x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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80-0671280
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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Large accelerated filer
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¨
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Accelerated filer
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¨
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Non-accelerated filer
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¨
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Smaller reporting company
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x
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Page Number
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|||||
PART I. FINANCIAL INFORMATION
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|||||
Condensed Consolidated Balance Sheets at June 30, 2013 (Unaudited) and December 31, 2012
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F-2 | ||||
Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2013 and 2012 (Unaudited)
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F-3 | ||||
Condensed Consolidated Statements of Cash Flows for the Three and Six Months Ended June 30, 2013 and 2012 (Unaudited)
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F-4 | ||||
Notes to the Condensed Consolidated Financial Statements (Unaudited)
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F-5 | ||||
Item 2.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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3 | |||
Item 3.
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Quantitative and Qualitative Disclosures About Market Risk
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9 | |||
Item 4.
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Controls and Procedures
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9 | |||
PART II. OTHER INFORMATION
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|||||
Item 1.
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Legal Proceedings
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11 | |||
Item 1A.
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Risk Factors
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11 | |||
Item 2.
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Unregistered Sales of Equity Securities and Use of Proceeds
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11 | |||
Item 3.
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Defaults Upon Senior Securities
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11 | |||
Item 4.
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Mine Safety Disclosure
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11 | |||
Item 5.
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Other Information
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11 | |||
Item 6.
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Exhibits
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12 | |||
SIGNATURES
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13 |
Contents
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Page(s)
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|||
Condensed Consolidated Balance Sheets at June 30, 2013 (Unaudited) and December 31, 2012
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F-2 | |||
Condensed Consolidated Statements of Operations for the Six and Three Months Ended June 30, 2013 and 2012 (Unaudited)
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F-3 | |||
Condensed Consolidated Statements of Cash Flows for the Six and Three Months Ended June 30, 2013 and 2012 (Unaudited)
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F-4 | |||
Notes to the Condensed Consolidated Financial Statements (Unaudited)
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F-5 |
LifeApps Digital Media Inc.
|
|||||
Condensed Consolidated Balance Sheets
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June 30,
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December 31,
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|||||||
2013
|
2012
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|||||||
(Unaudited)
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(Audited)
|
|||||||
Assets
|
||||||||
Current assets:
|
||||||||
Cash
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$ | 249,504 | $ | 791,065 | ||||
Accounts receivable
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8,993 | - | ||||||
Inventory
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116,510 | - | ||||||
Other current assets
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4,422 | 45,360 | ||||||
Total current assets
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379,429 | 836,425 | ||||||
Fixed assets, net of depreciation
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7,459 | - | ||||||
Intangible asset, net of amortization
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102,046 | 4,666 | ||||||
Total Assets
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$ | 488,934 | $ | 841,091 | ||||
Liabilities and Stockholders’ Equity
|
||||||||
Current liabilities:
|
||||||||
Accounts payable and accrued expenses
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$ | 25,377 | $ | 47,700 | ||||
Amount due to related party
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6,487 | 6,834 | ||||||
Total current liabilities
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31,864 | 54,534 | ||||||
Total liabilities
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31,864 | 54,534 | ||||||
Stockholders' Equity
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||||||||
Preferred stock, $.001 par value, none issued or outstanding
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- | - | ||||||
Common stock, $0.001 par value, 300,000,000 shares authorized, 76,000,000 shares issued and outstanding, as of June 30, 2013 and December 31, 2012
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76,000 | 76,000 | ||||||
Additional paid in capital
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1,281,801 | 1,195,937 | ||||||
Accumulated deficit
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(900,731 | ) | (485,380 | ) | ||||
Total stockholders’ equity
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457,070 | 786,557 | ||||||
Total Liabilities and Stockholders’ Equity
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$ | 488,934 | $ | 841,091 |
LifeApps Digital Media Inc.
