U. S. Securities and Exchange Commission

Washington, D.C. 20549

FORM 10-K


x ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended February 28, 2015

December 31, 2017

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

For the transition period from _______________ to _______________

Commission File No. 333-148005

LINGERIE FIGHTING CHAMPIONSHIPS, INC.
 (Name of small business issuer as in its charter)

Nevada20-8009362

LINGERIE FIGHTING CHAMPIONSHIPS, INC.

(Name of small business issuer as in its charter)

Nevada

20-8009362

(State or other jurisdiction of

incorporation or organization)

(IRS Employer

Identification No.)

6955 North Durango Drive,

Suite 1115-129

Las Vegas, NV 89149

 (Address

(Address of principal executive offices, Zip Code)


(702) 527-2942

 (Registrant's

(Registrant's telephone number, including area code)


Copies to:
Asher S. Levitsky PC
Ellenoff Grossman &Schole, LLP
1345 Avenue of the Americas, Suite 1100
New York, New York 10105-0302
Phone: (212) 370-1300
Fax: (646) 895-7182
E-mail: alevitsky@egsllp.com


Securities Registered under Section 12(b) of the Exchange Act: None

Securities Registered under Section 12(g) of the Exchange Act: None


Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. o¨ Yes    x No


Indicate by check mark if the registrant is not required to file reports pursuant Section 13 or 15(d) of the Exchange Act. ¨ Yes   x No


Note – Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Exchange Act from their obligations under those Sections


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. xYes    ¨ 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). ☐x Yes    ☒No


¨ No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨


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

Large accelerated filer

¨ 

Accelerated filer

¨

Non-accelerated filer

¨

(Do not check if a smaller reporting company)

Smaller reporting company

x

Emerging growth company

¨


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

On August 31, 2014, the last day of our most recent second quarter, thex No

The aggregate market value of registrant’s voting and nonvotingnon-voting common stockequity held by non-affiliates (as defined by Rule 12b-2 of the registrant, based uponExchange Act) computed by reference to the closingaverage bid quotation for the registrant'sand asked price of such common stock,equity on June 30, 2017, was approximately $16,992,160.


$222,143. The number of shares of registrant's common stock outstanding as of June 2, 2015July 19, 2018 was 19,674,977.
665,925,639.


LINGERIE FIGHTING CHAMPIONSHIPS, INC.

(formerly known as Cala Energy Corp.)
2015

2016 ANNUAL REPORT ON FORM 10-K

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EXPLANATORY NOTE 


This annual report on 10-K describes the business of the registrant as of February 28, 2015, at which time the registrant was a shell company.  Effective March 31, 2015, the registrant acquired all of the capital stock of Lingerie Fighting Championships, Inc. ("LFC") in a transaction which is treated as a reverse acquisition.  LFC was a Nevada corporation, incorporated in July 2014. LFC's activities from inception through December 31, 2014, were devoted primarily to the development, production, promotion and distribution of original entertainment which we plan to make commercially available predominantly through live entertainment events, as well as through digital home video, broadcast television networks, video-on-demand and digital media channels, although LFC did not produce any events since its organization. As a result, effective with the reverse acquisition, we have ceased to be a shell company. As a result of, and in connection with, the reverse acquisition:

·

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We issued to the holders of the LFC common stock and convertible notes a total of 16,750,000 shares of our common stock;
·We issued 2,500,000 additional shares of common stock for $200,000 in a private placement of our common stock at a purchase price of $0.08 per share;
·The shares of common stock issued to the holders of the LFC common stock and convertible notes represents approximately 85.1% of our outstanding common stock after giving effect to the reverse split, the reverse acquisition and the private placement;
·Our business became the business of LFC;
·We changed our corporate name to Lingerie Fighting Championships, Inc.;
·We changed our fiscal year to the calendar year, which is the fiscal year of LFC prior to the reverse acquisition;
·Shaun Donnelly, who was the sole director and chief executive officer of LFC, became a director and chief executive officer;
·LFC was merged into us on April 2, 2015.
On April 7, 2015, we filed with the SEC an 8-K (the "Super 8-K") which described the business of LFC and included its audited financial statements for the period from July 21, 2014 (inception) to December 31, 2014.  Information concerning the business of LFC, which is now our business, including risks associated with the business of LFC, LFC's financial statements and pro forma financial statements, and the exhibits relating to the reverse acquisition, including the share exchange agreement, and the contemporaneous private placement, are contained in the Super 8-K and are not included in this Form 10-K.  On May 20, 2015, we filed a quarterly report on Form 10-Q (the "March 2015 10-Q") for the quarter ended March 31, 2015, which reflected the business of LFC for the three months ended March 31, 2015.

This Form 10-K describes our business as it existed on February 28, 2015, and the risks associated with such business (other than those relating to our status as a shell company), and does not describe our current business.  It also includes our audited financial statements for the years ended February 28, 2015 and 2014 based on our operations as they existed during such years.  The information contained in Part III of this Form 10-K reflects information concerning our current directors, officers, and principal shareholders.  As a result of the reverse acquisition, LFC is the accounting acquiring party, and, as a result, in future filings, the comparable financial statements for prior periods will reflect the operations of LFC.

Readers should carefully read the Super 8-K and the March 2015 10-Q for information concerning our current operations.

All share and per share information in this Form 10-K reflects the 800-for-one reverse split which became effective on March 20, 2015.

References in this annual report to "we," "us," and words of like import refer to Lingerie Fighting Championships, Inc. which was then known as Cala Energy Corp.  References to LFC refer to Lingerie Fighting Championships, Inc. prior to the reverse application.

FORWARD LOOKING STATEMENTS

This annual report on Form 10-K contains forward-looking statements regarding our business, financial condition, results of operations and prospects. Words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates" and similar expressions or variations of such words are intended to identify forward-looking statements, but are not deemed to represent an all-inclusive means of identifying forward-looking statements as denoted in this annual report on Form 10-K. Additionally, statements concerning future matters are forward-looking statements.

Although forward-looking statements in this annual report on Form 10-K reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by us. Consequently, forward-lookingforward- looking statements are inherently subject to risks and uncertainties and actual results and outcomes may differ materially from the results and outcomes discussed in or anticipated by the forward-looking statements. Factors that could cause or contribute to such differences in results and outcomes include, without limitation, those specifically addressed under the headings "Risks Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in this Form 10-K and in the Super 8-K and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the March 2015 10-Q.10-K. You are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this Annual Report on Form 10-K. We file reports with the SEC. The SEC maintains a website (www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, including us. You can also read and copy any materials we file with the SEC at the SEC's Public Reference Room at 100 F Street, NE, Washington, DC 20549. You can obtain additional information about the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.

We undertake no obligation to revise or update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this annual report on Form 10-K, except as required by law. Readers are urged to carefully review and consider the various disclosures made throughout the entirety of this annual report, which are designed to advise interested parties of the risks and factors that may affect our business, financial condition, results of operations and prospects.


