Based Payments to Non-Employees, which requires the measurement and recognition of compensation expense based on estimated fair values for all share-based awards made to employees and directors, including stock options.
ASC 718 requires companies to estimate the fair value of share-based awards on the date of grant using an option-pricing model. The Company uses the Black-Scholes option pricing model as its method in determining fair value. This model is affected by the Company’s stock price as well as assumptions regarding a number of subjective variables. These subjective variables include, but are not limited to the Company’s expected stock price volatility over the terms of the awards, and actual and projected employee stock option exercise behaviors. The value of the portion of the award that is ultimately expected to vest is recognized as an expense in the statement of comprehensive loss over the requisite service period.
All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable.
Allowance for Doubtful Accounts
The Company monitors its outstanding receivables for timely payments and potential collection issues. During the six months ended June 30, 2017 and 2016, the Company did not have any allowance for doubtful accounts.
Financial Instruments
Financial assets and financial liabilities are recognized in the balance sheet when the Company has become party to the contractual provisions of the instruments.
The Company’s financial instruments consist of cash, accounts receivable, accounts payable, and convertible debentures. The fair values of these financial instruments approximate their carrying value, due to their short term nature, and current market rates for similar financial instruments. Fair value of a financial instrument is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company’s financial instruments recorded at fair value in the balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair value.
Basic and Diluted Loss Per Share
The Company computes net loss per share in accordance with ASC 260, Earnings per Share. ASC 260 requires presentation of both basic and diluted earnings per share (EPS) on the face of the statement of comprehensive loss. Basic EPS is computed by dividing net income (loss) available to common stockholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive.
As of June 30, 2017, there were approximately 23,031,079,718 potentially dilutive shares outstanding.
Income Taxes
The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, Income Taxes. The asset and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities and for operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.
8
FRIENDABLE, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
FOR THE PERIOD JUNE 30, 2017
(Expressed in US dollars)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Recent Accounting Pronouncements
In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”). ASU 2014-09 supersedes the revenue recognition requirements in ASC Topic 605, “Revenue Recognition” and some cost guidance included in ASC Subtopic 605-35, Revenue Recognition -Construction-Type and Production-Type Contracts”. ASU 2014-09 requires the disclosure of sufficient information to enable users of the financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. The Company will also be required to disclose information regarding significant judgments and changes in judgments, and assets recognized from costs incurred to obtain or fulfill a contract. Early adoption is not allowed. ASU 2014-09 provides two methods of retrospective application. The first method would require the Company to apply ASU 2014-09 to each prior reporting period presented. The second method would require the Company to retrospectively apply with the cumulative effect of initially applying ASU 2014-09 recognized at the date of initial application. The Company is currently evaluating the impact that the adoption of ASU 2014-09 may have on its consolidated financial statements.
3. INTANGIBLE ASSETS
As at June 30, 2017, the Company owns the Friendable Properties which includes domain names, logos, icons, and registered trademarks for which it paid cash consideration of $35,000.
4. COMMON AND PREFERRED STOCK
Common Stock:
Issued during 2017
During the six months ended June 30, 2017, the Company issued 599,157,030 shares of common stock to various convertible note holders for full and partial conversion of the notes (Note 10).
During the six months ended June 30, 2017, the Company issued 4,720,000 shares of common stock to consultants as payment for finder’s fees.
During the six months ended June 30, 2017, the Company issued 175,099,361 shares of common stock to various Series A preferred stockholders on conversion of 293 preferred shares.
Preferred Stock:
The Series A Preferred Stock is convertible into nine (9) times the number of common stock outstanding until the closing of a Qualified Financing (i.e. the sale and issuance of the Company’s equity securities that results in gross proceeds in excess of $2,500,000). The number of shares of common stock issued on conversion of preferred stock is based on the ratio of the number of shares of preferred stock converted to the total number of shares of preferred stock outstanding at the date of conversion multiplied by nine (9) times the number of common stock outstanding at the date of conversion.
5. SHARE PURCHASE WARRANTS
Details of share purchase warrants during the six months ended June 30, 2017 are:
Weighted Average
Number
Exercise
of
Warrants
Price
$
Balance, December 31, 2016
978,335,757
0.005
Warrants issued
118,000,000
0.003
Balance, June 30, 2017
1,096,335,757
0.004
9
FRIENDABLE, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
FOR THE PERIOD JUNE 30, 2017
(Expressed in US dollars)
6. STOCK-BASED COMPENSATION
On November 22, 2011, the Board of Directors of the Company. (see Note 1) approved a stock option plan (“2011 Stock Option Plan”), the purpose of which is to enhance the Company’s stockholder value and financial performance by attracting, retaining and motivating the Company’s officers, directors, key employees, consultants and its affiliates and to encourage stock ownership by such individuals by providing them with a means to acquire a proprietary interest in the Company’s success through stock ownership. Under the 2011 Stock Option Plan, officers, directors, employees and consultants who provide services to the Company may be granted options to acquire common shares of the Company. The aggregate number of options authorized by the plan shall not exceed 4,974 shares of common stock of the Company.
The following table summarizes the options outstanding and exercisable under the 2011 Stock Option Plan as of June 30, 2017:
Option Price
Expiry Date
Per Share($)
Number
December 21, 2021
1,680
1,725
June 21, 2022
400
500
June 25, 2023
134
850
$ 1,044
3,075
The Board of Directors and the stockholders holding a majority of the voting power approved a 2014 Equity Incentive Plan (the “2014 Plan”) on February 28, 2014, with a to be determined effective date. The purpose of the 2014 Plan is to assist the Company and its affiliates in attracting, retaining and providing incentives to employees, directors, consultants and independent contractors who serve the Company and its affiliates by offering them the opportunity to acquire or increase their proprietary interest in the Company and to promote the identification of their interests with those of the stockholders of the Company. The 2014 Plan will also be used to make grants to further reward and incentivize current employees and others.
There are 120,679 shares of common stock reserved for issuance under the 2014 Plan. The Board shall have the power and authority to make grants of stock options to employees, directors, consultants and independent contractors who serve the Company and its affiliates. Any stock options granted under the 2014 Plan shall have an exercise price equal to or greater than the fair market value of the Company’s shares of common stock. Unless otherwise determined by the Board of Directors, stock options shall vest over a four-year period with 25% being vested after the end of one (1) year of service and the remainder vesting equally over a 36-month period. The Board may award options that may vest based upon the achievement of certain performance milestones. As of June 30, 2017, no options have been awarded under the 2014 Plan.
The following table summarizes the Company’s stock options outstanding and exercisable:
Number of Options
Weighted Average Exercise Price
Weighted- Average Remaining Contractual Term (years)
$
Aggregate Intrinsic Value
$
Outstanding and exercisable, December 31, 2016
3,075
1,044
6.57
-
Outstanding and exercisable, June 30, 2017
3,075
1,044
6.07
-
7. COMMITMENTS
The following table summarizes the Company’s significant contractual obligations as of June 30, 2017:
$
Employment Agreements (1)
150,000
(1) Employment agreements with related parties.
10
FRIENDABLE, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
FOR THE PERIOD JUNE 30, 2017
(Expressed in US dollars)
8. RELATED PARTY TRANSACTIONS AND BALANCES
During the six months ended June 30, 2017, the Company incurred $244,067 (2016: 221,723) in salaries to officers and directors with such costs being recorded as general and administrative expenses.
