UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
| x | QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended March
31, 2015
| ¨ | 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: 000-54867
LIFEAPPS DIGITAL MEDIA INC.
(Exact name of registrant as specified in
its charter)
Delaware |
80-0671280 |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
10636 Scripps Summit Court Suite 166,
San Diego, CA 92131
(Address of principal executive offices,
including zip code)
5752 Oberlin Drive, #106, San Diego,
CA 92121
(Former address of principal executive offices)
Tel: (858)-577-0500
(Registrant’s telephone number, including
area code)
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days. Yes x
No ¨
Indicate
by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x
No ¨
Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated
filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
¨ |
Accelerated filer |
¨ |
|
|
|
|
Non-accelerated filer |
¨ |
Smaller reporting company |
x |
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨
No x
As of May 15, 2015 there were issued and outstanding 140,466,731
shares of Common Stock, $0.001 par value.
FORM 10-Q
LIFEAPPS DIGITAL MEDIA INC.
INDEX
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
LifeApps Digital Media Inc.
March 31, 2015 and 2014
Index to the Financial Statements
LifeApps Digital Media Inc.
Condensed Consolidated Balance Sheets
| |
March 31, | | |
December 31, | |
| |
2015 | | |
2014 | |
| |
(Unaudited) | | |
(Audited) | |
Assets | |
| | | |
| | |
Current assets: | |
| | | |
| | |
Cash | |
$ | 8,527 | | |
$ | 19,941 | |
Accounts receivable | |
| 5,445 | | |
| 3,652 | |
Other current assets | |
| 345 | | |
| 345 | |
Total current assets | |
| 14,317 | | |
| 23,938 | |
Fixed assets, net of depreciation | |
| 2567 | | |
| 3,206 | |
Intangible asset, net of amortization | |
| 37,041 | | |
| 46,069 | |
Total Assets | |
$ | 53,925 | | |
$ | 73,213 | |
| |
| | | |
| | |
Liabilities and Stockholders’ (Deficit) | |
| | | |
| | |
Current liabilities: | |
| | | |
| | |
Accounts payable and accrued expenses | |
$ | 140,021 | | |
$ | 120,893 | |
Amount due to related party | |
| 194,314 | | |
| 166,364 | |
Total current liabilities | |
| 334,335 | | |
| 287,257 | |
Convertible notes payable, net of debt discount | |
| 15,292 | | |
| 10,120 | |
Derivative liability on long term convertible note payable | |
| 133,666 | | |
| 63,564 | |
Total liabilities | |
| 483,293 | | |
| 360,941 | |
| |
| | | |
| | |
Stockholders' (Deficit) | |
| | | |
| | |
Preferred stock, $0.001 par value, 10,000,000 authorized, none issued or outstanding as of March 31, 2015 (unaudited) and 2014 | |
| | | |
| | |
Common stock, $0.001 par value, 300,000,000 shares authorized, 124,866,731 and 91,530,000 shares issued and outstanding, as of March 31, 2015 (unaudited) and December 31, 2014, respectively | |
| 124,867 | | |
| 91,530 | |
Additional paid in capital | |
| 1,652,295 | | |
| 1527,730 | |
Accumulated (deficit) | |
| (2,206,530 | ) | |
| (1,906,988 | ) |
Total stockholders’ (deficit) | |
| (429,368 | ) | |
| (287,728 | ) |
Total Liabilities and Stockholders’ Equity (Deficit) | |
$ | 53,925 | | |
$ | 73,213 | |
See the accompanying notes to the unaudited
condensed consolidated financial statements
LifeApps Digital Media Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
| |
For the Three Months Ended | |
| |
March 31, | |
| |
2015 | | |
2014 | |
Revenue | |
$ | 61,317 | | |
$ | 121,293 | |
Cost of revenue | |
| 40,844 | | |
| 108,780 | |
Gross profit (loss) | |
| 20,473 | | |
| 12,513 | |
Operating expenses: | |
| | | |
| | |
General and administrative | |
| 113,322 | | |
| 73,885 | |
Depreciation and amortization | |
| 9,667 | | |
| 9,667 | |
Total operating expenses | |
| 122,989 | | |
| 83,552 | |
Operating loss | |
| (102,516 | ) | |
| (71,039 | ) |
Other (income) and expenses | |
| | | |
| | |
Change in derivative liability | |
| 134,895 | | |
| - | |
Loss on debt conversion | |
| 47,500 | | |
| - | |
Interest (income) expense, net | |
| 14,631 | | |
| 627 | |
Total other income and expense | |
| 197,026 | | |
| 627 | |
| |
| | | |
| | |
Loss before income taxes | |
| (299,542 | ) | |
| (71,666 | ) |
Provision for income taxes | |
| - | | |
| - | |
Net (loss) | |
$ | (299,542 | ) | |
$ | (71,666 | ) |
| |
| | | |
| | |
Per share information - basic and fully diluted: | |
| | | |
| | |
Weighted average shares outstanding | |
| 100,150,081 | | |
| 76,000,000 | |
| |
| | | |
| | |
Net (loss) per share | |
$ | (0.00 | )* | |
$ | (0.00 | )* |
* denotes a loss of less than $0.01 per share
See the accompanying notes to the unaudited
condensed consolidated financial statements
LifeApps Digital Media Inc.