PART I

ITEM 1. BUSINESS.

During

As used in this Annual Report, “we,” “us,” “our,” “LFC,” “Company” or “our Company” refers to Lingerie Fighting Championships, Inc.

History

We were incorporated in Nevada on November 29, 2006 under the years ended February 28, 2015name Sparking Events, Inc., and 2014,on September 16, 2013 our corporate name was changed to Cala Energy Corp., (formally, Xodtec LED, Inc.) under which we were not engaged in anythe business activities,of offering services, such as enhanced oil recovery and wematerial supplies, to gas and oil fields predominantly located in Southeast Asia. We were considered to be a shell company.  We evaluated potential businessesnot successful in which we may engage or which we may acquire,our efforts and ondiscontinued this line of business. 

On March 31, 2015, we acquired LFCthe Company, pursuant to a share exchange agreement with(the "Share Exchange Agreement"), among the shareholdersCompany, Lingerie Fighting Championships, Inc. (“LFC”), and the holders of all of the outstanding common stock and convertible debtnotes of LFC pursuant to which we issuedexchanged their common stock and convertible notes of LFC for a total of 16,750,000 shares of common stock, and,which represented 84.70% of the Company's common stock after giving effect to the issuance of the shares pursuant to a private placement, we issued 2,500,000the Share Exchange Agreement and the shares of common stock at $0.08 per share, or a total of $200,000.  The business of LFC, including risk factors relating to the business, the financial statements of LFC, including Management's Discussion and Analysis of Financial Condition and Results of Operations, and the exhibits relating to the reverse acquisition andissued in the private placement are includeddescribed in the Super 8-K and are discussed in the March 2015 10-Q.


From April 2009 until July 13, 2012, through our subsidiaries, we were engaged in design, marketing and selling of advanced lighting solutions which are designed to use less energy and have a longer life than traditional incandescent, halogen, fluorescent light sources.   We were not able to generate profit from operations for during this period.  For the last years that we were in that business, we financed our operations primarily from funds provided by our officers and directors.
On July 13, 2012, pursuant to agreements with one of our former directors, we transferred the stock in our subsidiaries and our 35% ownership in an inactive company to the former director in exchange for cancellation of debt totaling $100,000.  As a resultfollowing paragraph. The issuance of the transfer of the subsidiaries, we were no longer engaged in the lighting solutions business.  We transferred the stock of the subsidiaries because we felt that, as a result of our continuing losses and our inability to develop the business as we had planned, it was not in our best interest to continue in this business.
On July 14, 2012 Morgan Stanley Smith Barney Custodian fbo Terry Butler Roth IRA (the "Butler Roth IRA") acquired, for nominal consideration, 31,23616,750,000 shares of common stock fromto the director who acquired the subsidiaries and 24,252 sharesformer holders of LFC's common stock from our then chief executive officer, who was also a director.  On July 18, 2012,and convertible notes in exchange for the Butler Roth IRA and we entered into a loan agreement pursuantcapital stock of LFC is referred to whichas the Butler Roth IRA agreed to lend us up to $150,000, for which we issued our 6% demand promissory note in the principal amount of $150,000.reverse acquisition transaction. The securities were issued in Mr. Butler's name.
On September 14, 2012, we entered into agreement pursuant to which we issued to Terry Butler, who was then our sole director and chief executive officer 131,037 shares of common stockLFC became a director and 5,000,000 shares of a newly-created series of preferred stock, which was designated as the series A convertible preferred stock, in considerationchief executive officer of the cancellation of debt due to the Butler Roth IRA in the amount of $819,319.
On May 23, 2013, Mr. Butler sold to Jia Hang 182,832 shares of common stock and 5,000,000 shares of series A convertible preferred stock forCompany. As a total consideration of $300.  The preferred stock became convertible into 125,000 shares of common stock on May 30, 2013, upon the filing of an amendment to our articles of incorporation increasing our authorized common stock to 400,000,000 shares.  Upon such conversion Mr. Hang owned 307,832 shares of common stock, representing 72.5%result of the then outstanding common stock.

We initially planned to focus on providing an internet based security system to companies that would like to replace security guards with video cameras that are monitored 24/7.  Through February 28, 2014, we did not generate any revenue from this new proposed business, and we discontinued our efforts with respect to that business.
We subsequently considered providing enhanced oil recovery services and supplying materials to existing operators of oil fields in Indonesia.  We were unable to develop that business and, during the year ended February 28, 2015, we investigated other potential acquisition candidates, and, on March 31, 2015, we acquired LFC in a reverse acquisition, transaction.

the Company's business has become the business of LFC.

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


Organization

Effective as of April 1, 2015, we changed our name to "Lingerie Fighting Championships, Inc." a name which more accurately represents our new business. We areeffected the name change by virtue of a Nevada corporation incorporated on November 29, 2006,short form merger, pursuant to which LFC (our wholly owned subsidiary after the LFC Acquisition) merged with and into the Company, with the Company remaining as the surviving parent corporation. In connection with the name change, we submitted to FINRA a voluntary request for the change of our OTC trading symbol. Our Common Stock now trades under the name Sparking Events, Inc.  Our corporate name was changed to Xodtec Group USA, Inc.symbol “BOTY”.

As a result of, and in June 2009, Xodtec LED, Inc. in May 2010, Cala Energy Corp. in September 2013, and to Lingerie Fighting Championships, Inc. on April 1, 2015.

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We do not have a principal office.  Our mailing address is 6955 North Durango, Suite 1115-129, Las Vegas, NV, 89149, telephone (702) 527-2942.  Our website is lingeriefc.com.  Information contained on our website does not constitute a part of this Form 10-K.

Our Business
During the year ended February 28, 2015 we were a shell company.  On March 31, 2015, we acquired LFC in a reverse acquisition transaction.  The business of LFC, including risk factors relating to the business, and the financial statements of LFC, including "Management's Discussion and Analysis of Financial Condition and Results of Operations," and the exhibits relating toconnection with, the reverse acquisition, the Company changed its fiscal year to December 31, which was LFC's fiscal year, from a fiscal year ending February 28.

On April 20, 2015, the Company effected a one-for-800 reverse split, pursuant to which each share of common stock was converted into, and became 1/800 of a share of common stock, with fractional shares being rounded up to the private placement are described in the Super 8-K and the March 2015 10-Q.next higher whole number of shares. As a result of the reverse acquisition,split, the 339,757,357 shares of common stock, then outstanding, became and were converted into 424,977 shares. All references to shares of common stock and per share information retroactively reflect the reverse split.

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

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

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

On November 22, 2016, the Company filed a Certificate of Amendment to the Company’s Articles of Incorporation (the “Amendment”) with the Secretary of State of Nevada to increase the number of authorized shares of common stock, par value $0.001 per share, from four hundred million (400,000,000) shares to one billion (1,000,000,000) shares. A true and correct copy of the Amendment is filed as Exhibit 3.1 to this report.