During the six months ended June 30, 2017, the Company incurred $399,826 (2016: $408,552) in app hosting, app development and rent to a company with two officers and directors in common with such costs being recorded as app hosting, product development and general and administrative expenses, respectively.
As of June 30, 2017, the Company had a stock subscription receivable totaling $4,500 (December 31, 2016: $4,500) from an officer and director and from a company with an officer and director in common.
As of June 30, 2017, accounts payable includes $313,634 (December 31, 2016: $234,058) payable to a company with two officers and directors in common, and $310,833 (December 31, 2015: $215,000) payable in salaries to directors and officers of the Company. The amounts are unsecured, non-interest bearing and are due on demand.
During the year ended December 31, 2016, two officers forgave debt totaling $200,000 and a company controlled by three officers (December 31, 2016: two officers) of the Company forgave debt totaling $300,000. The debt forgiveness was considered a capital transaction and therefore $500,000 was recorded as an increase in additional paid-in capital as of December 31, 2016 .
The above transactions were recorded at their exchange amounts, being the amounts agreed by the related parties.
9. FAIR VALUE MEASUREMENTS
ASC 820, Fair Value Measurements and Disclosures, require an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value:
Level 1
Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. Valuations are based on quoted prices that are readily and regularly available in an active market and do not entail a significant degree of judgment.
Level 2
Level 2 applies to assets or liabilities for which there are other than Level 1 observable inputs such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.
Level 2 instruments require more management judgment and subjectivity as compared to Level 1 instruments. For instance: determining which instruments are most similar to the instrument being priced requires management to identify a sample of similar securities based on the coupon rates, maturity, issuer, credit rating and instrument type, and subjectively select an individual security or multiple securities that are deemed most similar to the security being priced; and determining whether a market is considered active requires management judgment.
Level 3
Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. The determination of fair value for Level 3 instruments requires the most management judgment and subjectivity.
Pursuant to ASC 825, cash is based on Level 1 inputs. The Company believes that the recorded values of accounts receivable and accounts payable approximate their current fair values because of their nature or respective relatively short durations. The fair value of the Company’s convertible debentures approximates their carrying values as the underlying imputed interest rates approximates the estimated current market rate for similar instruments.
As of June 30, 2017, there were no assets or liabilities measured at fair value on a recurring basis presented on the Company’s balance sheet, other than cash.
11
FRIENDABLE, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
FOR THE PERIOD JUNE 30, 2017
(Expressed in US dollars)
10. CONVERTIBLE DEBENTURES
Current Convertible Debentures:
Conversion Feature
Issuance
Net Principal ($)
Discount ($)
Carrying Value ($)
Interest Rate
Maturity Date
a
)
2-Apr-13
5,054
-
5,054
0
%
2-Jan-14
b
)
5-Aug-15
750,000
-
750,000
7
%
5-Feb-17
b
)
5-Aug-15
18,750
-
18,750
7
%
5-Feb-17
d
)
17-Feb-15
102,135
-
102,135
8
%
17-Feb-16
d
)
17-Feb-15
5,000
-
5,000
8
%
17-Feb-16
c
)
27-Feb-15
37,500
-
37,500
8
%
27-Feb-16
d
)
19-Mar-15
53,551
-
53,551
8
%
19-Mar-16
d
)
19-Mar-15
8,000
-
8,000
8
%
19-Mar-16
c
)
11-May-15
50,000
-
50,000
8
%
10-May-16
d
)
2-Jun-15
29,500
-
29,500
8
%
1-Jun-16
d
)
2-Jun-15
45,966
-
45,966
8
%
1-Jun-16
d
)
2-Jun-15
10,000
-
10,000
8
%
1-Jun-16
d
)
2-Jun-15
58,540
-
58,540
8
%
1-Jun-16
d
)
2-Jun-15
35,408
-
35,408
8
%
1-Jun-16
d
)
2-Jun-15
20,758
-
20,758
8
%
1-Jun-16
c
)
11-Jun-15
50,000
-
50,000
8
%
10-Jun-16
d
)
16-Jun-15
30,464
-
30,464
8
%
15-Jun-16
d
)
19-Jun-15
30,000
-
30,000
8
%
18-Jun-16
d
)
19-Jun-15
35,408
-
35,408
8
%
18-Jun-16
c
)
24-Jun-15
37,500
-
37,500
8
%
23-Jun-16
d
)
24-Jun-15
35,000
-
35,000
8
%
23-Jun-16
c
)
24-Jun-15
37,500
-
37,500
8
%
23-Jun-16
d
)
7-Jul-15
75,000
-
75,000
8
%
7-Oct-15
d
)
1-Aug-15
17,408
-
17,408
8
%
4-Aug-16
d
)
1-Aug-15
30,000
-
30,000
8
%
1-Aug-16
d
)
1-Aug-15
35,408
-
35,408
8
%
1-Aug-16
d
)
21-Sep-15
64,744
-
64,744
8
%
21-Sep-16
b
)
3-May-16
50,000
-
50,000
8
%
3-May-17
c
)
3-May-16
50,000
-
50,000
8
%
3-May-17
d
)
3-May-16
29,500
-
29,500
8
%
3-May-17
d
)
3-May-15
45,965
-
45,965
8
%
3-May-17
b
)
24-May-16
61,571
-
61,571
8
%
24-May-17
d
)
24-May-16
30,464
-
30,464
8
%
24-May-17
b
)
26-May-16
157,500
-
157,500
8
%
26-May-17
d
)
15-Jun-16
5,000
-
5,000
8
%
15-Jun-17
b
)
2-Jun-16
160,000
96,646
63,354
7
%
2-Jun-17
b
)
2-Jun-16
4,000
2008
1,992
7
%
2-Jun-17
12
FRIENDABLE, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
FOR THE PERIOD JUNE 30, 2017
(Expressed in US dollars)
10. CONVERTIBLE DEBENTURES (CONTINUED)
b
)
15-Jun-16
50,000
26,567
23,433
7
%
15-Jun-17
b
)
15-Jun-16
1,250
508
742
7
%
15-Jun-17
b
)
17-May-16
100,000
55,842
44,158
7
%
8-Sep-17
b
)
17-May-16
2,500
1,124
1,376
7
%
8-Sep-17
b
)
19-May-16
110,000
62,401
47,599
7
%
8-Sep-17
b
)
19-May-16
2,750
1,265
1,485
7
%
8-Sep-17
b
)
27-Jan-16
249,480
5,149
244,331
7
%
27-Jul-17
b
)
8-Mar-16
110,000
56,860
53,140
7
%
8-Sep-17
b
)
27-Jan-16
16,143
-
16,143
7
%
27-Jul-17
b
)
8-Mar-16
5,000
1,304
3,696
7
%
8-Sep-17
b
)
8-Mar-16
90,000
45,284
44,716
7
%
8-Sep-17
b
)
7-Jul-16
50,000
27,707
22,293
7
%
8-Sep-17
b
)
4-Aug-16
110,000
69,515
40,485
7
%
8-Sep-17
b
)
15-Aug-16
157,000
104,347
52,653
7
%
8-Sep-17
b
)
12-Sep-16
83,000
53,876
29,124
7
%
8-Sep-17
b
)
7-Jul-16
1,250
533
717
7
%
8-Sep-17
b
)
4-Aug-16
2,750
1,431
1,319
7
%
8-Sep-17
b
)
15-Aug-16
3,925
2,200
1,725
7
%
8-Sep-17
b
)
12-Sep-16
2,075
1,100
975
7
%
8-Sep-17
b
)
4-Aug-16
110,000
54,085
55,915
7
%
4-Aug-17
b
)
15-Aug-16
157,500
92,111
65,389
7
%
15-Aug-17
b
)
8-Sep-16
80,000
51,306
28,694
7
%
8-Sep-17
b
)
11-Nov-16
80,000
68,117
11,883
7
%
11-Nov-17
b
)
6-Dec-16
88,000
78,504
9,496
7
%
6-Dec-17
b
)
9-Jan-17
84,000
78,209
5,791
7
%
9-Jan-18
b
)
3-Mar-17
32,000
30,182
1818
7
%
3-Mar-18
c
)
2-Feb-17
159,750
154,449
5,301
8
%
2-Feb-17
c
)
15-Mar-17
96,000
93,473
2,527
8
%
15-Mar-18
b
)
7-Oct-16
465,000
451,260
13,740
7
%
7-Apr-18
b
)
7-Nov-16
285,036
209,592
75,444
7
%
7-May-18
b
)
12-Dec-16
287,444
68,160
219,284
7
%
12-Jun-18
b
)
18-Jan-17
284,057
109,480
174,577
7
%
7-Apr-18
b
)
7-Apr-17
25,000
23,757
1,243
8
%
7-Apr-18
b
)
3-May-17
27,000
25,998
1,002
8
%
3-May-18
c
)
5-May-17
30,000
28,997
1,003
8
%
5-May-18
b
)
2-Jun-17
27,000
26,257
743
8
%
2-Jun-18
5,767,504
2,259,604
3,507,900
a) The conversion price per share equal to the lower of:
i. 100% of the average price of the Company’s common stock for the 5 trading days preceding the conversion date;
ii. 70% of the daily average price of the Company’s common stock for the 10 trading days preceding the conversion date.