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|||||||||||
Condensed Consolidated Statements of Operations
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|||||||||||
(Unaudited)
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For the Six Months
Ended June 30,
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For the Three Months
Ended June 30,
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|||||||||||||||
2013
|
2012
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2013
|
2012
|
|||||||||||||
Revenue
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$ | 93,678 | $ | 1,266 | $ | 93,338 | $ | 683 | ||||||||
Cost of revenue
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65,362 | - | 65,362 | - | ||||||||||||
Gross profit
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28,316 | 1,266 | 27,976 | 683 | ||||||||||||
Operating expenses:
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||||||||||||||||
General and administrative
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433,753 | 78,793 | 233,962 | 71,446 | ||||||||||||
Depreciation and amortization
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9,939 | 1,510 | 8,544 | 755 | ||||||||||||
Total operating expenses
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443,692 | 80,303 | 242,506 | 72,201 | ||||||||||||
Operating loss
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(415,376 | ) | (79,037 | ) | (214,530 | ) | (71,518 | ) | ||||||||
Interest (income) expense
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(25 | ) | 1,370 | (10 | ) | 1,370 | ||||||||||
Net (loss)
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$ | (415,351 | ) | $ | (80,407 | ) | $ | (214,520 | ) | $ | (72,888 | ) | ||||
Per share information - basic and fully diluted:
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||||||||||||||||
Weighted average shares outstanding
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76,000,000 | 40,000,000 | 76,000,000 | 40,000,000 | ||||||||||||
Net (loss) per share
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$ | (0.01 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) |
LifeApps Digital Media Inc.
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|||||
Condensed Consolidated Statements of Cash Flows
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For the Six Months
Ended June 30,
|
||||||||
2013
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2012
|
|||||||
Net cash used in operations
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$ | (426,436 | ) | $ | (59,182 | ) | ||
Cash flow from investing activities:
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||||||||
Assets purchased in business combination
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(99,500 | ) | - | |||||
Investment in intangible assets
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(12,608 | ) | - | |||||
Investment in fixed assets
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(2,670 | ) | - | |||||
Net Cash used in investing activities
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(114,778 | ) | - | |||||
Cash flow from financing activities:
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||||||||
Issuance of common stock for cash
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||||||||
Advances from related party
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- | 29,500 | ||||||
Repayments to related party
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(347 | ) | (12,950 | ) | ||||
Short term borrowing
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- | 50,000 | ||||||
Net cash (used in) provided by financing activities
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(347 | ) | 66,550 | |||||
Net increase (decrease) in cash
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(541,561 | ) | 7,368 | |||||
Cash at beginning of period
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791,065 | 698 | ||||||
Cash at end of period
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$ | 249,504 | $ | 8,066 |
Furniture and equipment
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$ | 5,450 | ||
Internet domain names
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22,500 | |||
Website
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30,000 | |||
Customer and supplier lists
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30,000 | |||
Goodwill
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11,550 | |||
$ | 99,500 |
For the six months ended
June 30,
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||||||||
2013
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2012
|
|||||||
Revenue
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$ | 196,723 | $ | 204,831 | ||||
Net loss
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$ | (403,145 | ) | $ | (62,745 | ) |
June 30,
2013
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December 31,
2012
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|||||||
Internet domain names
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$ | 47,642 | $ | 12,533 | ||||
Website
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30,000 | - | ||||||
Customer and supplier lists
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30,000 | - | ||||||
107,642 | 12,533 | |||||||
Less accumulated amortization
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(17,146 | ) | (7,867 | ) | ||||
90,496 | 4,666 | |||||||
Goodwill
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11,550 | - | ||||||
$ | 102,046 | $ | 4,666 |
Internet domain names
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$ | 22,500 | ||
Website
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30,000 | |||
Customer and supplier lists
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30,000 | |||
Goodwill
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11,550 | |||
$ | 94,050 |
Year Ended December 31,
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Amortization
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|||
2013
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$
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14,430
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||
2014
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28,860
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|||
2015
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28,544
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|||
2016
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11,162
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|||
2017
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6,000
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|||
Thereafter
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1,500