Condensed Consolidated Statements of Cash
Flows
For the Three Months Ended March 31, 2015
and 2014
(Unaudited)
| |
2015 | | |
2014 | |
Net cash used in operations | |
$ | (33,114 | ) | |
$ | (76,259 | ) |
| |
| | | |
| | |
Cash flow from investing activities: | |
| | | |
| | |
Net Cash used in investing activities | |
| - | | |
| - | |
| |
| | | |
| | |
Cash flow from financing activities: | |
| | | |
| | |
Issuance of convertible notes for cash | |
| - | | |
| 75,000 | |
Advances from related party | |
| 23,500 | | |
| 30,500 | |
Repayments of advances from related party | |
| (1,800 | ) | |
| - | |
Net cash(used) provided by financing activities | |
| 21,700 | | |
| 105,500 | |
| |
| | | |
| | |
Net (decrease) increase in cash | |
| (11,414 | ) | |
| 29,241 | |
Cash at beginning of period | |
| 19,941 | | |
| 36,876 | |
Cash at end of period | |
$ | 8,527 | | |
$ | 66,117 | |
| |
| | | |
| | |
Supplemental disclosure of cash flow information: | |
| | | |
| | |
Cash paid during the period for: | |
| | | |
| | |
Interest | |
$ | - | | |
$ | - | |
Taxes | |
$ | - | | |
$ | - | |
| |
| | | |
| | |
Supplemental disclosure of non-cash financing activities: | |
| | | |
| | |
Shares issued for payment of convertible note payable | |
$ | 21,294 | | |
$ | - | |
Shares issued for payment of amounts due to related party | |
$ | 31,250 | | |
$ | - | |
| |
| | | |
| | |
See the accompanying notes to the unaudited
condensed consolidated financial statements
LifeApps Digital Media Inc.
Notes to Condensed Consolidated Financial
Statements
For the Three Months Ended March
31, 2015 and 2014
(Unaudited)
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.
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.
Note 2. Summary of Significant Accounting Policies
Going Concern
The accompanying financial statements have been prepared in
conformity with GAAP, which contemplates our continuation as a going concern. We have incurred losses to date of $2,206,530. To
date we have funded our operations through advances from a related party, issuance of convertible debt, and the sale of our common
stock. We intend to raise additional funding through third party equity or debt financing. There is no certainty that funding will
be available as needed. These factors raise substantial doubt about our ability to continue operating as a going concern. Our ability
to continue our operations as a going concern, realize the carrying value of our assets, and discharge our liabilities in the normal
course of business is dependent upon our ability to raise capital sufficient to fund our commitments and ongoing losses, and ultimately
generate profitable operations.
Unaudited Interim Financial Statements
The accompanying unaudited condensed consolidated financial
statements of LifeApps Digital Media Inc. at March 31, 2015 and 2014 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 consolidated 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, 2014. 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 March 31, 2015 and 2014 presented
are not necessarily indicative of the results to be expected for the full year. The December 31, 2014 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, 2014.
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.
Accounts Receivable
A significant majority of our sales are through credit cards
and other electronic payment methods. When we do grant credit to our customers it is generally in the form of short term accounts
receivables, normally due in 30 days. The credit worthiness of the customer is evaluated prior to the sale. During the year ended
December 31, 2014 we recorded a reserve for doubtful accounts of $5,109. No adjustment to the reserve was deemed appropriate during
the quarter ended March 31, 2015.
Intangibles
Intangibles, which include websites and databases acquired,
internet domain name costs, and customer lists, are being amortized over the expected useful lives which we estimate to be three
to five years. In accordance with ASC Topic 350 Intangibles – Goodwill and Other (“ASC 350”), the costs
to obtain and register internet domain names were capitalized.
Fixed Assets
Fixed assets are stated at cost less accumulated depreciation
and accumulated impairment loss, if any. Depreciation is calculated on a straight line basis over the estimated useful lives of
the assets. The estimated useful lives used for financial statement purposes are:
LifeApps Digital Media Inc.
Notes to Condensed Consolidated Financial
Statements
For the Three Months Ended March
31, 2015 and 2014
(Unaudited)
Furniture and equipment: 3 years
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.
Cost of Revenue
Cost of revenue includes the cost of amounts paid for articles,
photography, editorial and production cost of the magazine and ongoing web hosting costs. Cost of revenue related to product sales
includes the direct cost of those products sold.
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 three months ended March
31, 2015 and 2014. Research and development expenses amounted to $7,797 and $1,535 for three months ended March 31, 2015 and 2014,
respectively. Research and development expenses were included in general and administrative expenses.
Advertising Costs
We recognize advertising expense when incurred. Advertising
expense was $1,939 and $919 for the three months ended March 31, 2015 and 2014, 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 three months ended March 31, 2015 and 2014, was $2,064 and $961, respectively.
Equity-Based Compensation
Stock-based compensation is presented in accordance with the
guidance of ASC Topic 718, Compensation – Stock Compensation (“ASC 718”). Under the provisions of ASC
718, companies are required to estimate the fair value of share-based payment awards on the date of grant using an option-pricing
model. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service
periods in our consolidated statements of operations.
In prior periods we issued options to purchase our common stock
to employees under our 2012 Equity Incentive Plan which is a qualified stock option plan.