b) The conversion price is a range of $0.0025-$0.0078.
c) The conversion price equal to 50% of the lowest closing bid price of the Company’s common stock in the 20-25 trading days prior to the conversion.
d) The conversion price of $0.0005.
13
FRIENDABLE, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
FOR THE PERIOD JUNE 30, 2017
(Expressed in US Dollars)
10. CONVERTIBLE DEBENTURES (CONTINUED)
During the six months ended June 30, 2017, the Company received net proceeds from convertible debentures of $726,060.
During the six months ended June 30, 2017, $289,484 of convertible debentures were settled by issuing 599,157,030 shares of common stock of the Company.
During the six months ended June 30, 2017, the Company incurred $40,250 in transaction costs in connection with the issuance of the convertible debentures that have been offset against the carrying values of the related debentures on the issuance date.
During the six months ended June 30, 2017, the Company incurred $1,451,393 in accretion and interest expense in connection with the convertible debentures.
At June 30, 2017, convertible debentures with the principal amount of $5,757,504 are subject to a General Security Agreement covering substantially all of the Company’s assets.
The Company has evaluated whether separate financial instruments with the same terms as the conversion features above would meet the characteristics of a derivative instrument as described in paragraphs ASC 815-15-25. The terms of the contracts do not permit net settlement, as the shares delivered upon conversion are not readily convertible to cash. The Company’s trading history indicated that the shares are thinly traded and the market would not absorb the sale of the shares issued upon conversion without significantly affecting the price. As the conversion features would not meet the characteristics of a derivative instrument as described in ASC 815-15-25, the conversion features are not required to be separated from the host instrument and accounted for separately. As a result, at June 30, 2017 the conversion features and non-standard anti-dilutions provisions would not meet derivative classification.
Convertible debentures with maturity dates prior to June 30, 2017 are now due on demand.
11. LOSS ON INVESTMENT AND INTANGIBLE ASSET
On October 7, 2016, t he Company entered into a Securities Purchase Agreement (the “Alpha SPA”) with Alpha Capital Anstalt (“Alpha Capital”), to issue and sell up to, in principal amount, $1,615,000 of convertible notes, payable in four tranches (the “Alpha Notes”). The first tranche of $465,000 was funded on October 7, 2016 (the “Initial Closing Date”) and the second, third, and fourth tranches of $375,000 were funded, respectively, during the first week of each of November 2016, December 2016, and January 2017 (the subsequent closing dates and, with the Initial Closing Date, each a “Closing”).
The Company used a portion of the proceeds of each Closing to purchase Series A Convertible Participating Preferred Stock of a private entity named Hang With, Inc. (“Hang With”). Alpha Capital is currently Hang With’s majority shareholder. On October 7, 2016, the Company entered into a Securities Purchase Agreement with Hang With (the “Hang With SPA”) to buy up to 330,397 shares of Hang With’s Series A Convertible Participating Preferred Stock (the “Preferred Stock”) for $750,000. On the Initial Closing Date, the Company paid $225,000 and was to receive 99,118 shares of Preferred Stock. The Company paid Hang With $175,000 on each of the subsequent three Closings. In connection with entering into the Hang With SPA, the Company and Hang With entered into a Software License Agreement (the “License Agreement”) in which Hang With is licensing the intellectual property of the Hang With apps to the Company. As part of the Hang With SPA and as compensation for the Company entering into the License Agreement and the future development agreement, Hang With was to issue 154,185 shares of Preferred Stock on the Initial Closing Date, and was to issue 100,000 shares of its common stock to the Company.
The Company attributed much of the value of Hang With to Hang With management’s representation that, in the history of its own apps, it had a certain amount of total users and a range of monthly active users. Hang With believed, prior to the Hang With SPA being signed, that, with the Company’s investment, the monthly active users would be at the higher end of the range within a short period of time. Based on these representations by management the Company believed that it could specifically market its own apps to the minimum monthly active users of the Hang With app that Hang With management’s represented existed.
The Company believes that, after the November 2016 Closing, the Hang With app was removed for a period of time from the app stores on which it appeared and that the app was shut down for a period of time. At this point, Hang With effectively had zero monthly active users. In addition, the Company was not able to utilize Hang With’s technology in the Friendable app as was contemplated by the License Agreement due to Hang With’s technology being, in the Company’s view, out of date. The Company is currently seeking to negotiate a settlement with Hang With regarding the Company’s claims against Hang With.
As of December 31, 2016 Hang With had not delivered any of the preferred or common shares to the Company. During the year ended December 31, 2016, the Company had paid Hang With $575,000 which has been written off as a loss on investment. During the six months ended June 30, 2017, the Company had paid Hang With $175,000 in connection to the fourth Closing which has been written off as a loss on investment.