On January 23, 2017, the Company filed a Certificate of Amendment to the Company’s Articles of Incorporation (the “Amendment”) with the Secretary of State of Nevada to increase the number of authorized shares of common stock, par value $0.001 per share, from one billion (1,000,000,000) shares to one billion two hundred million (1,200,000,000) shares. The Company did not timely comply with the requirements of Regulation 14C under the Exchange Act for the above referenced increases in the Company’s authorized common shares. This would have required us to circulate an information statement describing the corporate actions taken above by the written consent of a majority of our shareholders at least 20 days prior to the effective date of the corporate action. We did however have super majority shareholder consent as required for amending the articles of incorporation. The failure to initially comply with Regulation 14C in a timely manner was inadvertent, and while not probable, could cause the SEC to bring an enforcement action or commence litigation against us for failure to comply with Regulation 14C. Such enforcement could subject us to penalties including the payment of fines or damages. Any such claims or actions could cause us to expend financial resources to defend ourselves, and could divert the attention of our management from our core business.

On November 2, 2017, the Company filed a Certificate of Amendment to the Company’s Articles of Incorporation (the “Amendment”) with the Secretary of State of Nevada to increase the number of authorized shares of common stock, par value $0.001 per share, from one billion two hundred million (1,200,000,000) shares to five billion (5,000,000,000) shares. A true and correct copy of the Amendment is filed as Exhibit 3.1 to this report. 

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Our Business

Our LFC business becameand brand is focused on building and establishing a sports entertainment league that utilizes wrestling and mixed martial arts ("MMA") fighting techniques together with fictional character personas, parodies of public figures and professional sporting leagues and fictional storylines for purposes of providing entertainment. We seek to promote and market our brand, our programming, our events and our products.

Our mission is to establish the businesspopularity of our LFC whichleague and brand based on the future success of our athletes, fictional character personas and other entertainment value. Our uniqueness is derived from our predominantly all female league structure, where a vast array of beautiful, attractive and unique women engage in a provocatively scripted version of wrestling and MMA fighting techniques against one another for purposes of delivering high quality entertainment to mature audiences.

Our management believes that the businessLFC league and our unique approach in applying a predominantly all female league structure to wrestling and mixed martial arts gives us a substantial competitive advantage to build the popularity of developingthe LFC league in general.

Parody, Satire and marketingDrama

Our entertainment also involves the development of original fictional characters or settings that both directly and indirectly references other athletes, professional figures, sports entertainment leagues, athletic events and/or celebrity personas through parody and/or satire or drama with the intent to highlight and create irreverent, funny or dramatic characters and situations that mock, what we believe to be, an over-promoted pop phenomena prevalent in today's media and sports entertainment leagues.

Our Events

Our operations seek to be organized around the development, promotion and distribution of our live events and televised entertainment programming. We also seek to develop branding and merchandising avenues for revenues.

Live Events

We seek to produce and market our first live entertainment involvingevent in Las Vegas, NV, and intend expand our entertainment events into other cities and states. Our live events will capture scripted mixed marital artsand choreographed live action fight sequences, as well as pre-fight and post-fight reports, to be recorded and edited by our in-house production team and serve as the live action fictional content for our video and television programming. It is intended that these live events will be promoted through a variety of media outlets, including television, radio, print, the Internet and local grass roots marketing efforts.

To date, we have conducted one live entertainment event and continue to promote the LFC brand through our various YouTube® channels, advertising videos and other related promotional materials.

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We launched our first full regular season of the LFC sporting events in May of 2015, which took place in Nevada. Since than we have held events in California, North Dakota and Internationally in Bratislava, Slovakia. We will continue to work on obtaining contracts with both our current and prospective entertainers.

Video Programming

We are an independent producer of video programming for digital home video and intend to develop such video programming for broadcast television, cable television, pay-per-view and video-on-demand markets. We produce scripted style fights featuring attractive and athletic women,females of the LFC league clothed in lingerie. Our featured episodes, called the Lingerie Fighting Championships, will include live action content stylized and modeled in the format of a reality television series.

Each episode will be 120 minutes in length and features variable lengths of choreographed fight sequences, fighter vignettes and behind the scenes footage, pre-fight and post-fight commentary, as well as entertaining fictional storylines that combine drama, parody and satire.

Television Programming; Pay-Per View Programming

We will produce and own our television programming and video library and believe that pay-per-view and video-on- demand television distribution presents opportunities to generate revenue for our business. In an effort to build our LFC brand, we plan to distribute our live event programming through pay-per-view and video-on-demand television outlets in the future.

Home Video

We expect to pursue opportunities in the home video market by licensing, on a distribution fee and/or royalty basis our growing video library to third parties to develop, produce, manufacture, and sell DVDs for the home video market. We hope to develop a video library with proprietary material from our live events, television broadcasts, special events and behind the scenes content of live events. To date, we have developed and produced an LFC DVD entitled "Lingerie Fighting Championships: Lace vs Leather" which is currently being sold on the LFC official website (www.lingeriefc.com) as well as Amazon.com.

It is intended that we will continue to produce develop our video programming to be sold in DVD volume installments in retail stores and on-line via such e-commerce platforms such as the LFC official site (www.lingeriefc.com) and other third party retailers including, but not limited to, Amazon® and iTunes®. We are currently in discussion with various other retailers specializing in home video distribution. All references herein to Amazon®, iTunes®, YouTube® or Facebook® are to websites operated by such entities and we do not have any rights, affiliation or license with them other than the presence of our media or products on such media platforms as set forth herein.

Online Programming

We utilize the Internet to communicate with our fans and market and distribute our various programming. Through our network of websites and social media, our fans and customers can obtain the latest news and information on the LFC, purchase our live event tickets, home video programming, and purchase our branded merchandise. Our main site is www.lingeriefc.com. We will promote www.lingeriefc.com at our live events and on our televised programming.

The Company utilizes a Facebook page that has accrued a modest fan base of followers (http://www.facebook.com/lfcfighting). We also have two (2) YouTube® channels with a small, growing fan base. We will seek to hire administrative employees to administer and build our social media presence.

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Branded Merchandise

Licensing and Direct Sales. We believe that licensing of LFC names, logos and copyrighted works on a variety of retail products presents a further opportunity to generate revenues. As our brand grows, we expect to pursue greater opportunities to expand our licensing efforts through a more comprehensive licensing program.

Competition

Competition for Viewers. The entertainment market in which we operate has a limited fan base and is highly competitive. We must compete for the time and attention of viewers with more established content programming and entertainment value. We compete on the basis of a number of factors, including quality of experience, relevance, accessibility, perceptions of ad load, brand awareness and reputation.