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|||
$
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90,496
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Expected life (in years)
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3
|
|||
Volatility (based on a comparable company)
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117
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%
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||
Risk Free interest rate
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0.48
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%
|
||
Dividend yield (on common stock)
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-
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Options
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Weighted Average Exercise Price
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Weighted Average Remaining Contractual Term (in years)
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Aggregate Intrinsic Value
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|||||||||||||
Outstanding January 1, 2013
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1,400,000 | $ | 0.070 | |||||||||||||
Granted
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3,600,000 | $ | 0.038 | |||||||||||||
Exercised
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- | $ | - | |||||||||||||
Cancelled
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(50,000 | ) | $ | 0.070 | ||||||||||||
Outstanding June 30, 2013
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4,950,000 | $ | 0.047 | 2.81 | $ | 75,000 | ||||||||||
Exercisable June 30, 2013
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2,083,334 | $ | 0.052 | 2.74 | $ | 25,200 |
Options
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Weighted Average Exercise Price
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Weighted Average Remaining Contractual Term (in years)
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Aggregate Intrinsic Value
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|||||||||||||
Outstanding January 1, 2013
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900,000 | $ | 0.070 | |||||||||||||
Granted
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375,000 | $ | 0.038 | |||||||||||||
Exercised
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- | $ | - | |||||||||||||
Cancelled
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(200,000 | ) | $ | 0.070 | ||||||||||||
Outstanding June30, 2013
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1,075,000 | $ | 0.059 | 2.64 | $ | 7,875 | ||||||||||
Exercisable June 30, 2013
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591,666 | $ | 0.063 | 2.58 | $ | 2,625 |
Number of warrants
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Exercise price per share
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Average remaining
term in years
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Aggregate intrinsic
value at date of grant
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|||||||||||||
6,000,000
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$
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1.00
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4.23
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$
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-
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Period ended June 30, 2013
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||||||||
Six Months
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Three Months
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|||||||
Revenue | ||||||||
Products
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$ | 93,292 | $ | 93,292 | ||||
Publishing
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386 | 46 | ||||||
Total revenue
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$ | 93,678 | $ | 93,338 | ||||
Gross profit
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||||||||
Products
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$ | 27,930 | $ | 27,930 | ||||
Publishing
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386 | 46 | ||||||
Total gross profit
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$ | 28,316 | $ | 27,976 | ||||
Other items:
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||||||||
General and administrative expenses including depreciation and amortization allocable to Products segment
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(16,067 | ) | (16,067 | ) | ||||
General and administrative expenses unallocated including depreciation and amortization
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$ | (427,625 | ) | $ | (226,439 | ) | ||
Interest income
|
||||||||
Unallocated amounts
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$ | 25 | $ | 10 | ||||
Net income (loss)
|
||||||||
Products
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$ | 11,863 | $ | 11,863 | ||||
Publishing
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386 | 46 | ||||||
Unallocated amounts
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(427,600 | ) | (226,429 | ) | ||||
Total net loss
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$ | (415,351 | ) | $ | (214,520 | ) |
Six Months Ended June 30,
|
||||||||||||
2013
|
2012
|
Difference
|
||||||||||
Personnel costs
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$ | 140,730 | $ | - | $ | 140,730 | ||||||
Equity based expense
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85,864 | - | 85,864 | |||||||||
Professional fees
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82,457 | 12,500 | 69,957 | |||||||||
Marketing and advertising
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43,040 | 11,549 | 31,491 | |||||||||
Research and development
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26,732 | 44,405 | (17,673 | ) | ||||||||
Other expenses
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54,930 | 10,339 | 44,591 | |||||||||
$ | 433,753 | $ | 78,793 | $ | 354,960 |
Three Months Ended June 30,
|
||||||||||||
2013
|
2012
|
Difference
|
||||||||||
Personnel costs
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$ | 71,593 | $ | - | $ | 71,593 | ||||||
Equity based espenses
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58,393 | - | 58,393 | |||||||||
Professional fees
|
49,280 | 12,500 | 36,780 | |||||||||
Research and development
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10,041 | 37,980 | (27,939 | ) | ||||||||
Marketing and advertising
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8,283 | 10,659 | (2,376 | ) | ||||||||
Other expenses
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36,374 | 10,307 | 26,067 | |||||||||
$ | 233,964 | $ | 71,446 | $ | 162,518 |
Exhibit No.