14
FRIENDABLE, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
FOR THE PERIOD JUNE 30, 2017
(Expressed In US Dollars)
12. LOSS ON SETTLEMENT AGREEMENT
The Company and Joseph Canouse had been in a dispute regarding what amount, if any, was owed pursuant to a consulting agreement between the parties signed on April 1, 2014. On December 7, 2016, Mr. Canouse obtained a judgment in state court in Georgia in the amount of $82,931 and the right to garnish the Company’s bank accounts. On April 7, 2017, the Company entered into a Settlement Agreement with Mr. Canouse (the “Agreement”). Pursuant to the Agreement, the Company agreed to issue an 8% Convertible Note (the “Note”) in the principal amount of $82,931 to an entity controlled by Mr. Canouse. Under the terms of the Agreement, in return for the issuance of the Note, Mr. Canouse will file a Consent Motion to Withdraw Judgment, dismiss all garnishments, and cease all collection activities. As of December 31, 2016, the Company recorded a loss on settlement agreement of $82,931 and accrued a corresponding liability. As of June 30, 2017, the Note has not been issued.
13. SUBSEQUENT EVENTS
a)
Subsequent to June 30, 2017, the Company issued 118,500,000 shares of common stock in connection with service agreements.
b)
On July 21, 2017, the Company entered into a Securities Purchase Agreement (the “Alpha SPA”) with Alpha Capital Anstalt (“Alpha Capital”), to issue and sell up to, in principal amount, $500,000 of convertible notes, payable in two tranches (the “Alpha Notes”). The first tranche of $300,000 was funded on July 21, 2017 (the “Initial Closing Date”). The second tranche of $200,000 will be upon effectiveness of the registration statement of Fan Pass Inc. and trading of common stock which is not later than 9 months after first closing. The Alpha Notes are senior to all current and future indebtedness of the Company except as agreed to by the parties. The conversion price of the notes will be the lowest conversion price of any instrument issued by the Company. The Alpha Notes are long-term debt obligations that are material to the Company. The Alpha Notes also contain certain representations, warranties, covenants and events of default. In the event of default, at the option of Alpha Capital and in their sole discretion, Alpha Capital may consider the Alpha Note’s immediately due and payable.
In connection with the Alpha Notes and Alpha SPA, the Company also entered into a Pledge Agreement whereby as collateral security, the Company pledged shares of common stock of its subsidiary, Fan Pass, Inc. The number of shares pledged will be determined at a later date. The Company also has pledged collateral to Alpha Capital in the form of the Fan Pass Security Agreement which grants a security interest in and to, a lien upon and a right of set-off against all of their respective right, title and interest to the assets of Fan Pass Inc, including all intellectual property. The Alpha Notes have a beneficial ownership limitation such that Alpha Capital can never own more than 4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon conversion of the Alpha Notes.
For its services as a placement agent for this transaction, Palladium Capital Advisors, LLC (“Palladium”) shall receive compensation of 8% of the aggregate purchase price paid in each Closing, the amount being $24,000 for the first closing. The Company has agreed to pay legal costs of $50,000 payable upon the First Closing, and an additional $50,000 upon the funding of the second tranche of $200,000, and $40,000 within thirty (30) days that Fan Pass, Inc. has a class of common stock registered pursuant to Section 12(g) of the Exchange Act.
15
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the consolidated financial statements and related notes thereto included in Item 1 “Financial Statements” in this Quarterly Report on Form 10-Q. This discussion contains forward-looking statements that involve risks and uncertainties. The Company’s actual results could differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those discussed in the section titled “Risk Factors” included elsewhere in this Quarterly Report on Form 10-Q.
Overview
We were incorporated in the State of Nevada on June 5, 2007. Effective June 15, 2011, we completed a merger with our subsidiary, Titan Iron Ore Corp., a Nevada corporation, which was incorporated solely to effect a change in our name to “Titan Iron Ore Corp.”
As of December 31, 2013, Titan Iron Ore Corp. was a mineral exploration company. Due to our inability to raise capital to further develop mining claims and pursue mineral exploration, we decided to exit the mining business and look for other opportunities.
On February 3, 2014, we completed a merger with iHookup Social, Inc., a Delaware corporation (“iHookup”) pursuant to an Agreement and Plan of Merger and Reorganization (the “Merger Agreement”) dated January 31, 2014. Pursuant to the Merger Agreement, we incorporated a new subsidiary called iHookup Operations Corp, a Delaware corporation, which merged with and into iHookup, causing the subsidiary’s separate existence to cease and iHookup to become a wholly-owned subsidiary of the Company. iHookup’s stockholders exchanged all of their twelve million (12,000,000) shares of outstanding common stock for fifty million (50,000,000) shares of the Company’s newly designated Series A Preferred Stock. Each share of common stock entitles its holder to one vote on each matter submitted to the stockholders. The holders of preferred stock are entitled to cast votes equal to the number of votes equal to the number of whole shares of common stock into which the shares of Series A Preferred Stock held by such holderare convertible. The total aggregate issued shares of Series A Preferred Stock at any given time regardless of their number shall be convertible into the number of shares of common stock which equals nine (9) times the total number of shares of common stock which are issued and outstanding at the time of any conversion, at the option of the preferred holders or until the closing of a Qualified Financing (i.e. the sale and issuance of our equity securities that results in gross proceeds in excess of $2,500,000) at one time or in the same round. As a result of the transaction, the former Friendable stockholders received a controlling interest in the Company due to the voting rights of the Series A Preferred Stock being connected to their super-majority conversion rights.
On May 31, 2017, the Company filed an Amendment to its Articles of Incorporation increasing the authorized common stock from 10,000,000,000 to 15,000,000,000 shares. On June 28, 2017, the Company incorporated a subsidiary, Fan Pass Inc., a Nevada corporation, which was incorporated to hold all of the assets of the mobile application “Fan Pass Live”.
The Company is a mobile-social technology company focused on connecting and engaging users through two distinct applications that expand beyond today’s limitations: Friendable and Fan Pass.
The Company’s first product is the Friendable app , a mobile social application for mobile devices where users can create one-on-one or group-style meet-ups for food, drinks, live music, or any other occasion. Since its inception in 2013, Friendable has generated more than 1 million downloads, 700,000 registered users, and 580,000 user profiles, and has been featured in popular music videos such as the 2016 hit “Ain’t Your Mama” by singer Jennifer Lopez (over 390 million views on YouTube). We seek to expand the application’s current user base while continuously updating functionalities to best enhance the user experience.
In 2017, the Company intends to release Fan Pass , a live streaming video application where fans can watch exclusive back-stage and uncensored video content from their favorite performing artists and celebrities. The Company is currently establishing partnerships with prominent artists including Austin Mahone, Meghan Trainor, Fetty Wap, and more. Through these celebrity partnerships, the Company believes Fan Pass will convert immense, built-in fan bases into the application’s initial viewership base, making quick and large scalability a real option.
16
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - continued
Results of Operations
Three Months Ended June 30, 2017
$
Three Months Ended June 30, 2016
$
Six Months
Ended June 30, 2017
$
Six Months
Ended June 30, 2016
$
REVENUES
2,535
7,189
5,578
18,580
OPERATING EXPENSES
Accretion and interest expense
805,129
570,789
1,451,393
1,178,796
App hosting
142,826
80,473
277,826
228,552
Commissions
760
2,157
1,673
5,544
Financing costs
-
37,768
-
75,458
General and administrative
227,578
270,391
459,379
460,723
Product development
42,050
64,113
92,450
159,234
Sales and marketing
63,809
557,098
163,303
772,601
TOTAL OPERATING EXPENSES
1,282,152
1,582,789
2,446,024
2,880,908
LOSS FROM OPERATIONS
(1,279,617 )
(1,575,600 )
(2,440,446 )
(2,862,328 )
OTHER EXPENSES
Loss on investment
-
-
(175,000 )
-
NET LOSS AND COMPREHENSIVE LOSS
(1,279,617 )
(1,575,600 )
(2,615,446 )
(2,862,328 )
For the three months ended June 30, 2017 compared to June 30, 2016
Revenues
The Company had revenue of $2,535 and $7,189 during the three months ended June 30, 2017 and 2016, respectively, a decrease of 65%. The decrease in revenue was due to the Company’s effort to increase shareholder value by reducing subscriptions fees and adding to the registered user base.