List of Competitors. Our events, we anticipate, caters to a niche audience. Our audience, we anticipate, will consist primarily of a mature audience with an appreciation of MMA and contact sports and professional wrestling. We compete with athletic events as well as mature audience entertainment. While we do pride our business model on having an athletic appeal, we do not deem ourselves as a conventional full contact sport, and our events are designed as scripted fictional entertainment. For additional details on risks related to competition for listeners, please refer to the section entitled "Risk Factors."

Our competitors include among others:

·

Sports Entertainment Providers. We compete on a national basis primarily with World Wrestling Entertainment, Inc., and its subsidiaries (collectively, the "WWE") and Zuffa, LLC, the American sports promotion company specializing in mixed martial arts and parent company of the Ultimate Fighting Championship league (collectively, the "UFC"). We will have to compete with WWE and the UFC in many aspects of our business, including viewership, application of mixed martial arts, access to arenas, the sale and licensing of branded merchandise and distribution channels for our televised programs. We also directly compete to find, hire and retain talented performers. WWE and UFC has substantially greater financial resources than we do, and already has an established fan base and following, and are affiliated with television cable networks on which WWE's and UFC's programs are aired. Other sources of competition in our sports entertainment market are regional promoters of wrestling events.

·

Television Network Scheduling. Conventional sports channels may not accept us or may limit us to less popular time slots. Because we are not a conventional sports league, and due to the mature target audience for our events, mainstream sporting channels may not accept us or may limit our events to mid-day, late night or "half time" type channel slots, as opposed to prime-time televised scheduling.

·

Other Forms of Media. We compete for the time and attention of our listeners with providers of other forms of in- home and mobile entertainment. We rely on having a modest but growing YouTube® following. To the extent existing or potential viewers choose to watch cable television, stream video from on-demand services such as Netflix, Hulu, VEVO or YouTube or play interactive video games on their home-entertainment system, computer or mobile phone rather than view our LFC programming or attend our live events, these content services pose a competitive threat.

Government Regulation

Live Events. In various states in the United States and some foreign jurisdictions, athletic commissions and other applicable regulatory agencies require fighting leagues to obtain licenses for promoters, medical clearances and/or other permits or licenses for performers and/or permits for events in order for us to promote and conduct live events. Since we are scripted and not a full contact competitive sport, we are not subject to such regulation. If rules change or if our business structure changes or if we are perceived as being an athletic full contact sport, we could become subject to such regulation. In the event that we fail to comply with the regulations of a particular jurisdiction, we may be prohibited from promoting and conducting our live events in that jurisdiction. The inability to present our live events over an extended period of time or in a number of jurisdictions could lead to a decline in the various revenue streams generated from our live events, which could adversely affect our operating results.

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Television Programming. The production of television programming by independent producers is not directly regulated by the federal or state governments, but the marketplace for television programming in the United States and internationally is substantially affected by government regulations applicable to, as well as social and political influences on, television stations, television networks and cable and satellite television systems and channels. We voluntarily designate the suitability of each of whom dressesour television shows using standard industry ratings. Changes in governmental policy and private- sector perceptions could further restrict our program content and adversely affect our levels of viewership and operating results.

Online Programming. The Company intends to conduct business on the internet and will be subject to a number of foreign and domestic laws and regulations relating to consumer protection, information security, data protection and privacy, among other things. Many of these laws and regulations are still evolving and could be interpreted in ways that could harm our business. In the area of information security and data protection, the laws in several states require companies to implement specific information security controls to protect certain types of information. Likewise, all but a few states have laws in place requiring companies to notify users if there is a security breach that compromises certain categories of their information. Any failure on our part to comply with these laws may subject us to significant liabilities.

Intellectual Property

Trademarks and Copyrights. We believe that intellectual property and merchandising will be material to our business and we will expend cost and effort in an attempt to develop and protect our intellectual property and to maintain compliance vis-à-vis other parties' intellectual property. A principal focus of our efforts is to protect the intellectual property relating to our originally created characters portrayed by our performers, which encompasses images, likenesses, names and other identifying indicia of these characters. We have registered the domain name www.lingeriefc.com as our website. We currently do not have any registered trademarks. We may, however, seek to register or assert common law rights with respect to the names, terms, slogans, titles and event names we have been using to date.

We anticipate some revenues from branding merchandise, apparel, and particularly lingerie and swimwear using both our and other licensed brands. To accomplish this, we will have to rely on a specific character.  Priorcombination of intellectual property rights, including trade secrets, copyrights, trademarks, contractual restrictions, technological measures and other methods. Further, we seek to forming LFC,enforce our chairmanintellectual property rights by, among other things, searching the internet to ascertain unauthorized use of our intellectual property, seizing goods that feature unauthorized use of our intellectual property and chief executive officer,seeking restraining orders and/or damages in court against individuals or entities infringing our intellectual property rights. Our failure to curtail piracy, infringement or other unauthorized use of our intellectual property rights effectively, or our infringement of others' intellectual property rights, could adversely affect our operating results. We may be the subject of trademark and copyright infringements suits from other companies that seek to protect their names or marks on the basis of similarity or dilution, and no assurance can be made that we will be able to defend such actions.

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Employees

The Company has one employee, Shaun Donnelly, produced similar events which are available throughour Chief Executive Officer and Chief Financial Officer.

Available Information

Our website address is www.lingeriefc.com. We do not intend our website address to be an active link or to otherwise incorporate by reference the Internet.  LFC did not generatecontents of the website into this Report. The public may read and copy any revenue duringmaterials the quarter ended March 31, 2015Company files with the U.S. Securities and generated nominal revenue duringExchange Commission (the “SEC”) at the period from inception (July21, 2014) through December 31, 2014.  LFC did not produce any events since its organization, although Shaun Donnelly produced events prior to forming LFC.  We can give no assuranceSEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0030. The SEC maintains an Internet website (http://www.sec.gov) that this business can or will be successful.

contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC.

ITEM 1A. RISK FACTORS.


You should carefully consider the risks described below as well as other information provided to you in this annual report, including information in the section of this document entitled "Information Regarding Forward Looking Statements" and in the Super 8-K and the March 2015 10-Q, particularly, but without limitation, the information contained under "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Super 8-K and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the March 2015 10-Q.  The risks and uncertainties described below and in the Super 8-K and the March 2015 10-Q

We are not the only ones facing us. Additional risks and uncertainties not presently known to us or that we currently believes are immaterial may also impair our business operations. If any of the following risks actually occur, our businesses, financial condition or results of operations could be materially adversely affected, the value of the common stock could decline, and you may lose all or part of your investment.  Since we are no longer a shell company, we are not including risk factors that relate to our status as a shell company.


We do not have adequate internal controls

Since we only have two executive employees and since our chief financial officer does not work for us on a full-time basis, we do not have adequate internal controls over financial reporting.  We do not anticipate that we will be able to implement internal controls over financial reporting until and unless we can significantly expand our operations, which is dependent upon our ability to generate revenue from our business, and have sufficient available cash to enable us to engage the necessary personnel and implement the necessary accounting systems.  Even if we have sufficient cash, it is unlikely that we can implement internal controls over financial reporting in the near future, and we cannot assure you that we will ever have adequate financial controls.  Our failure to have adequate internal controls over financial reporting could materially impact both our business and the market for and market price of our common stock.