We used the Black-Scholes option-pricing model (“Black-Scholes
model”) to determine fair value. The determination of fair value of share-based payment awards on the date of grant using
an option-pricing model is affected by our stock price as well as assumptions regarding a number of highly complex and subjective
variables. These variables include, but are not limited to, our expected stock price volatility over the term of the awards, and
actual and projected employee stock option exercise behaviors. Although the fair value of employee stock options is determined
in accordance with ASC 718 using an option-pricing model, that value may not be indicative of the fair value observed in a willing
buyer/willing seller market transaction.
There were no options granted during the three months ended
March 31, 2015 or 2014.
Total compensation expense for the three months ended March
31, 2015 and 2014 of all stock based compensation recognized under ASC 718 was $0 and $8,582, respectively.
LifeApps Digital Media Inc.
Notes to Condensed Consolidated Financial
Statements
For the Three Months Ended March
31, 2015 and 2014
(Unaudited)
Income Taxes
The provision for income taxes is determined in accordance with
the provisions of ASC Topic 740, Accounting for Income Taxes (“ASC 740”). Under this method, deferred tax assets and
liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying
amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using
enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to
be recovered or settled. Any effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in
the period that includes the enactment date.
ASC 740 prescribes a comprehensive model for how companies should
recognize, measure, present, and disclose in their financial statements, uncertain tax positions taken or expected to be taken
on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than
not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently
be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement
with the tax authority assuming full knowledge of the position and relevant facts.
For the three months ended March 31, 2015 and 2014 we did not
have any interest and penalties or any significant unrecognized uncertain tax positions.
Recent Pronouncements
From time to time, new accounting pronouncements are issued
that we adopt as of the specified effective date. We believe that the impact of recently issued standards that are not yet effective
may have an impact on our results of operations and financial position. ASU Update 2014-15 Presentation of Financial Statements-Going
Concern (Sub Topic 205-40) issued August 27, 2014 by FASB defines management’s responsibility to evaluate whether there is
substantial doubt about an organization’s ability to continue as a going concern...The additional disclosure requirement
is effective after December 15, 2016 and will be evaluated as to impact and implemented accordingly.
Note 3. Intangible Assets
At March 31, 2015 and December 31, 2014, intangible assets consist
of the following:
| |
March 31, 2015 | | |
December 31, 2014 | |
Internet domain names | |
$ | 58,641 | | |
$ | 58,641 | |
Less accumulated amortization | |
| (42,984 | ) | |
| (38,851 | ) |
| |
$ | 15,658 | | |
$ | 19,790 | |
| |
| | | |
| | |
Website and data bases | |
$ | 56,050 | | |
$ | 56,050 | |
Less accumulated amortization | |
| (37,367 | ) | |
| (32,696 | ) |
| |
$ | 18,683 | | |
$ | 23,354 | |
| |
| | | |
| | |
Customer and supplier lists | |
$ | 4,500 | | |
$ | 4,500 | |
Less accumulated amortization | |
| (1,800 | ) | |
| (1,575 | ) |
| |
$ | 2,700 | | |
$ | 2,925 | |
| |
| | | |
| | |
Total intangibles | |
$ | 119,191 | | |
$ | 119,191 | |
| |
| (82,150 | ) | |
| (73,123 | ) |
| |
$ | 37,041 | | |
$ | 46,069 | |
The amount charged to amortization expense for all intangibles
was $9,027 and $9,028 for the three months ended March 31, 2015 and 2014, respectively
LifeApps Digital Media Inc.
Notes to Condensed Consolidated Financial
Statements
For the Three Months Ended March
31, 2015 and 2014
(Unaudited)
Estimated future amortization expense related to the intangibles
as of March 31, 2015 is as follows:
Year Ended December 31, | |
| |
2015 (nine months remaining) | |
$ | 26,767 | |
2016 | |
| 9,149 | |
2017 | |
| 900 | |
2018 | |
| 225 | |
| |
$ | 37,041 | |
Note 4. Amount Due Shareholder
Parties, which can be a corporation or an 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 cash advances, salary accruals
and 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 March 31, 2015 and December 31, 2014 was $194,314 and $166,364 respectively.
On March 25, 2015, we entered into a debt conversion agreement
with our CEO and principal stockholder, Robert Gayman. The agreement provided Mr. Gayman with the right to convert $31,250 owed
to him for working capital loans made to the Company for 25,000,000 restricted shares of our common stock. The conversion price
was based on the following formula - equal to the lesser of $0.068 or 60% of the lowest trade price ($0.0025) in the 25 trading
days previous to the conversion. (In the event that Conversion Shares are not deliverable by DWAC, an additional 10% discount shall
apply; if the shares are ineligible for deposit into the DTC system and only eligible for Xclearing deposit, an additional 5% discount
shall apply; and in the case of both, an additional cumulative 15% discount shall apply.) The conversion price as calculated was
$0.00125 per share. We recognized a loss on conversion of $47,500, the differ4nce between the conversion price and the closing
trading price on the date of the conversion.