Accretion and interest expense
Accretion and interest expenses were incurred in the amount of $805,129 and $570,789 for the three months ended June 30, 2017 and 2016, respectively. The increase is attributable to more convertible notes.
App hosting
App hosting expenses were incurred in the amount of $142,826 and $80,473 for the three months ended June 30, 2017 and 2016, respectively. The increase is attributable to more registered users of the app.
General and Administrative Expenses
General and administrative expenses were incurred in the amount of $227,578 and $270,391 for the three months ended June 30, 2017 and 2016, respectively. Expenses were higher in 2016 due to higher professional fees.
17
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - continued
Product Development Expenses
Product development expenses were incurred in the amount of $42,050 and $64,113 during the three months ended June 30, 2017 and 2016, respectively, a decrease of 34%. The decrease in product development expenses was due to reduced Android development.
Financing Expenses
During the three months ended June 30, 2017, financing expenses were $0 as compared to $37,768 during the three months ended June 30, 2016. The decrease in financing expenses was due to changes in accounting methods.
Sales and Marketing Expenses
Sales and marketing expenses were incurred in the amount of $63,089 and $557,098 during the three months ended June 30, 2017 and 2016, respectively. The decrease in sales and marketing expenses was due to reduced celebrity advertising expenditures.
Net Loss
The Company had a net loss for the three months ended June 30, 2017 of $1,279,617 as compared to a net loss of $1,575,600 for the three months ended June 30, 2016, a decrease of 19%. The decrease in net loss was due primarily to lower general and administrative and sales and marketing costs offset by higher accretion and interest and app hosting expenses.
For the six months ended June 30, 2017 compared to June 30, 2016
Revenues
The Company had revenue of $5,578 and $18,580 during the six months ended June 30, 2017 and 2016, respectively, a decrease of 70%. The decrease in revenue was due to the Company’s effort to increase shareholder value by reducing subscriptions fees and adding to the registered user base.
Accretion and interest expense
Accretion and interest expenses were incurred in the amount of $1,451,393 and $1,178,796 for the three months ended June 30, 2017 and 2016, respectively. The increase is attributable to more convertible notes.
App hosting
App hosting expenses were incurred in the amount of $277,826 and $228,552 for the three months ended June 30, 2017 and 2016, respectively. The increase is attributable to more registered users of the app.
General and Administrative Expenses
General and administrative expenses were incurred in the amount of $459,379 and $460,723 for the six months ended June 30, 2017 and 2016, respectively.
Product Development Expenses
Product development expenses were incurred in the amount of $92,450 and $159,234 during the six months ended June 30, 2017 and 2016, respectively, a decrease of 42%. The decrease in product development expenses was due to reduced Android development.
Financing Expenses
During the six months ended June 30, 2017, financing expenses were $0 as compared to $75,458 during the six months ended June 30, 2016. The decrease in financing expenses was due to changes in accounting methods.
18
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - continued
Sales and Marketing Expenses
Sales and marketing expenses were incurred in the amount of $163,303 and $772,601 during the six months ended June 30, 2017 and 2016, respectively. The decrease in sales and marketing expenses was due to reduced celebrity advertising expenditures.
Net Loss
The Company had a net loss for the six months ended June 30, 2017 of $2,615,446 as compared to a net loss of $2,862,328 for the six months ended June 30, 2016, a decrease of 9%. The decrease in net loss was due primarily to lower product development and sales and marketing costs offset by a loss on the Hang With investment and higher accretion and interest and app hosting expenses.
Liquidity and Capital Resources
Working Capital
June 30, 2017
December 31, 2016
(unaudited)
(audited)
Current Assets
$ 11,937
$ 127,776
Current Liabilities
5,557,752
3,732,596
Working Capital (Deficiency)
$ (5,545,815 )
$ (3,604,820 )
Current assets for the quarter ended June 30, 2017 decreased compared to December 31, 2016 primarily due to less cash on hand.
Current liabilities for the quarter ended June 30, 2017 increased compared to December 31, 2016 primarily due to additional convertible debentures and increased accounts payable.
Cash Flows
Six months
Six months
Ended
Ended
June 30, 2017
June 30, 2016
Net Cash Used in Operating Activities
$ (670,864 )
$ (1,359,555 )
Net Cash Used in Investing Activities
(175,000 )
-
Net Cash Provided by Financing Activities
726,060
1,457,271
Net Increase (Decrease) in Cash
$ (119,804 )
$ 97,716
19
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - continued
Net Cash Used in Operating Activities
Our cash used in operating activities of $670,864 for the six month period ended June 30, 2017 consisted primarily of a net loss of ($2,615,446) offset by adjustments of $1,234,791 for accretion expense, an increase in accounts payable of $312,714, and $175,000 for loss on investment.
Net Cash Used in Investing Activities
Net cash used cash in investing activities for the six month period ended June 30, 2017 consisted of an investment in Hang With of $175,000.
Net Cash Provided by Financing Activities
Our cash provided by financing activities of $726,060 for the six month period ended June 30, 2017 and $1,457,271 for the six month period ended June 30, 2016 consisted of the issuance of convertible debentures.
The Company derives the majority of its financing by issuing convertible notes to investors. The investors have the right to convert the notes into common shares of the Company after the requisite Rule 144 waiting period. The notes generally call for the shares to be issued at a deep discount to the market price at the time of conversion.
Going Concern
As of June 30, 2017, the Company has a working capital deficiency of $5,545,815 and has an accumulated deficit of $16,115,733 since inception and its operations continue to be funded primarily from sales of its stock and issuance of convertible debentures. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company’s ability to obtain the necessary financing through the issuance of convertible notes and equity financings. The consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
We have generated minimal revenues and have incurred losses since inception. Accordingly, we will be dependent on future additional financing in order to finance operations and growth. There is no assurance that we will generate sufficient revenue to sustain our operations.
Off-Balance Sheet Arrangements
As of June 30, 2017, the Company had no off-balance sheet arrangements.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
This Item 3 is not applicable to us as a smaller reporting company and has been omitted.
ITEM 4. CONTROLS AND PROCEDURES.
Disclosure Controls and Procedures
We maintain “disclosure controls and procedures”, as that term is defined in Rule 13a-15(e), promulgated by the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in our company’s reports filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and our principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.
As required by paragraph (b) of Rules 13a-15 under the Securities Exchange Act of 1934, our management, with the participation of our principal executive officer and our principal financial officer, evaluated our company’s disclosure controls and procedures as of the end of the period covered by this quarterly report on Form 10-Q. Based on this evaluation, our management concluded that as of the end of the period covered by this quarterly report on Form 10-Q, our disclosure controls and procedures were not effective.