Because our common stock is not registered pursuant to the Securities Exchange Act of 1934, you will not have the benefit of protections provided by that Act.

The Securities Exchange Act requires companies whose securities are registered under the Securities Exchange Actrequired to provide shareholders with a proxy statement orthis information statement in connection with actions taken by shareholders, requires officers, directors and 10% shareholders to pay to the issuer short-term profits and requires 5% stockholders to report their holding in a filing with the SEC.  Further, any investors who hold restricted shares will not be able to sell shares under Rule 144.

There is a limited market for our common stock, which may make it difficult for you to sell your stock.
Our common stock trades on the OTCQB under the symbol "BOTY." There is a limited trading market for our common stock and there is frequently no trading in our common stock.  Our public float consists of less than 2,000 shares.  There are many days on which there is no trading in our stock, and, the OTC Markets website reported no sales during the period from March 25, 2015 through June 2, 2015.  Accordingly, there can be no assurance as to the liquidity of any markets that may develop for our common stock, the ability of holders of our common stock to sell our common stock, or the prices at which holders may be able to sell our common stock.  Further, because of the thin float, the reported bid and asked prices may have little relationship to the price you would pay if you wanted to buy shares or the price you would receive if you wanted to sell shares.
Because our chief executive officer owns approximately 47.5% of our common stock and our two directors and officers own 57.3% of our common stock, they can take actions requiring stockholder consent without prior notice to or the approval of other stockholders.
Our chief executive officer, who is our largest stockholder, owns approximately 47.5% of our common stock and our two directors and officers own approximately 57.3% of our common stock.  Accordingly, they have the ability to elect all of our directors and to take any other action that requires stockholder approval without consulting other stockholders and without the participation of other stockholders.  As long as our common stock is not registered pursuant to the Securities Exchange Act, our officers and directors can take action without notice to the other stockholders other than a report on a Form 8-K which describes the action taken.

Because our common stock may be a penny stock, you may have difficulty selling them in the secondary trading market.

Federal regulations under the Securities Exchange Act of 1934 regulate the trading of "penny stock," which are generally defined as any security not listed on a national securities exchange or Nasdaq, priced at less than $5.00 per share and offered by an issuer with limited net tangible assets and revenues. Prior to the 800-for-one reverse split, our stock was quoted at prices which were less than $0.01 per share.  Although our common stock has been quoted at prices in excess of $5.00 per share following the reverse stock split, we cannot assure you that our stock price will not fall below $5.00, which would subject it to the penny stock rules.  If our common stock is a penny stock, it may not be traded unless a disclosure schedule explaining the penny stock market and the risks associated therewith is delivered to a potential purchaser prior to any trade.

In addition, to the extent that our stock is a penny stock, broker-dealers may not process trades in our stock and brokers that do permit trades in our stock must take certain steps prior to selling a penny stock, which steps include:
Obtaining financial and investment information from the investor;

Obtaining a written suitability questionnaire and purchase agreement signed by the investor; and

Providing the investor a written identification of the shares being offered and the quantity of the shares.

If these penny stock rules are not followed by the broker-dealer, the investor has no obligation to purchase the shares. The application of these comprehensive rules will make it more difficult for broker-dealers to sell our common stock and our shareholders, therefore, may have difficulty in selling their shares in the secondary trading market, and some broker-dealers will not process purchases or sales of penny stocks.

Because we were a penny stock prior to the reverse acquisition and we have a very small public float, brokers may treat our stock in the same manner as a penny stock regardless of our stock price.

Because we are a former shell, we may not be able to continue to maintain our DTC eligibility, which could impair the market and market price for our common stock.

As a result of our recent reverse merger and reverse stock split and because we are a former shell, the Depository Trust Company is reviewing our eligibility for electronic delivery, which effects the ability of brokers to hold shares in street name.  We cannot assure you that our stock will continue to be DTC eligible.  In the event that we cease to be DTC eligible, it may be more difficult for you to sell any shares you own and brokers may be reluctant to handle purchases and sales of our stock, which could affect both the market price of and the market for our common stock.

Brokers may be reluctant to effect transactions in our stock.

Brokerage firms have internal policies which limit the ability of a customer to purchase certain stocks.  Because of the low public float and trading volume as well as our historical stock price, your broker may refuse to process a purchase or sale of our common stock.  In addition, brokers that will process a purchase or sale of our common stock may require a commission that is higher than they would charge for trades in other securities.
Our stock price may be volatile and your investment in our common stock could suffer a decline in value.
There is currently no active market for our common stock, and a market for our common stock may never develop.  Our common stock is quoted on the OTCQB market, which is not a national securities exchange and does not provide the benefits which a national exchange provides.  Our stock has recently been quoted on the OTC Pink, which, according to the OTC Markets website, "is for all types of companies that are there by reasons of default, distress or design, which is why they are further segmented based on the level of information that they provide." If a market does not develop then investors would be unable to sell any of our common stock likely resulting in a complete loss of any funds therein invested.  Should a market develop, the price may fluctuate significantly in response to a number of factors, many of which are beyond our control and may be in addition to the factors disclosed in this annual report.

Because we do not have any significant public float, any purchase or sales of our common stock could have a significant effect on the price of our stock.

The public float for our common stock is less than 2,000 shares, and we believe that a significant number of the public stockholders own less than a round lot.  As a result, any sales of even a modest number of shares could have a significant effect upon the market price of our common stock.  Because of the low public float and the absence of trading volume, the prices shown at OTC Markets may not reflect the price at which you would be able to sell shares if you want to sell any shares you own.  Further, stocks with a low public float may be more subject to manipulation than a stock that has a significant public float.
We do not anticipate that any brokerage firms will provide coverage of us.

Brokerage firms are generally selective in determining which companies they will provide coverage.  We do not anticipate that any brokerage firms will provide coverage of our stock because of such factors as:

·The absence of any significant public float;
·The fact that we were a shell company prior to the completion of the reverse acquisition;
·The fact that we acquired LFC through a reverse acquisition;
·The absence of any significant operating history;
·Uncertainty as to whether our common stock will be DTC eligible.
We do not intend to pay any cash dividends in the foreseeable future.
We have not paid any cash dividends on our common stock and do not intend to pay cash dividends on our common stock in the foreseeable future.

smaller reporting company.

ITEM 1B. UNRESOLVED STAFF COMMENTS.


Not Applicable.


applicable.

ITEM 2. PROPERTIES.


We do not own or lease any property.

Our mailing address is 6955 North Durango, Suite 1115-129, Las Vegas, NV, 89149, telephone (702) 527-2942. Our website is www.lingeriefc.com.