Note 5. Notes Payable
During 2014, we executed a Promissory Note (the “Note”)
and received three draws totaling $135,000. The Note is due March 17, 2016 and provides for an original issue discount of $15,185,
which will be amortized over 24 months, and face interest rate of 12% per annum. The Lender has the right, at any time at its election
to convert all or part of the outstanding and unpaid principal and accrued interest into shares of our common stock. The conversion
price is the lesser of $0.0485 or 50% of the lowest trading price in the 25 trading days prior the conversion. The Note provides
for additional penalties if we cannot deliver the underlying common stock on a timely basis. The Note also provides that the principal
amount may be increased, with the consent of the lender to $445,000.
We evaluated the terms of the conversion features of the convertible
debenture in accordance with ASC Topic No. 815 - 40, Derivatives and Hedging - Contracts in Entity's Own Stock and determined it
is indexed to the Company's common stock and that the conversion features meet the definition of a liability and therefore bifurcated
the conversion feature and accounted for it as a separate derivative liability.
We valued the conversion feature at origination of each draw
at $230,408 using the Black Scholes valuation model with the following assumptions: dividend yield of zero, 1.25 to 2 years to
maturity, risk free interest rate of 0.38% to 0.58% and annualized volatility of 97.34% to 146%. $135,000 of the value assigned
to the derivative liability was recognized as a debt discount on the convertible debenture. The debt discount was recorded as reduction
(contra-liability) to the convertible debenture and is being amortized over the life of the convertible debenture. The balance
of $95,408 of the value assigned to the derivative liability was recognized as origination interest on the derivative liability
and expensed on origination.
We valued the derivative liability and the end of each accounting
period the difference in value is recognized as gain or loss. At March 31, 2015 we determined the valuation using the Black-Sholes
valuation model with the following assumptions: dividend yield of zero, 0.96 years to maturity, risk free interest rate of 0.56%
and annualized volatility of 167%. We recognized $134,895 of expense for the change in value of the derivative for the three months
ended March 31, 2015
LifeApps Digital Media Inc.
Notes to Condensed Consolidated Financial
Statements
For the Three Months Ended March
31, 2015 and 2014
(Unaudited)
During the three months ended March 31, 2015, the lender converted
$21,294 of the principal of the Note into 8,336,731 shares of our $0.001 common stock.
The balance at March 31, 2015 was comprised of:
Convertible notes payable | |
$ | 56,735 | |
Unamortized original issue discount and debt discount | |
| (41,443 | ) |
| |
$ | 15,292 | |
Note 6. Shareholders’ Equity
During the three month ended March 31, 2015 we issued 33,336,731
shares of common stock as a result of conversion of debt. As more fully described in Notes 4 and 5 above, of the shares issued
8,336,731 were to an unrelated note holder and 25,000,000 was to an officer and director of the Company.
Note 7. Stock Based Compensation
In prior periods, 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. Pursuant to the 2012 Plan our
Board of Directors granted options to purchase 6,275,000 shares of our common stock. Subsequent to the grant 300,000 options were
cancelled. No options were granted during the three months ended March 31, 2015 and 2014. The fair value of the options previously
granted, $215,628, was estimated at the date of grant using the Black-Scholes option pricing model, with the following assumptions:
Expected life (in years) | |
| 3 | |
Volatility (based on a comparable company) | |
| 117 | % |
Risk Free interest rate | |
| 0.36 - 0.48 | % |
Dividend yield (on common stock) | |
| - | |
Amounts charged to expense for the options granted to employees
for the three month periods ended March 31, 2015 and 2014 was $0 and $7,773 respectively.
Amounts charged to expense for the options granted to non-employees
for the three month periods ended March 31, 2015 and 2014 was $0 and $810, respectively.
The following is a summary of stock option issued to employees
and directors:
| |
Options | | |
Weighted Average Exercise Price | | |
Weighted Average Remaining Contractual Term (in years) | | |
Aggregate Intrinsic Value | |
| |
| | |
| | |
| | |
| |
Outstanding January 1, 2015 | |
| 4,950,000 | | |
$ | 0.047 | | |
| - | | |
| - | |
Granted | |
| - | | |
$ | - | | |
| - | | |
| - | |
Exercised | |
| - | | |
$ | - | | |
| - | | |
| - | |
Cancelled | |
| - | | |
$ | - | | |
| - | | |
| - | |
Outstanding March 31, 2015 | |
| 4,950,000 | | |
$ | 0.047 | | |
| 1.56 | | |
$ | - | |
Exercisable March 31, 2015 | |
| 4,950,000 | | |
$ | 0.047 | | |
| 1.56 | | |
$ | - | |
LifeApps Digital Media Inc.
Notes to Condensed Consolidated Financial
Statements
For the Three Months Ended March
31, 2015 and 2014
(Unaudited)
There will be no additional compensation expense recognized
in future periods.
The following is a summary of stock options issued to non-employees:
| |
Options | | |
Weighted Average
Exercise Price | | |
Weighted Average Remaining Contractual Term (in years) | | |
Aggregate Intrinsic Value at date of grant | |
| |
| | |
| | |
| | |
| |
Outstanding January 1, 2015 | |
| 1,025,000 | | |
$ | 0.058 | | |
| - | | |
| - | |
Granted | |
| - | | |
$ | - | | |
| - | | |
| - | |
Exercised | |
| - | | |
$ | - | | |
| - | | |
| - | |
Cancelled | |
| - | | |
$ | - | | |
| - | | |
| - | |
Outstanding March 31, 2015 | |
| 1,025,000 | | |
$ | 0.058 | | |
| 1.39 | | |
$ | - | |
Exercisable March 31, 2015 | |
| 1,025,000 | | |
$ | 0.058 | | |
| 1.39 | | |
$ | - | |
There will be no additional compensation expense recognized
in future periods.