20
ITEM 4. CONTROLS AND PROCEDURES. - continued
Management’s Report on Internal Control over Financial Reporting
Our management, including our principal executive officer, principal financial officer and our Board of Directors, is responsible for establishing and maintaining a process to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
Our management, with the participation of our principal executive officer and our principal financial officer, evaluated the effectiveness of our internal control over financial reporting as of June 30, 2017. Our management’s evaluation of our internal control over financial reporting was based on the framework in Internal Control—Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, our management concluded that our internal control over financial reporting was not effective as of June 30, 2017 due to the following material weaknesses which are indicative of many small companies with small staff: (i) inadequate segregation of duties and ineffective risk assessment; and (ii) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of both US GAAP and SEC guidelines. To remediate such weaknesses, we believe we would need to implement the following changes: (i) appoint additional qualified personnel to addressinadequate segregation of duties and ineffective risk management; and (ii) adopt sufficient written policies and procedures for accounting and financial reporting. The remediation efforts set out in (i) and (ii) are largely dependent upon our securing additional financing to cover the costs of implementing the changes required. If we are unsuccessful in securing such funds, remediation efforts may not be undertaken. Until we have the required funds, we do not anticipate implementing these remediation steps.
A material weakness is a deficiency or a combination of control deficiencies in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.
Our principal executive officer and our principal financial officer do not expect that our disclosure controls or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additional controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting during the fiscal quarter ended June 30, 2017 that have materially affected, or are reasonably likely to materially affect our internal control over financial reporting.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We are currently not involved in any litigation that we believe could have a material 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 companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.
21
ITEM 1A. RISK FACTORS.
We believe there are no changes that constitute material changes from the risk factors previously disclosed in our Annual Report on Form 10-K, filed with the SEC on April 17, 2017.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
During the six months ended June 30, 2017, the Company issued 599,157,030 shares of common stock to various convertible note holders for full and partial conversion of the notes.
During the six months ended June 30, 2017, the Company issued 4,720,000 shares of common stock to consultants as payment for finder’s fees.
During the six months ended June 30, 2017, the Company issued 175,099,361 shares of common stock to various Series A preferred stockholders on conversion of 293 preferred shares.
The issuance of the above securities was exempt from registration pursuant to Section 4(a)(2) of the Securities Act and Regulation D promulgated thereunder.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
There has been no default in the payment of principal, interest, sinking or purchase fund installment, or any other material default, with respect to any indebtedness of the Company.
ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable.
ITEM 5. OTHER INFORMATION.
There is no other information required to be disclosed under this item which was not previously disclosed.
22
ITEM 6. EXHIBITS
The exhibits listed on the Exhibit Index immediately preceding such exhibits, which is incorporated herein by reference, are filed or furnished as part of this Quarterly Report on Form 10-Q.
Exhibit Number
Description
(4)
Instruments defining the rights of security holders, including indentures
4.1
8% Convertible Note dated February 2, 2017 issued by the Company to EMA Financial, LLC (Incorporated by reference to the Current Report on Form 8-K, previously filed with the SEC on March 6, 2017)
4.2
8% Convertible Note dated March 15, 2017 issued by the Company to EMA Financial, LLC (Incorporated by reference to the Current Report on Form 8-K, previously filed with the SEC on March 23, 2017)
4.3
8% Convertible Redeemable Note dated March 13, 2017 issued by the Company to Coventry Enterprises, LLC (Incorporated by reference to the Current Report on Form 8-K, previously filed with the SEC on March 23, 2017)
(10)
Material Contracts
10.1
Securities Purchase Agreement dated February 2, 2017 by and between the Company and EMA Financial, LLC (Incorporated by reference to the Current Report on Form 8-K, previously filed with the SEC on March 6, 2017)
10.2
Securities Purchase Agreement dated March 15, 2017 by and between the Company and EMA Financial, LLC (Incorporated by reference to the Current Report on Form 8-K, previously filed with the SEC on March 23, 2017)
10.3
Securities Purchase Agreement dated March 13, 2017 by and between the Company and Coventry Enterprises, LLC (Incorporated by reference to the Current Report on Form 8-K, previously filed with the SEC on March 23, 2017)
(31)
Rule 13a-14(a)/15d-14(a) Certification
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)
Section 1350 Certification
32.1+
Certification of the Principal Executive Officer and 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)
XBRL
101.INS*
XBRL INSTANCE DOCUMENT
101.SCH*
XBRL TAXONOMY EXTENSION SCHEMA
101.CAL*
XBRL TAXONOMY EXTENSION CALCULATION LINKBASE
101.DEF*
XBRL TAXONOMY EXTENSION DEFINITION LINKBASE
101.LAB*
XBRL TAXONOMY EXTENSION LABEL LINKBASE
101.PRE*
XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE
* Filed herewith.
+ In accordance with SEC Release 33-8238, Exhibits 32.1 is being furnished and not filed.
23
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.
FRIENDABLE, INC.
Date: August 16, 2017
By:
/s/ Robert Rositano, Jr.
Name: Robert Rositano, Jr.
Title: CEO, Secretary, and Director (Principal Executive Officer)
Date: August 16, 2017
By:
/s/ Frank Garcia
Name: Frank Garcia
Title: Chief Financial Officer
(Principal Financial Officer and Principal Accounting Officer)
The Automotive Resou (ARNH)
0.0002 ? 0.0 (0.00%)
Volume: 86,259,387 @ 4:06:17 PM EDT ET
another nice day. wtg
yes you are right but after the reverse split it opened up at $1.00 and soared to $14.00
Lenny and the gang took MSLP from pennies to $14.00. Do you really think ARNH will stay at 0001x0002 for long? I highly doubt it. Just need some MOMO to come in and some more news. IHUB gangs will follow
With my experience in building companies like MusclePharm (MLSP), where I helped grow the company from 86k in sales when I first started, to being on pace to hit $77mm when I left. I know I have what it takes to build Intensity Nutrition to be a household name.
MSLP went from pennies to $14.00.. enuff said?
it's all a scam bro. always has been. 0003 going to no bid
No need to google. It's all right here.
From: xxxxxxxxx
Sent: Monday, August 14, 2017 1:13 AM
To: FernandezW@sec.gov
Subject: Fw: urgent and potential scam... jerry miller and qban scamming investors
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=133810082
QBAN HAS NO AGREEMENT WITH MICROTECH. READ THE NEWS
Telco Cuba, Inc. QBAN Post # 48476
investorshub.advfn.com
Telco Cuba, Inc. QBAN Stock Message Board: Here's one of many emails sent to jennifer
http://www.marketwatch.com/story/telco-cuba-corporate-update-2017-08-04?siteid=bigcharts&dist=bigcharts
Telco Cuba Corporate Update
www.marketwatch.com
Telco Cuba congratulates MicroTech on a job well done. As an initial RFP team member, the potential upside for Telco Cuba is tremendous. With the teaming agreement having run its course, we await further advisement from MicroTech on what the next steps are to continue our relationship with them." - William Sanchez, CEO.
With the teaming agreement having run its course. THAT MEANS IT EXPIRED, LONG GONE. The tweet from the CEO was fraudulent
The scammer behind QBAN is none other then jerry miller who is also behind KNSC and is about to take 4mio.com public. so sad
https://www.sec.gov/litigation/complaints/2017/comp23782.pdf
UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA ...
www.sec.gov
united states district court southern district of florida case no.: securities and exchange commission, plaintiff, v. jerry miller, defendant.