ITEM 3. LEGAL PROCEEDINGS.

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

However, from time to time, we may become involved in various lawsuits and legal proceedings pending against us.

which arise in the ordinary course of business. Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.

ITEM 4. MINE SAFETY DISCLOSURES


Not Applicable.

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

(a)  Market Information.

Our common stock trades on the OTCQBOTC Pink under the symbol BOTY. The former symbol for our common stock was OILL and, after the reverse stock split, OILLD. The symbol was changed to BOTY on April 29, 2015.  The stock has been quoted since April 2009. However, there were no reported trades until September 2009.  

The following table sets forth the range of quarterly high and low closing pricessales price of our common stock as reported duringon the years ending February 28, 2015 and 2014,OTCQB for the most recent fiscal quarter. These prices are based on information on the OTC Markets website. Theseinter-dealer bid and asked prices, reflect inter-dealer quotations, dowithout markup, markdown, commissions, or adjustments and may not include retail markups, markdowns or commissions and do not necessarily reflectrepresent actual transactions, and have been adjusted to reflect the 800-for-one reverse split.

Fiscal quarter
 2015  2014 
  High  Low  High  Low 
First quarter
 
$
48.00
  
$
20.00
  
$
28.00
  
$
10.40
 
Second quarter
  
47.04
   
24.08
   
24.00
   
4.00
 
Third Quarter
  
40.00
   
24.32
   
6.40
   
4.00
 
Fourth Quarter
  
40.00
   
8.80
   
8.00
   
0.80
 

transactions. 

Fiscal quarter

 

2017

 

 

2016

 

 

 

High

 

 

Low 

 

 

High

 

 

Low

 

First quarter (March 31)

 

$0.003

 

 

$0.0003

 

 

$1.29

 

 

$0.22

 

Second quarter (June 30)

 

 

0.0011

 

 

 

0.0004

 

 

 

0.25

 

 

 

0.10

 

Third Quarter (September 30)

 

 

0.0008

 

 

 

0.0003

 

 

 

0.17

 

 

 

0.09

 

Fourth Quarter (December 31)

 

 

0.0005

 

 

 

0.0002

 

 

 

0.10

 

 

 

0.0003

 

(b) Holders

As of June 2, 2015, the reported sales price for our common stock was $12.00 per share, which was a sale on March 24, 2015.  Based on information on the OTC Markets website, there were no reported sales during the period March 25, 2015 through June 2, 2015.  On March 24, 2015, the reported closing price was $12.00 and the trading volume was 111 shares.


Shareholders

As of May 15, 2015,July 19, 2018, we had approximately 302248 shareholders of our common stock.

Transfer Agent

The Such number of record holders was derived from the records maintained by our transfer agent, for the common stock is Island Stock Transfer Inc., 100 Second Avenue South, Suite 705S, St. Petersburg, Florida 33701, telephone (727) 289-0010.      

Dividend Policy
Transfer. This figure does not include those shareholders whose certificates are held in the name of broker-dealers or other nominees.

(c) Dividends

We have notnever paid any cash dividends on our common shares, and we do not anticipate payingthat we will pay any dividends with respect to those securities in the nearforeseeable future.


Our current business plan is to retain any future earnings to finance the expansion development of our business. The payment of future cash dividends is subject to the discretion of the Board of Directors and will depend upon the Company's earnings (if any), general financial condition, cash flows, capital requirements and other considerations deemed relevant by the Board of Directors.

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(d) Securities Authorized for Issuance under Equity Compensation Plans


Plan

The following table summarizes the equity compensation plans under which our securities have been or may be issued as of February 28, 2015. 

Plan Category
 
Number of securities to
be issued upon exercise
of outstanding options
and warrants
  
Weighted-average
exercise price of
outstanding options and
warrants
  
Number of securities
remaining available for future issuance under equity compensation
plans
 
Equity compensation plans approved by security holders
  
0
  
$
0
   
2,125
 
Equity compensation plan not approved by security holders
  
0
  
$
0
   
0
 


December 31, 2017. 

Plan Category

 

Number of securities to

be issued

upon exercise

of outstanding options

and

warrants

 

 

Weighted-

average

exercise

price of

outstanding

options and

warrants

 

 

Number of securities remaining

available for

future issuance under equity compensation

plans

 

Equity compensation plans approved by security holders

 

 

0

 

 

$0

 

 

 

0

 

Equity compensation plan not approved by security holders

 

 

0

 

 

$0

 

 

 

0

 

The 2010 long-term incentive plan is the equity compensation plan that was approved by stockholders.

At February 28, 2015,December 31, 2017, we did not have any equity compensation plans that were not approved by stockholders.


Transfer Agent

Our transfer agent is Island Stock Transfer Inc., 100 Second Avenue South, Suite 705S, St. Petersburg, Florida 33701. Their telephone number is (727) 289-0010.

Recent Sales of Unregistered Securities


None

During the year ended December 31, 2016, the Company issued 23,743,209 common shares for conversion of debt in the amount of $40,545.

During the year ended December 31, 2017, the Company issued 488,517,204 common shares for conversion of debt in the amount of $111,542.

Rule 10B-18 Transactions

During the year ended December 31, 2017, there were no repurchases of the Company’s common stock by the Company.

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ITEM 6. SELECTED FINANCIAL DATA.

Not

Smaller reporting companies are not required for smaller reporting companies.


to provide the information required by this item.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following discussion of the results of our operations and financial condition should be read in conjunction with our financial statements and the related notes, which appear elsewhere in this report. The following discussion includes forward-looking statements. For a discussion of important factors that could cause actual results to differ from results discussed in the forward-looking statements, see "Forward Looking Statements."

Overview

Prior

LFC is a media company focused on the development, production, promotion and distribution of original entertainment which we plan to July 13, 2012,make commercially available predominantly through our subsidiaries we were engaged in design, marketinglive entertainment events, as well as through digital home video, broadcast television networks, video-on-demand and selling of advanced lighting solutions which are designed to use less energy and have a longer life than traditional incandescent, halogen, fluorescent light sources.   We were not able to generate profits from this business and during for several years prior to the discontinuation of that business, we financed our operations primarily through funds provided by our officers and directors.

On July 13, 2012, pursuant to agreements with one of our former directors, we transferred the stock in our subsidiaries and our 35% ownership in an inactive company to a former director in exchange for cancellation of debt totaling $100,000.digital media channels. As a result, we have ceased to be a shell company. Effective as of April 1, 2015, we changed our name to "Lingerie Fighting Championships, Inc.," (by virtue of the transfer ofshort form merger with our new LFC subsidiary) to reflect our new business focus.

RESULTS OF OPERATIONS

Year ended December 31, 2017 as compared to the subsidiaries, we were no longer engaged inYear ended December 31, 2016

Our operating results for the lighting solutions business.  We transferred the stock of the subsidiaries because we felt that, as a result of our continuing lossesyear ended December 31, 2017 and our inability to develop the business as we had planned, it was not in our best interest to continue in this business.