Note 8. Outstanding Warrants
There were no warrants issued during the three months ended
March 31, 2015 or 2014. The following is a summary of outstanding warrants as of March 31, 2015:
| |
Number of warrants | | |
Exercise price per share | | |
Average remaining term in years | | |
Aggregate intrinsic value at date of grant | |
| |
| | | |
| | | |
| | | |
| | |
Warrants issued in connection with private placement of units in 2012 | |
| 6,000,000 | | |
$ | 1.00 | | |
| 3.28 | | |
$ | - | |
Note 9. Income Taxes
As previously stated, we account for income taxes in interim
periods in accordance with ASC Topic 740, Income Taxes (“ASC 740”). We have determined an estimated annual effective
tax rate. The rate will be revised, if necessary, as of the end of each successive interim period during our fiscal year to our
best current estimate. As of March 31, 2015 the estimated effective tax rate for the year will be zero.
Note 10. Earnings Per Share
We calculate earnings per share in accordance with ASC Topic
260 Earnings Per Share, which requires a dual presentation of basic and diluted earnings per share. Basic earnings per share
are computed using the weighted average number of shares outstanding during the fiscal year. Diluted earnings per share represent
basic earnings per share adjusted to include the potentially dilutive effect of outstanding stock options and warrants. The dilutive
earnings per share were not calculated because we recorded net losses for the three months ended March 31, 2015 and 2014, and the
outstanding stock options and warrants are anti-dilutive.
LifeApps Digital Media Inc.
Notes to Condensed Consolidated Financial
Statements
For the Three Months Ended March
31, 2015 and 2014
(Unaudited)
Note 11. Business Segments
We currently have two business segments; (i) the sale of physical
products (“Products”) and (ii) digital publishing (“Publishing”). There was only one business segment,
sale of products, in the three months ended March 31, 2015 and 2014. The accounting policies of the segments are the same as those
described in the summary of significant accounting policies.
The publishing segment does not meet the quantitative threshold
for disclosure as outlined ASC Topic 280 Segment Reporting.
All of our revenue is generated in the United States and accordingly
no geographic segment reporting is included.
No customer accounted for 10% percent of our revenues in the
three months ended March 31, 2015. For the three months ended March 31, 2014, one customer accounted for 38.9% of our revenue.
Note 12. Subsequent Events
Management has evaluated all activity and concluded that no
subsequent events have occurred that would require recognition in these financial statements or disclosure in the notes to these
financial statements.
Subsequent to March 31, 2015 the holder of the Note Payable
converted an additional $16,970 of principal and accrued interest of the Note into 15,600,000 shares of our common stock.
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with
the financial information included elsewhere in this Quarterly Report on Form 10-Q (this “Quarterly Report”), including
our unaudited condensed consolidated financial statements as of March 31, 2015 and December 31, 2014 and for the three months ended
March 31, 2015 and 2014 and the related notes. References in this Management’s Discussion and Analysis of Financial Condition
and Results of Operations section to “us,” “we,” “our,” and similar terms refer to LifeApps
Digital Media Inc., a Delaware corporation. This discussion includes forward-looking statements, as that term is defined in the
federal securities laws, based upon current expectations that involve risks and uncertainties, such as plans, objectives, expectations
and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking
statements as a result of a number of factors. Words such as “anticipate,” “estimate,” “plan,”
“continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,”
“will,” “should,” “could,” and similar expressions are used to identify forward-looking statements.
We caution you that these statements are not guarantees of
future performance or events and are subject to a number of uncertainties, risks and other influences, many of which are beyond
our control, which may influence the accuracy of the statements and the projections upon which the statements are based. Factors
that may affect our results include, but are not limited to, the risk factors in Item 2.01 in our Annual Report on Form 10-K filed
with the Securities and Exchange Commission (the “SEC”) on April 15, 2015. Any one or more of these uncertainties,
risks and other influences could materially affect our results of operations and whether forward-looking statements made by us
ultimately prove to be accurate. Our actual results, performance and achievements could differ materially from those expressed
or implied in these forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements,
whether from new information, future events or otherwise.
Overview
We are an emerging growth company and developer and designer
of applications, fitness products, new media, digital magazines, publications, and next-generation social networks for sports,
health, fitness and entertainment enthusiasts. We have a multimarket revenue strategy that incorporates mobile apps, digital magazines,
publications, fitness training devices, web, social media and internet TV to engage consumers in multiple areas of sports, health,
fitness and entertainment interests including medical, yoga, golf, tennis, running, soccer, cycling, and other health, fitness
and sports topics.
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 believe that we will drive revenues by targeting sports, health
and fitness specific communities and developing a relationship with its participants, delivering lifestyle content, social networking,
skills and drills training, consumer fitness devices and nutritional content across multiple platforms including, but not limited
to, Apple iOS and Google Android systems. LifeApps will invest in these sports, health and fitness communities to build customer
loyalty and increase brand awareness by delivering digital content of interest and digitally enhanced physical consumer products
that enrich and improve the user’s sports, health and fitness lifestyle.