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Description
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31.1
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Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
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31.2
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Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
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32.1*
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Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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32.2*
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Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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101.INS **
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XBRL Instance Document
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101.SCH **
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XBRL Taxonomy Extension Schema Document
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101.CAL **
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XBRL Taxonomy Extension Calculation Linkbase Document
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101.DEF **
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XBRL Taxonomy Extension Definition Linkbase Document
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101.LAB **
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XBRL Taxonomy Extension Label Linkbase Document
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101.PRE **
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XBRL Taxonomy Extension Presentation Linkbase Document
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*
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This certification is being furnished and shall not be deemed “filed” with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference
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**
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XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act is deemed not filed for purposes of Section 18 of the Exchange Act and otherwise is not subject to liability under these sections.
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LifeApps Digital Media Inc.
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|||
Date: August 14, 2013
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By:
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/s/ Robert Gayman
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Robert Gayman
|
|||
Chief Executive Officer and President
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By:
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/s/ Arnold Tinter
|
||
Arnold Tinter
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|||
Chief Financial Officer and Treasurer
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1.
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I have reviewed this quarterly report on Form 10-Q of LifeApps Digital Media Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:
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(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;
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(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an quarterly report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5.
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The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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Date: August 14, 2013
|
By:
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/s/ Robert Gayman
|
|
Robert Gayman
|
|||
Chief Executive Officer and President
(Principal Executive Officer)
|
1.
|
I have reviewed this quarterly report on Form 10-Q of LifeApps Digital Media Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
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The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an quarterly report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date: August 14, 2013
|
By:
|
/s/ Arnold Tinter
|
|
Arnold Tinter
|
|||
Chief Financial Officer and Treasurer
(Principal Financial Officer)
|
Date: August 14, 2013
|
By:
|
/s/ Robert Gayman
|
|
Robert Gayman
|
|||
Chief Executive Officer and President
(Principal Executive Officer)
|
Date: August 14, 2013
|
By:
|
/s/ Arnold Tinter
|
|
Arnold Tinter
|
|||
Chief Financial Officer and Treasurer
(Principal Financial Officer)
|
Summary of Significant Accounting Policies (Policies)
|
6 Months Ended |
---|---|
Jun. 30, 2013
|
|
Summary Of Significant Accounting Policies Policies | |
Principles of Consolidation | The accompanying consolidated financial statements include the accounts of the Company and our wholly owned subsidiaries, Lifeapps Inc and Sports One Group Inc. All material inter-company transactions and balances have been eliminated in consolidation. |
Use of Estimates | The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheets and revenues and expenses during the years reported. Actual results may differ from these estimates. |
Inventory | Inventory consists of finished goods, sports and fitness products, and is stated at the lower of cost or net realizable value, with cost being determined on a first-in first-out basis. |
Revenue recognition | Revenue is derived primarily from the sale of sports and fitness apparel and equipment, and software applications designed for use on mobile devices such as smart phones and tablets. Revenue is recognized only when persuasive evidence of an arrangement exists, the fee is fixed or determinable, the product or service has been delivered, and collectability is probable.
We sell our software directly via Internet download through third party agents. We recognize revenue when payment is received from the agent. Payment is received net of commission paid to the agent, usually 70% to us and 30% to the agent. We record the net amount received as revenue.