On July 14, 2012, the Butler Roth IRA acquired, for nominal consideration, 31,236 shares of common stock from the director who acquired the subsidiaries and 24,252 shares of common stock from our then chief executive officer, who was also a director.  On July 18, 2012, the Butler Roth IRA2016, and the Company entered into a loan agreement pursuant to whichchanges between those periods for the Butler Roth IRA agreed to lend us up to $150,000,respective items are summarized as follows:

 

 

Year Ended

 

 

 

 

 

December 31,

 

 

 

Statement of Operations Data:

 

2017

 

 

2016

 

 

Changes

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$15,503

 

 

$72,722

 

 

$(57,219)

Cost of Services

 

 

(53,781)

 

 

(107,156)

 

 

53,375

 

Total operating expenses

 

 

(284,724)

 

 

(433,120)

 

 

148,396

 

Other income (expenses)

 

 

(1,234,636)

 

 

(1,333,343)

 

 

98,707

 

Net loss

 

$(1,557,638)

 

$(1,800,897)

 

$243,259

 

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Revenues

We generated revenues of $15,503 and $72,722 for which we issued our 6% demand promissory notethe year ended December 31, 2017 and 2016, respectively. The decrease in the principal amount of $150,000.  The securities were issued in Mr. Butler's name.

On September 14, 2012, we entered into agreement pursuant to which we issued to Terry Butler, our sole director and chief executive officer, 131,037 shares of common stock and 5,000,000 shares of a newly-created series of preferred stock, whichrevenue was designated as the series A convertible preferred stock, in consideration of the cancellation of debtprimarily due to Mr. Butler in the amount of $819,319.  
On May 23, 2013, Mr. Butler sold to Jia Hang 182,832 shares of common stock and 5,000,000 shares of series A convertible preferred stock for a total consideration of $300.  The preferred stock became convertible into 125,000 shares of common stock on May 30, 2013, upon the filing of an amendment to our articles of incorporation increasing our authorized common stock to 400,000,000 shares.  Upon such conversion Mr. Hang owned 307,832 shares of common stock, representing 72.5% of the then outstanding common stock.

We initially planned to focus on providing an internet based security system to companies that would like to replace security guards with video cameras that are monitored 24/7.  Through February 28, 2013, we did not generate any revenue from this new proposed business.  In 2013, we considered providing enhanced oil recovery services and supplying materials to existing operators of oil fields in Indonesia.  We were unable to develop that business, and,less LFC events being hosted during the year ended February 28, 2015,December 31, 2017 as compared to the year ended 2016.

Cost of Services

We incurred total cost of services of $53,781 and $107,156 for the year ended December 31, 2017 and 2016, respectively. The decrease was primarily due to less LFC events being hosted during the year ended December 31, 2017, resulting in less additional labor, material, and subcontractor expenses as compared to the year ended 2016.

Operating Expenses

We incurred total operating expenses of $284,724 and $433,120 for the year ended December 31, 2017 and 2016, respectively. The decrease in operating expenses was primarily due to the decrease in payroll expenses, professional fees and travel expenses.

Other Expenses

We incurred total other expenses of $1,234,636 and $1,333,343 for the year ended December 31, 2017 and 2016, respectively. The decrease in other expenses was due to $200,000 commitment fee incurred form the commitment notes issued during the year ended December 31, 2016.

Net Loss

We incurred a net loss of $1,557,638 and $1,800,897 during the year ended December 31, 2017 and 2016, respectively. The decrease in our net loss was due to decrease in operating expenses and other expenses during the year ended December 31, 2017 as compared to the year ended 2016.

Liquidity and Capital Resources

 

 

December 31,

 

 

December 31,

 

Balance Sheet Data:

 

2017

 

 

2016

 

 

 

 

 

 

 

 

Cash (Bank Indebtedness)

 

$28,438

 

 

$60,085

 

Working capital (deficiency)

 

$(2,455,224)

 

$(1,229,602)

Total assets

 

$28,438

 

 

$60,085

 

Total liabilities

 

$2,483,662

 

 

$1,289,687

 

Total stockholders' deficit

 

$(2,455,224)

 

$(1,229,602)

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At December 31, 2017, we investigatedhad a working capital deficiency of $2,455,224 and an accumulated deficit of $3,556,784. The Company intends to fund future operations through equity financing arrangements, which may be insufficient to fund its capital expenditures, working capital and other potential acquisition candidates, and, on Marchcash requirements for the year ending December 31, 2015, we acquired LFC in a reverse acquisition transaction.

Because2017.

The ability of the changeCompany to realize its business plan is dependent upon, among other things, obtaining additional financing to continue operations, and development of control in May 2013 andits business plan. In response to these problems, management intends to raise additional funds through public or private placement offerings.

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

The following table sets forth certain information about our cash flow during the year ended December 31, 2017 and December 31, 2016:

 

 

Year Ended

 

 

 

 

 

December 31,

 

 

 

Cash Flow Data:

 

2017

 

 

2016

 

 

Changes

 

 

 

 

 

 

 

 

 

 

 

Cash Flows used in Operating Activities

 

$(184,477)

 

$(245,273)

 

$60,796

 

Cash Flows provided by Financing Activities

 

 

152,830

 

 

 

283,675

 

 

 

(130,845)

Net Increase (decrease) in Cash During Period

 

$(31,647)

 

$38,402

 

 

$(70,049)

Cash Flows from Operating Activities

We have not generated positive cash flows from operating activities. For the year ended December 31, 2017, net cash flows used in March 2015, ifoperating activities was $184,477, consisting of a net loss of $1,557,638 and was reduced by amortization of debt discount of $283,503, loss on derivative liability of $896,825, stock based compensation of $30,000, an increase in accounts payable to related party of $95,400 and an increase in accounts payable and accrued liabilities of $67,433. For the year ended December 31, 2016, net cash flows used in operating activities was $245,273, consisting of net loss of $1,800,897 and was reduced by loss on derivative liabilities of $845,571, amortization of debt discount of $266,517, stock based compensation of $174,000, issuance of preferred shares for voting control of $42,669, and increase in accounts payable to related party of $23,500 and an increase in accounts payable and accrued liabilities of $3,367.

Cash Flows from Investing Activities

There was no investing activities during years ended December 31, 2017 and 2016.

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Table of Contents

Cash Flows from Financing Activities

For the year ended December 31, 2017, net cash flows provided by financing activities was $152,830 for proceeds from the convertible notes of $152,050 and advancement from related party of $780. For the year ended December 31, 2016, net cash provided by financing activities was $283,675, consisting of proceeds from convertible notes of $283,750, offset by payment for cancellation of common shares of $75.