We were in the development stage from July 15, 2009 through
March 31, 2013. Our fiscal year ending December 31, 2013 was the first year during which we are considered an operating company
and is no longer in the development stage.
Our financial statements have been prepared in conformity with
accounting principles generally accepted in the United States of America (“GAAP”), which contemplates our continuation
as a going concern. We have incurred losses to date of $2,229,908. To date we have funded our operations through advances from
a related party, issuance of convertible debt, and the sale of our common stock. We intend to raise additional funding through
third party equity or debt financing. There is no certainty that funding will be available as needed. These factors raise substantial
doubt about our ability to continue operating as a going concern. Our ability to continue our operations as a going concern, realize
the carrying value of our assets, and discharge our liabilities in the normal course of business is dependent upon our ability
to raise capital sufficient to fund our commitments and ongoing losses, and ultimately generate profitable operations.
Recent Developments
Acquisition of the Sports One Group Assets
On April 1, 2013, we closed the acquisition by LifeApps of substantially
all of the assets of Sports One Group, an internet based wholesale supplier of fitness apparel and related items to the promotional
products industry, for a purchase price of $99,500.
Plan of Operations
LifeApps® is aggressively pushing
forward on a strategy for utilizing mobile applications related to healthcare with the LifeApps® Health initiative. LifeApps
Health, building on the success of the LifeApps MDWorkout mobile app platform, will bring together consumer mHealth lifestyle products,
like-minded medical health organizations and medically based health and fitness research organizations to create apps. The convergence
of consumer apps with medical programs and clinical research is an exciting milestone in the mHealth marketplace. LifeApps believes
that its unique position as an established market participant in providing medically based mHealth fitness lifestyle apps will
make LifeApps Health the desired partner for medical organizations who are looking for guidance, app development and distribution
into the mHealth marketplace. We believe that we will drive revenues by targeting sports, health and fitness specific communities
and developing a relationship with their participants, delivering lifestyle content, social networking, skills and drills training,
consumer fitness devices and nutritional content across multiple platforms including, but not limited to, Apple iOS and Google
Android systems. LifeApps plans to invest in these sports, health and fitness communities through partnerships with trusted medical
organizations, increasing brand awareness and delivering digital content of interest and digitally enhanced physical consumer products
that enrich and improve the user’s sports, health and fitness lifestyle.
Critical Accounting Policies and Estimates
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.
Fair Value Measurements:
ASC Topic 820, Fair Value Measurements and Disclosures ("ASC
820"), provides a comprehensive framework for measuring fair value and expands disclosures which are required about fair value
measurements. Specifically, ASC 820 sets forth a definition of fair value and establishes a hierarchy prioritizing the inputs to
valuation techniques, giving the highest priority to quoted prices in active markets for identical assets and liabilities and the
lowest priority to unobservable value inputs. ASC 820 defines the hierarchy as follows:
Level 1 – Quoted prices are available in active
markets for identical assets or liabilities as of the reported date. The types of assets and liabilities included in Level 1 are
highly liquid and actively traded instruments with quoted prices, such as equities listed on the New York Stock Exchange.
Level 2 – Pricing inputs are other than quoted
prices in active markets, but are either directly or indirectly observable as of the reported date. The types of assets and liabilities
in Level 2 are typically either comparable to actively traded securities or contracts, or priced with models using highly observable
inputs.
Level 3 – Significant inputs to pricing that
are unobservable as of the reporting date. The types of assets and liabilities included in Level 3 are those with inputs requiring
significant management judgment or estimation, such as complex and subjective models and forecasts used to determine the fair value
of financial transmission rights.
Our financial instruments consist of cash and cash equivalents,
short-term trade receivables, prepaid expenses, payables, accruals and convertible notes payable. The carrying values of cash and
cash equivalents, short-term trade receivables, prepaid expenses, payables, and accruals approximate fair value because of the
short term maturities of these instruments.
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.
Intangibles
Intangibles, which include websites and databases acquired,
internet domain name costs, and customer lists, are being amortized over the expected useful lives which we estimate to be three
to five years. In accordance with Financial Accounting Standards Board (“FASB”), Accounting Standards Codification
(“ASC”) Topic 350 Intangibles – Goodwill and Other (“ASC 350”), the costs to obtain and register
internet domain names were capitalized.
Derivative Financial Instruments:
We do not use derivative instruments to hedge exposures to cash
flow, market or foreign currency risks. We evaluate all of our financial instruments to determine if such instruments are derivatives
or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities,
the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in
the fair value reported in the statements of operations. For stock-based derivative financial instruments, we used a Black Scholes
valuation model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative
instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each
reporting period. Derivative liabilities are classified in the balance sheet as current or non-current based on whether or not
net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date.
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.
Cost of Revenue
Cost of revenue includes the cost of amounts paid for articles,
photography, editorial and production cost of the magazine and ongoing web hosting costs. Cost of revenue related to product sales
includes the direct cost of those products sold.
Equity Based Payments
Equity based payments are accounted for in accordance with ASC
Topic 718, Compensation – Stock Compensation. The compensation cost is based upon fair value of the equity instrument
at the date grant. The fair value has been estimated using the Black-Sholes option pricing model.