We also publish and sell digital magazines through the internet. Magazines can be purchased as individual volumes or as a subscription. To date we have not had any subscription sales. |
Research and development, Website Development Costs, and Software Development Costs | All research and development costs are expensed as incurred. Software development costs eligible for capitalization under ASC 350-50, Website Development Cost, and ASC 985-20, Software-Costs of Software to be Sold, Leased or Marketed, were not material to our financial statements for the six and three months ended June 30, 2013 and 2012. Research and development expenses amounted to $26,733 and $44,405 for six ended June 30, 2013 and 2012, respectively, and $10,042 and $37,980 for the three months ended June 30, 2013 and 2012, respectively. Research and development expenses were included in general and administrative expenses. |
Advertising Costs | We recognize advertising expense when incurred. Advertising expense was $43,040 and $11,549 for the six months ended June 30, 2013 and 2012, respectively, and $8,283 and $10,659 for the three months ended June 30, 2013 and 2012, respectively. |
Rent Expense | We recognizes rent expense on a straight-line basis over the reasonably assured lease term as defined in ASC Topic 840, Leases (ASC 840). Our lease is short term and will be renewed on a month to month basis. Rent expense for the six months ended June 30, 2013 and 2012, was $9,339 and $3,660, respectively. Rent expense for the three months ended June 30, 2013 and 2012, was $5,619 and $3,660, respectively. |
Recent Pronouncements | We have reviewed all recently issued, but not yet effective, accounting pronouncements and do not believe the future adoption of any such pronouncements may be expected to cause a material impact on our financial condition or the results of operations. |
Statements of Operations (Unaudited) (USD $)
|
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
|
Statements Of Operations | ||||
Revenue | $ 93,338 | $ 683 | $ 93,678 | $ 1,266 |
Cost of revenue | 65,362 | 65,362 | ||
Gross profit (loss) | 27,976 | 683 | 28,316 | 1,266 |
Operating expenses: | ||||
General and administrative | 233,962 | 71,446 | 433,753 | 78,793 |
Depreciation and amortization | 8,544 | 755 | 9,939 | 1,510 |
Total operating expenses | 242,506 | 72,201 | 443,692 | 80,303 |
Operating loss | (214,530) | (71,518) | (415,376) | (79,037) |
Interest expense (income) | (10) | 1,370 | (25) | 1,370 |
Net (loss) | $ (214,520) | $ (72,888) | $ (415,351) | $ (80,407) |
Per share information - basic and fully diluted | ||||
Weighted average shares outstanding | 76,000,000 | 40,000,000 | 76,000,000 | 40,000,000 |
Net (loss) per share | $ 0.00 | $ 0.00 | $ (0.01) | $ 0.00 |
Amount Due Shareholder
|
6 Months Ended |
---|---|
Jun. 30, 2013
|
|
Notes to Financial Statements | |
Note 5. Amount Due Shareholder | Parties, which can be a corporation or individual, are considered to be related if we have the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Companies are also considered to be related if they are subject to common control or common significant influence.
Amount due related party represents amounts paid on our behalf by an officer and shareholder of the Company. These advances are non-interest bearing, short term in nature and due on demand. The balance at June 30, 2013 and December 31, 2012 was $6,487 and $6,834, respectively. |
Business Combination (Details) (USD $)
|
Jun. 30, 2013
|
---|---|
Business Combination Details | |
Furniture and equipment | $ 5,450 |
Internet domain names | 22,500 |
Website | 30,000 |
Customer and supplier lists | 30,000 |
Goodwill | 11,550 |
Total | $ 99,500 |
Business Combination (Tables)
|
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
|
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Business Combination Tables | ||||||||||||||||||||||||||||||||||||||||||||||
Preliminary price allocation | The preliminary price allocation is as follows:
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Revenue and earnings |
|
Business Segments (Details) (USD $)
|
3 Months Ended | 6 Months Ended |
---|---|---|
Jun. 30, 2013
|
Jun. 30, 2013
|
|
Revenue | ||
Products | $ 93,292 | $ 93,292 |
Publishing | 46 | 386 |
Total revenue | 93,338 | 93,678 |
Products | 27,930 | 27,930 |
Gross profit | ||
Publishing | 46 | 386 |
Total gross profit | 27,976 | 28,316 |
Other items: | ||
General and administrative expenses including depreciation and amortization allocable to Products segment | (16,067) | (16,067) |
General and administrative expenses unallocated including depreciation and amortization | (226,439) | (427,625) |
Interest income | ||
Unallocated amounts | 10 | 25 |
Net income (loss) | ||
Products | 11,863 | 11,863 |
Publishing | 46 | 386 |
Unallocated amounts | (226,429) | (427,600) |