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
CASE NO.:
SECURITIES AND EXCHANGE COMMISSION,
Plaintiff,
v.
JERRY MILLER,
Defendant.
______________________________________________________/
COMPLAINT
Plaintiff Securities and Exchange Commission (the “Commission”) alleges:
I. SUMMARY
1. On or about February 26, 2014, Defendant Jerry Miller made and directed the
dissemination of materially false and misleading statements in a press release issued publicly on
www.otcmarkets.com by Petrotech Oil and Gas, Inc. (“Petrotech”).
2. Following Colorado’s legalization of the sale of recreational marijuana in January
2014, Petrotech, at the direction and behest of Miller and his entities, LP.US Inc. and LP.US
Management Group, both subsidiaries of Petrotech, issued a press release announcing that it had
expanded its cannabis and hemp production and distribution channels in Washington and
Colorado by securing a “Medical and Recreational license” from the state of Colorado and
signing on six licensed growers, as well as three additional growers in Washington.
3. However, Colorado has never issued any license to cultivate or sell marijuana in
the medical or retail markets to any of those entities. Furthermore, Petrotech, both LP US
Case 1:17-cv-20933-XXXX Document 1 Entered on FLSD Docket 03/13/2017 Page 1 of 9
2
entities, and all of their associated individuals have never held commercial or occupational
licenses in the Colorado Medical or Retail Marijuana industries.
4. Miller knew, or was reckless in not knowing, that the February 26, 2014 press
release contained materially false and misleading statements related to Petrotech’s purported
marijuana business.
5. By engaging in this conduct, Miller violated Section 10(b) of the Securities
Exchange Act of 1934 (“Exchange Act”), 15 U.S.C. § 78j(b), and Exchange Act Rule 10b-5(b),
17 C.F.R. § 240.10b-5(b); and alternatively, violated Section 10(b) and Rule 10b-5(b) through or
by means of any other person, pursuant to Section 20(b) of the Exchange Act, 15 U.S.C.
§ 78t(b). Unless enjoined, Miller is reasonably likely to continue to violate the federal securities
laws.
6. The Commission therefore respectfully requests the Court enter an order:
(i) permanently restraining and enjoining Miller from violating the federal securities laws;
(ii) directing Miller disgorge all ill-gotten gains; (iii) directing Miller to pay civil money
penalties; (iv) imposing an officer and director bar against Miller; and (v) imposing a penny
stock bar against Miller.
II. JURISDICTION AND VENUE
7. This Court has jurisdiction over this action pursuant to Sections 21(d)(1),
21(d)(3)(A), and 27 of the Exchange Act, 15 U.S.C. §§ 78u(d)(1), 78u(d)(3)(A), and 78aa.
8. Venue in the Southern District of Florida is proper pursuant to Section 27 of the
Exchange Act, 15 U.S.C. § 78aa. Miller resides and transacts business in this District.
Additionally, a substantial portion of the conduct alleged herein occurred in the Southern District
of Florida.
Case 1:17-cv-20933-XXXX Document 1 Entered on FLSD Docket 03/13/2017 Page 2 of 9
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9. In connection with the conduct alleged in this Complaint, Miller, directly and
indirectly, singly or in concert with others has made use of the means or instrumentalities of
interstate commerce, the means or instruments of transportation or communication in interstate
commerce, and the mails.
III. DEFENDANT
10. Miller, age 64, is the owner, President, and sole employee of a consulting firm
specializing in microcap stock issuers, investor relations, and capital raising. Miller and his
consulting company provided consulting services to Petrotech and its prior iterations beginning
in approximately 2009. Miller is the father-in-law of the Secretary and Director of Petrotech
during the relevant time. He resides in Bay Harbor Islands, Florida.
IV. OTHER RELEVANT ENTITY
11. Petrotech was a Nevada corporation headquartered in Bedford, Texas until mid-
2014, when the company ceased operations. Its common stock was quoted on the OTC Link
operated by OTC Markets Group Inc. (symbol “PTOG”) until March 14, 2014, when the
Commission issued an order temporarily suspending trading in its securities. At all relevant
times, Petrotech common stock qualified as “penny stock” under Section 3(a)(51) of the
Exchange Act, 15 U.S.C. § 78c(a)(51), and Rule 3a51-1 thereunder, 17 C.F.R. § 240.3a51-1.
V. FACTUAL BACKGROUND
A. Petrotech’s Formation
12. Petrotech was formed in Nevada in 1998 under a different name, as a purported
natural resource company engaged in the acquisition of mineral properties. Between 2000 and
2013, the company underwent a reverse merger and several name changes, acquired two
Case 1:17-cv-20933-XXXX Document 1 Entered on FLSD Docket 03/13/2017 Page 3 of 9
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subsidiaries, and was purportedly involved in various industries, including the development of
compact disc and digital video marketing and profiling tools, and wine and spirits production.
13. Since approximately 2009, Miller and his consulting company, from its location in
Bay Harbor Islands, Florida, provided consulting services to Petrotech’s immediate predecessor,
which was purportedly in the financial consulting business. Miller was a controlling shareholder
of the predecessor company between 2010 and 2013, before the merger that created Petrotech.
14. In or around 2012, Miller introduced the predecessor company to an oil and gas
company, and Miller and his consulting company assisted the predecessor company and the oil
and gas company complete a reverse merger. The resulting company was named Petrotech, and
Miller through his consulting company owned a significant number of shares in Petrotech after
the merger. Miller and the consulting firm sold Petrotech stock at a profit during the time of the
issuance of the press releases described herein.
15. Miller’s son-in-law was the predecessor company’s chairman, sole Director, and
Secretary and remained in those roles after the merger with Petrotech.
16. In one of Petrotech’s last public disclosures prior to the press releases, its Annual
Report ending December 31, 2013, Petrotech stated that its financial condition was such that it
“raised substantial doubt about the Company's ability to continue as a going concern.”
B. Miller Sets the Stage for Petrotech’s Foray into the Marijuana Business
17. In January 2014, Colorado’s legalization of the sale of recreational marijuana
became effective.
18. In early 2014, Miller incorporated LP.US, Inc. in Florida and LP.US Management
Group, Inc. in Colorado and Washington (collectively, “LP US”). LP US, as a Petrotech
subsidiary, would become Petrotech’s vehicle to enter the burgeoning marijuana-related business.
Case 1:17-cv-20933-XXXX Document 1 Entered on FLSD Docket 03/13/2017 Page 4 of 9
5
Miller provided and controlled the financing of LP US and was responsible for its business
decisions.
19. On or about February 19, 2014, in a press release Miller assisted in drafting,
Petrotech announced for the first time that it had set up LP US, a subsidiary company in
Colorado and Washington, “to serve as the foundation for the company’s entrance into the
emerging market for medical and recently legalized recreational marijuana in the United States.”
LP US would purportedly “specialize in managing the growers of legalized Marijuana and Hemp
in the states where they are allowed to grow.”
20. On or about February 20, 2014, Petrotech issued another press release announcing
that LP US was “structured around three main divisions [which would] work cohesively to
produce and market medicinal and recreational marijuana.”