Results of Operations
Three months ended March 31, 2015, compared with the respective
period ended March 31, 2014
Revenues for three months ended March 31, 2015 and 2014 were
$61,317 and $121,293, respectively. Revenues for the three months ended March 31, 2015 and 2014 were derived primarily from the
sale of sports apparel and health and fitness products. Revenue for the three months ended March 31, 2015 declined by $59,976 (49.5%)
due to an across the board downturn in our business.
Cost of revenue normally includes our cost of products sold
and amounts paid for articles, photography, editorial and production cost of the magazine. In the future we will incur direct cost
related to revenue such as webhosting and direct cost for our customer support. For the foreseeable future we anticipate outsourcing
such costs.
Cost of revenue for three months ended March 31, 2015
was $40,844 (66.6%). This resulted in a gross profit of $20,473(10.3%). Cost of revenue for three months ended March 31, 2014
was $108,780 (89.7%). This resulted in a gross profit of $12,513 (10.3%). Costs were primarily the cost of products sold.
The increase in the cost of revenue as a percentage of sales during the current quarter was primarily a result of two large
sales in the three month ended March 31, 2014 that were made at our cost.
The following is a breakdown of our selling, general and administrative
expenses for the three months ended March 31, 2015 and 2014:
| |
Three Months Ended March 31, | |
| |
2015 | | |
2014 | | |
Difference | |
Personnel costs | |
$ | 46,697 | | |
$ | 18,694 | | |
$ | 28,003 | |
Professional fees | |
| 22,010 | | |
| 11,860 | | |
| 10,150 | |
Marketing, and promotion advertising | |
| 22,730 | | |
| 4,671 | | |
| 18,059 | |
Stock Related Expenses | |
| 959 | | |
| 9,295 | | |
| (8,336 | ) |
Equity based payments | |
| - | | |
| 8,582 | | |
| (8,582 | ) |
Research and development | |
| 7,797 | | |
| 1,535 | | |
| 6,262 | |
Travel and entertainment | |
| 1,645 | | |
| 5,473 | | |
| (3,828 | ) |
Rent expense | |
| 2,064 | | |
| 961 | | |
| 1,103 | |
Other expenses | |
| 9,419 | | |
| 12,814 | | |
| (3,395 | ) |
| |
$ | 113,321 | | |
$ | 73,884 | | |
$ | 39,437 | |
In 2014 our CEO did not receive his full compensation. We accrued
all of his salary in 2015.
Professional fees increased $10,150 (85,6%) from $11,860 for
the three months ended March 31, 2014 to $22,010 for the three months ended March 31, 2015. The increase is a result of increases
in our cost of SEC compliance and increased activity that required legal counsel.
Our marketing and promotional expenses increased by $18,059
(386%) for the three months ended March 31, 2015 as a result of attending more trade shows than in 2014
Our equity based payment expense decreased as the deferred portion
of the expense related to previously issued equity instruments was fully amortized in 2014.
Research and development includes website and applications development
costs. Research and development expenses increased $6,262 (408%) from $1,535 for 2015 to $7,797 for 20154. We made no major changes
to our applications in 2014 whereas in 2015 we updated most of our applications. Development is an ongoing cost and we anticipate
that our development costs both for website and applications may increase in future periods.
Travel and entertainment decreased $3,828 (69.9%) from $5,473
in 2014 to $1,645 in 2015. Our travel was limited in 2015 as most of our efforts were local in nature and did not require travel.
All of our other operating costs decreased as result of generally
keeping cost down.
We had operating losses of $102,516 and $71,039 for 2015 and
2014, respectively.
We value the derivative liability and the end of each accounting
period the difference in value is recognized as gain or loss. We recognized $134,895 of loss for the change in value of the derivative
for 2015. We had no derivative liabilities in the first quarter of 2014. In addition we had a loss of $47,500 on conversion of
debt due to an officer and shareholder of the Company.
We had net losses of $299,542 and $71,666 for three months ended
March 31, 2015 and 2014, respectively.
Liquidity and Capital Resources
We were financed primarily by capital contributions from members
of LifeApps LLC, the predecessor to LifeApps, from short term borrowings, and through our private placement which we completed
in October 2012. Our existing sources of liquidity may not be sufficient for us to implement our initial business plan. Our need
for future capital will be dependent upon the speed at which we expand our product offerings. There are no assurances that we will
be able raise additional capital as needed.
As of March 31, 2015, we had negative working capital of $(320,018)
as compared to $(263,319) at December 31, 2014.
During the three months ended March 31, 2015 and 2014, operations
used cash of $33,114 and $76,259 respectively.
During 2014, we executed a Promissory Note and received three
draws totaling $135,000 of which $75,000 was received during the quarter ended March 31st. The Note is due March 17, 2016 and provides
for an original issue discount of $15,185, which will be amortized over 24 months, and face interest rate of 12% per annum. The
Lender has the right, at any time at its election to convert all or part of the outstanding and unpaid principal and accrued interest
into shares of our common stock. The conversion price is the lesser of $0.0485 or 60% of the lowest trading price in the 25 trading
days prior the conversion. The Note provides for additional penalties if we cannot deliver the underlying common stock on a timely
basis. The Note also provides that the principal amount may be increased, with the consent of the lender to $445,000.