Total net loss | $ (214,520) | $ (415,351) |
Intangible Assets (Details) (USD $)
|
Jun. 30, 2013
|
Dec. 31, 2012
|
---|---|---|
Intangible Assets Details | ||
Internet domain names | $ 47,642 | $ 12,533 |
Website | 30,000 | |
Customer and supplier lists | 30,000 | |
Intangible assets gross | 107,642 | |
Less accumulated amortization | (17,146) | (7,867) |
Intangible assets net | 90,496 | 4,666 |
Goodwill | 11,550 | |
Intangible assets including Goodwill | $ 102,046 | $ 4,666 |
Business Combination (Details Narrative) (USD $)
|
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
|
Operating income | $ (214,530) | $ (71,518) | $ (415,376) | $ (79,037) |
Sports One Group
|
||||
Assets purchase | 99,500 | |||
Revenue | 81,728 | |||
Operating income | $ 4,195 |
Stock Based Compensation (Details 2) (NonEmployeesMember, USD $)
|
6 Months Ended |
---|---|
Jun. 30, 2013
|
|
NonEmployeesMember
|
|
Options | |
Outstanding January 1, 2013 | 900,000 |
Granted | 375,000 |
Exercised | |
Cancelled | (200,000) |
Outstanding June 30, 2013 | 1,075,000 |
Exercisable June 30, 2013 | 591,666 |
Weighted Average Exercise Price | |
Outstanding January 1, 2013 | $ 0.070 |
Granted | $ 0.038 |
Exercised | |
Cancelled | $ 0.070 |
Outstanding June 30, 2013 | $ 0.059 |
Exercisable June 30, 2013 | $ 0.063 |
Weighted Average Remaining Contractual Term (in years) | |
Outstanding June 30, 2013 | 2 years 7 months 21 days |
Exercisable June 30, 2013 | 2 years 6 months 29 days |
Aggregate Intrinsic Value | |
Outstanding January 1, 2013 | |
Outstanding June 30, 2013 | 7,875 |
Exercisable June 30, 2013 | $ 2,625 |
Amount Due Shareholder (Details Narrative) (USD $)
|
Jun. 30, 2013
|
Dec. 31, 2012
|
---|---|---|
Amount Due Shareholder Details Narrative | ||
Balance of related party | $ 6,487 | $ 6,834 |
Business Combination (Details 1) (USD $)
|
6 Months Ended | |
---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
|
Business Combination | ||
Revenue | $ 196,723 | $ 204,831 |
Net loss | $ (403,145) | $ (62,745) |
Nature of Business
|
6 Months Ended |
---|---|
Jun. 30, 2013
|
|
Notes to Financial Statements | |
Note 1. Nature of Business |
Throughout this report, the terms our, we, us, and the Company refer to LifeApps Digital Media Inc., including its subsidiaries. The accompanying unaudited condensed financial statements of LifeApps Digital Media Inc. at June 30, 2013 and 2012 have been prepared in accordance with generally accepted accounting principles (GAAP) for interim financial statements, instructions to Form 10-Q, and Regulation S-X. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. These condensed financial statements should be read in conjunction with the financial statements and notes thereto included in our annual report on Form 10-K for the year ended December 31, 2012. In management's opinion, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation to make our financial statements not misleading have been included. The results of operations for the periods ended June 30, 2013 and 2012 presented are not necessarily indicative of the results to be expected for the full year. The December 31, 2012 balance sheet has been derived from our audited financial statements included in our annual report on Form 10-K for the year ended December 31, 2012.
We are building health, fitness and sports communities across multiple digital platforms including mobile apps, digital sports and fitness publications, sports and fitness products, sporting events, gateway platforms, online websites and social media.
We were in the development stage from July 15, 2009 through March 31, 2013. Our fiscal year ending December 31, 2013 is the first year during which we are considered an operating company and is no longer in the development stage. |
Business Combination
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6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Business Combination | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Note 3. Business Combination | On April 1, 2013, we purchased certain assets, related to a gateway platform which matches sports apparel manufacturers with distributors and purchasers, from Sports One Group and Performance Gear (Sports One Group), a sole proprietorship. The purchase price of the assets was $99,500. In accordance with the guidance of ASC Topic 805, Business Combinations (ASC 805) we determined that the assets acquired constitute a business and we acquired 100% of the business. We acquired the business in order to expand our electronic and mobile commerce (e-commerce and m-commerce) businesses to include health fitness and sports apparel.
As of June 30, 2013 the purchase price allocation of the acquisitions of the aforementioned business is preliminarily dependent on finalization of the Companys valuation assessment in accordance with ASC 805.