21. Throughout February 2014 and March 2014, Petrotech continued to issue press
releases portraying it as having lucrative relationships with established marijuana growers.
22. During this time frame, Miller personally decided when to draft a press release,
what statements it would include, and when it would be publicly disseminated on behalf of
Petrotech.
23. Miller used his son-in-law, who as Petrotech’s Secretary had the ability to upload
press releases to www.otcmarkets.com and the company’s website, to publicly disseminate the
press releases via those websites.
C. Miller’s False Statement about Petrotech’s Marijuana License
24. On February 26, 2014, in a press release that Miller authored and directed to be
disseminated, Petrotech announced that in conjunction with its newly-founded marijuana
Case 1:17-cv-20933-XXXX Document 1 Entered on FLSD Docket 03/13/2017 Page 5 of 9
6
business, specifically its production and distribution channels in Washington and Colorado, it
had “secured a Medical and Recreational License from the state of Colorado.”
25. This statement is false. First, Colorado has never issued any marijuana-related
license by that name. Second, Petrotech, LP US, and all their associated individuals have never
held any Colorado licenses to cultivate or sell marijuana in the medical or retail markets, and, as
non-Colorado residents, could not obtain such licenses. Without such licenses, Petrotech and LP
US would not be legally able to commercially produce or market marijuana in Colorado.
26. Despite not having the requisite license to conduct such commercial marijuana
business in Colorado, Petrotech further announced in this press release an increased projected
marijuana production capacity of a minimum of 60-70 pounds per state, per month, with an
average market price of $3,000 per pound. These projections were announced as a result, in part,
from the securing of the marijuana license, which, in reality, was non-existent.
VI. CLAIMS FOR RELIEF
COUNT I
Fraud in Violation of Section 10(b) and Rule 10b-5(b) of the Exchange Act
27. The Commission realleges and incorporates Paragraphs 1 through 26 of this
Complaint.
28. On or about February 26, 2014, Miller, directly or indirectly, by use of any means
or instrumentality of interstate commerce, or of the mails, knowingly or recklessly made untrue
statements of material facts or omitted to state material facts necessary in order to make the
statements made, in light of the circumstances under which they were made, not misleading in
connection with the purchase or sale of a security.
Case 1:17-cv-20933-XXXX Document 1 Entered on FLSD Docket 03/13/2017 Page 6 of 9
7
29. By reason of the foregoing, Miller violated, and unless enjoined, is reasonably
likely to continue to violate, Section 10(b) of the Exchange Act, 15 U.S.C. § 78j(b), and
Exchange Act Rule 10b-5(b), 17 C.F.R. § 240.10b-5(b).
COUNT II
Violations of Sections 10(b), 20(b), and Rule 10b-5(b) of the Exchange Act
30. The Commission realleges and incorporates Paragraphs 1 through 26 of this
Complaint.
31. At all relevant times, Miller directly or indirectly violated Section 10(b) of the
Exchange Act, 15 U.S.C. § 78j(b), and Rule 10b-5(b) thereunder, 17 C.F.R. § 240.10b-5(b).
32. At all relevant times, Miller, directly or indirectly, through his son-in-law, did acts
or things which would have been unlawful for Miller to do under Exchange Act Section 10(b)
and Rule 10b-5(b).
33. By reason of the foregoing, Miller violated, and unless enjoined, is likely to
continue to violate, Section 20(b) of the Exchange Act, 15 U.S.C. § 78t(b).
VII. RELIEF REQUESTED
WHEREFORE, the Commission respectfully requests that the Court find Miller
committed the violations alleged in this Complaint, and:
I.
Permanent Injunctive Relief
Issue a Permanent Injunction restraining and enjoining Defendant, his officers, agents,
servants, employees, attorneys, and all persons in active concert or participation with him, and
each of them, from violating the federal securities laws alleged in this Complaint.
Case 1:17-cv-20933-XXXX Document 1 Entered on FLSD Docket 03/13/2017 Page 7 of 9
8
II.
Disgorgement
Issue an Order directing Defendant to disgorge all ill-gotten gains, including prejudgment
interest, resulting from the acts or courses of conduct alleged in this Complaint.
III.
Penalties
Issue an Order directing Defendant to pay civil money penalties pursuant to Section
21(d)(3) of the Exchange Act, 15 U.S.C. § 78u(d)(3).
IV.
Officer and Director Bar
Issue an order pursuant to Section 21(d)(2) of the Exchange Act, 15 U.S.C. § 78u(d)(2),
barring Defendant from serving as an officer or director of any issuer that has a class of
securities registered pursuant to Section 12 of the Exchange Act or that is required to file reports
pursuant to Section 15(d) of the Exchange Act.
V.
Penny Stock Bar
Issue an order barring Defendant from any future participation in the offering of any
penny stock, as defined by Section 3(a)(51)(A) of the Exchange Act, 15 U.S.C. § 77c(a)(51)(A)
and Rule 3a51-1 thereunder, 17 C.F.R. § 20.3a51-1, including engaging in activities with a
broker, dealer, or issuer for purposes of issuing, trading, or inducing or attempting to induce the
purchase or sale of any penny stock, pursuant to Section 21(d)(6) of the Exchange Act, 15 U.S.C.
§ 78u(d)(6), and the Court’s equitable powers.
Case 1:17-cv-20933-XXXX Document 1 Entered on FLSD Docket 03/13/2017 Page 8 of 9
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VI.
Further Relief
Grant such other and further relief as may be necessary and appropriate.
VII.
Retention of Jurisdiction
Further, the Commission respectfully requests the Court retain jurisdiction over this
action and over this Defendant, in order to implement and carry out the terms of all orders and
decrees that it may enter, or to entertain any suitable application or motion by the Commission
for additional relief within the jurisdiction of this Court.
Respectfully submitted,
March 13, 2017 By: s/Wilfredo Fernandez
Wilfredo Fernandez
Senior Trial Counsel
Fla. Bar No. 142859
Telephone: (305) 982-6376
Facsimile: (305) 536-4154
E-mail: FernandezW@sec.gov
ATTORNEY FOR PLAINTIFF
SECURITIES AND EXCHANGE COMM
dear jennifer
it has come to our attention that a company called telcocuba is using your 50b dollar press release to pump up their stock by saying that they are affilated with you and are untitled to part of the proceeds. their stock symbol is qban. the guy behind qban is a man named jerry miller who is under a massive sec investigation. here's a post and all the info from a message board
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=133711881
Telco Cuba, Inc. QBAN Post # 48391
investorshub.advfn.com
Telco Cuba, Inc. QBAN Stock Message Board: QBAN HAS NO AGREEMENT WITH MICROTECH. READ THE NEWS
QBAN HAS NO AGREEMENT WITH MICROTECH. READ THE NEWS
http://www.marketwatch.com/story/telco-cuba-corporate-update-2017-08-04?siteid=bigcharts&dist=bigcharts
Telco Cuba Corporate Update
www.marketwatch.com
Telco Cuba congratulates MicroTech on a job well done. As an initial RFP team membe
lenny had MSLP trading at $14.00
http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=mslp&insttype=&freq=2&show=&time=12
arnh - 0001 = a no brainer
insane brotha. start spreading the word. where the hell is the caribbean wolf pack?