Additionally we received net amounts of $21,700 and $30,500
of cash advances from our chief executive officer during the three months ended March 31, 2015 and 2014, respectively. Also during
the quarter ended March 31, 2015 our chief executive converted $31,250 of cash advances into 25,000,000 shares of common stock
at a conversion rate based on the trading value of our common stock during a predetermined period.
We will continue to seek out additional capital in the form
of debt or equity under the most favorable terms we can find.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
We are a smaller reporting company as defined by Rule 12b-2
of the Securities and Exchange Act of 1934, as amended (the "Exchange Act") and are not required to provide
the information required under this item.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Pursuant to Rule 13a-15(b) under the Securities Exchange Act
of 1934 (“Exchange Act”), the Company carried out an evaluation, with the participation of the Company’s management,
including the Company’s Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) (the
Company’s principal financial and accounting officer), of the effectiveness of the Company’s disclosure controls and
procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon
that evaluation, the Company’s CEO and CFO concluded that the Company’s disclosure controls and procedures are not
effective , due to a lack of audit committee and segregation of duties caused by limited personnel, to ensure that information
required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act, is recorded, processed,
summarized and reported, within the time periods specified in the SEC’s rules and forms, and that such information is accumulated
and communicated to the Company’s management, including the Company’s CEO and CFO, as appropriate, to allow timely
decisions regarding required disclosure.
Limitations on Effectiveness of Controls and Procedures
Our management, including our Chief Executive Officer (Principal
Executive Officer) and Chief Financial Officer (Principal Financial Officer), does not expect that our disclosure controls and
procedures 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 the Company have been detected. These inherent limitations include, but are not limited
to, the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake.
Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management
override of the control. 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.
Management believes that the material weakness set forth above
did not have an effect on our financial results.
Changes in Internal Control over Financial Reporting
There have been no change in the Company's internal control
over financial reporting during the three months ended March 31, 2015 that has materially affected, or is reasonably likely to
materially affect, our internal control over financial reporting.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There are no pending, nor to our knowledge threatened, legal
proceedings against us.
ITEM 1A. RISK FACTORS
For information regarding risk factors, please refer to the
Company’s Annual Report on Form 10-K filed with the SEC on April 15, 2015, which may be accessed via EDGAR through the Internet
at www.sec.gov.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURE
Not Applicable.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS
The following exhibits are filed herewith:
Exhibit No. |
|
Description |
31.1 |
|
Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
31.2 |
|
Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
32.1* |
|
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
32.2* |
|
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
101.INS ** |
|
XBRL Instance Document |
101.SCH ** |
|
XBRL Taxonomy Extension Schema Document |
101.CAL ** |
|
XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF ** |
|
XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB ** |
|
XBRL Taxonomy Extension Label Linkbase Document |
101.PRE ** |
|
XBRL Taxonomy Extension Presentation Linkbase Document |
_______________
* 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
SIGNATURES
In accordance with 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.
|
LifeApps Digital Media Inc. |
|
|
Date: May 20, 2015 |
By: |
/s/ Robert Gayman |
|
|
Robert Gayman |
|
|
Chief Executive Officer and President |
By: |
/s/ Arnold Tinter |
|
|
Arnold Tinter |
|
|
Chief Financial Officer and Treasurer |
|
Exhibit 31.1
Certification of Principal Executive
Officer and Principal Financial Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act
of 2002
I, Robert Gayman, certify that:
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. |
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: May 20, 2015 |
By: |
/s/ Robert Gayman |
|
Robert Gayman |
|
Chief Executive Officer and President
(Principal Executive Officer) |
Exhibit 31.2
Certification of Principal Executive
Officer and Principal Financial Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act
of 2002
I, Arnold Tinter, certify that:
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. |
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: May 20, 2015 |
By: |
/s/Arnold Tinter |
|
Arnold Tinter |
|
Chief Financial Officer and Treasurer
(Principal Financial Officer) |
Exhibit 32.1
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION
1350
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report
of Prime Time Travel, Inc. (the "Company") on Form 10-Q, for the fiscal quarter ended March 31, 2015, as filed with
the Securities and Exchange Commission on the date hereof (the "Report"), I, Robert Gayman, Chief Executive Officer and
President of LifeApps Digital Media Inc., certify, pursuant to 18 U.S.C. ss.1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, that, to the best of my knowledge:
(1) The Report fully
complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
(2) The information
contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: May 20, 2015 |
By: |
/s/Robert Gayman |
|
|
Robert Gayman |
|
|
Chief Executive Officer and President
(Principal Executive Officer)
|
|
Exhibit 32.2
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION
1350
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report
of Prime Time Travel, Inc. (the "Company") on Form 10-Q, for the fiscal quarter ended March 31, 2015, as filed with
the Securities and Exchange Commission on the date hereof (the "Report"), I, Arnold Tinter, Chief Financial Officer and
President of LifeApps Digital Media Inc., certify, pursuant to 18 U.S.C. ss.1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, that, to the best of my knowledge:
(1) The Report fully
complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
(2) The information
contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: May 20, 2015 |
By: |
/s/Arnold Tinter |
|
|
Arnold Tinter |
|
|
Chief Financial Officer and Treasurer
(Principal Financial Officer)
|
|
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