The preliminary price allocation is as follows:
Revenue and operating income of Sports One Group since the acquisition date included in the consolidated statements of operations for the six months ended June 30, 2013, was $81,728 and $4,195, respectively.
The following table sets forth the amounts of revenue and earnings of the company and Sports One Group as though the combination took place at the beginning of the six month periods ended June 30, 2013 and 2012:
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Stock Based Compensation
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Notes to Financial Statements | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Note 6. Stock Based Compensation | During 2012, our Board of Directors adopted the 2012 Equity Incentive Plan (2012 Plan), which was approved by our shareholders. The 2012 Plan provides for the issuance of up to 10,000,000 shares of our common stock. The plan provides for the award of options, stock appreciation rights, performance share awards, and restricted stock and stock units. The plan is administered by the Board of Directors.
During 2012, the Board of Directors authorized the issuance of 1,400,000 options to purchase shares of our common stock to employees and directors, and 900,000 options to purchase our common stock to non-employees of the Company who provide consulting services. During the three months ended June 30, 2013, one employee and a contract with a non-employee were terminated. All previously unvested stock option expense to the non-employee, in the amount of $10,134 was reversed and credited to general and administrative expenses
During the three months ended June 30, 2013, the Board of Directors authorized the issuance of 3,600,000 options to purchase shares of our common stock to employees and directors, and 375,000 options to purchase our common stock to non-employees of the Company who provide consulting services.
The fair value of the options, $104,420, was estimated at the date of grant using the Black-Scholes option pricing model, with the following assumptions:
Amounts charged to expense for the options paid to employees and non-employees was $68,871 and $16,933, respectively, for the six months ended June 30, 2013 and $52,149 and $6,243, respectively for the three months ended June 30, 2013. There were no expenses the same periods in 2012.
The following is a summary of stock option issued to employees and directors:
We will recognize compensation expense of $132,282 in future periods through June 30, 2014.
The following is a summary of stock options issued to non-employees:
We will recognize expense of $11,362 in future periods through June 30, 2014. |
Intangible Assets
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
|
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Notes to Financial Statements | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Note 4. Intangible Assets | At June 30, 2013 and December 31, 2012, intangible assets consist of the following:
Internet domain name costs are being amortized over the expected useful life of the domain name which we estimate to be is three years from the date of registering the domain name. In accordance with ASC Topic 350 Intangibles Goodwill and Other (ASC 350), the costs to obtain and register an internet domain shall be capitalized. Website and customer and supplier lists are being amortized over three and five years, respectively, which are their estimated useful lives.
We recognize goodwill and identifiable intangibles arising from the allocation of the purchase prices of assets acquired in accordance with ASC 805. Goodwill represents the excess of cost over fair value of all identifiable assets less any liabilities assumed. Additionally, ASC 805 gives guidance on five types of assets: marketing-related, customer-related, artistic-related, contract-related, and technology based intangible assets. We identified identifiable intangibles that are marketing-related, customer-related, and technology based.
We recognized the following intangible assets in connection with the business combination:
The amount charged to expenses for amortization of all amortizable intangibles was $9,278 and $1,510 for six months ended June 30, 2013 and 2012, respectively, and $7,914 and $755 for the three months ended June 30, 2013 and 2012, respectively.
Estimated future amortization expense related to the intangibles as of June 30, 2013 is as follows:
|
Intangible Assets (Details 1) (USD $)
|
Jun. 30, 2013
|
---|---|
Notes to Financial Statements | |
Internet domain names | $ 22,500 |
Website | 30,000 |
Customer and supplier lists | 30,000 |
Goodwill | 11,550 |
Total | $ 94,050 |
Stock Based Compensation (Details)
|
6 Months Ended |
---|---|
Jun. 30, 2013
|
|
Stock Based Compensation Details | |
Expected life (in years) | 3 years |
Volatility | 117.00% |
Risk Free interest rate | 0.48% |
Dividend yield (on common stock) |
Income Taxes (Details Narrative)
|
Jun. 30, 2013
|
Dec. 31, 2012
|
---|---|---|
Income Taxes Details Narrative | ||
Estimated effective tax rate | 0.00% | 0.00% |
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