Supplementary Cash Flow Disclosures

During fiscal 2017, we ever become profitable,reported supplemental disclosure of cash flow for non-cash transactions of $212,624 for a derivative reclass to APIC due to conversion, $142,050 debt discount from derivative liability, and $119,392 common shares issued for conversion of debt and accrued interest.

During fiscal 2016, we will be very limited in our abilityreported supplemental disclosure of cash flow for non-cash transactions of $289,181 for a derivative reclass to use the net operating loss carryforward resultingAPIC due to conversion, $448,988 debt discount from losses from our prior operationsderivative liability, and our operations as a shell.


$81,463 common shares issued for conversion of debt and accrued interest.

Off-Balance Sheet Arrangements

As of December 31, 2017, we had no off-balance sheet arrangements.

Significant Accounting Estimates and Policies

The discussion and analysis of our financial condition and results of operations is based upon our financial statements that have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities. On an on-going basis, we evaluate our estimates including the allowance for doubtful accounts, the salability and recoverability of our products, income taxes and contingencies. We base our estimates on historical experience and on other assumptions that we believe to be reasonable under the circumstances, the results of which form our basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Going Concern Qualification
The consolidated financial statements included in this Form 10-K have been prepared on a going concern basis which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.   At February 28, 2015, we were not engaged in any business activities, and had nominal cash and no other assets.  During the years ended February 28, 2015 and 2014, we did not generate any revenue, and we incurred a loss from operations of $136,756 and a net loss of $128,756 for the year ended February 28, 2015, and loss from operations and a net loss of $260,154 for the year ended February 28, 2014.  We had a stockholders' deficit of approximately $39,000 at February 28, 2015.  In addition, we had a negative cash flow in operating activities of approximately $68,000 and $145,000 for the years ended February 28, 2015 and 2014, respectively. Our auditor's report states that these matters raise substantial doubt about our ability to continue as a going concern. We cannot assure you that we will be able to continue as a going concern.

Income Taxes

We account for income taxes in accordance with ASC 740, Income Taxes, which requires that we recognize deferred tax liabilities and assets based on the differences between the financial statement carrying amounts and the tax basis of assets and liabilities, using enacted tax rates in effect in the years the differences are expected to reverse. Deferred income tax benefit (expense) results from the change in net deferred tax assets or deferred tax liabilities. A valuation allowance is recorded when, in the opinion of management, it is more likely than not that some or all of any deferred tax assets will not be realized.

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We adopted ASC 740-10-25, Income Taxes- Overall-Recognition, on January 1, 2007, which provides criteria for the recognition, measurement, presentation and disclosure of uncertain tax position. We must recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution. We did not recognize any additional liabilities for uncertain tax positions as a result of the implementation of ASC 740-10-25.

Recent accounting pronouncements


We considered all new accounting pronouncements

In 2014, the FASB issued ASU 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements. ASU 2014-10 eliminates the distinction of a development stage entity and has concluded that there are no new pronouncements that may have a material impactcertain related disclosure requirements, including the elimination of inception-to-date information on resultsthe statements of operations, financial condition, or cash flows based on current information.

RESULTS OF OPERATIONS

Years Ended February 28, 2015 and 2014
We had no revenuestockholders’ equity. The amendments in ASU 2014-10 will be effective prospectively for the years ended February 28, 2015 ("fiscal 2015") or 2014 ("fiscal 2014").  General and administrative expenses, which consisted primarily of professional fees and payroll, were $136,756 for fiscal 2015 and $260,154 for fiscal 2014, a decrease of $123,398, or 47%.  Executive compensation was $60,000 for fiscal 2015 and $120,000 for fiscal 2014, representing compensation to Terry Butler, our chief executive and financial officer during both years.  Mr. Butler ceased accruing compensation in September 2014.  As of February 28, 2015, Mr. Butler forgave his accrued compensation of $270,000, which is treated as a contribution to capital.   Other income in fiscal 2015 represented payments made on behalf of a potential reverse acquisition candidate to cover our professional and other expenses.  We had no other income in fiscal 2014.  As a result, we incurred a loss of $128,756 for fiscal 2015 as compared with a loss of $260,154 for fiscal 2014.
As a result of the foregoing, our net loss for fiscal 2015 was $128,756, or $0.30 per share (basic and diluted), and our net loss fiscal 2014 was $260,154, or $0.70 per share (basic and diluted).  Basic and diluted loss per share is the same since convertible securities are anti-dilutive.
Liquidity and Capital Resources
Liquidity is the ability of a company to generate funds to support its current and future operations, satisfy its obligations and otherwise operate on an ongoing basis.  At February 28, 2014, we had a cash balance of $3,551, representing the balance of cash received from the private placement of securities in fiscalannual reporting periods beginning after December 15, 2014, and a working capital deficiency of $38,549 at February 28, 2015.interim periods within those annual periods, however early adoption is permitted. The decrease in our working capital deficit from approximately $180,000 at February 28, 2014 results from the forgiveness of accrued compensation in the amount of $270,000 by our chief executiveCompany evaluated and financial officer was treated as a contribution to capital.  The amount of the forgiveness is reflected as a transfer of the amount from liabilities to additional paid-in capital.
During fiscal 2015, we used $68,156 in operations, reflecting our net loss of $128,756, plus a decrease in current liabilities of $60,600.  During fiscal 2014, we used $145,253 in our operations, reflecting or net loss of $260,154, offset by a decrease in current liabilities of $114,901.

During fiscal 2015, we financed our operations with loans in the amount of $36,100, of which $12,100 was from our chief executive officer.  During fiscal 2014, we financed our operations principally through the sale of common stock, from which we received $300,000, of which $125,100 was used to pay loans to our chief executive officer.

During fiscal 2015, we reported supplemental disclosure of cash flow for non-cash transactions of a $270,000 forgiveness of compensation by our chief executive officer, which is treated as a contribution.  We had no comparable transaction in fiscaladopted ASU 2014-10 during 2014.

We believe that we require significant financing for our operations.  Because of the absence of both operating activities, we may difficulty raising additional funds through the sale of our equity or debt securities without a plan to engage in or acquire a specific business.  The accompanying consolidated financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.  As disclosed in the Super 8-K and the March 2015 10-Q, our operations subsequent to the reverse acquisition of LFC have significant cash requirements.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS.

Not applicable for smaller reporting companies.

We do not hold any derivative instruments and do not engage in any hedging activities. 

17

Table of Contents

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Page

Reports of Independent Registered Public Accounting Firm

F-2

Consolidated Balance Sheets at December 31, 2017 and 2016

F-3

Consolidated Statements of Operations for the year ended December 31, 2017 and December 31, 2016

F-4

Consolidated Statements of Changes in Stockholders' Deficit for the year ended December 31, 2017 and December 31, 2016

F-5

Consolidated Statements of Cash Flows for the year ended December 31, 2017 and December 31, 2016

F-6

Notes to Consolidated Financial Statements

F-7

F-1
Table of Contents

Report of Independent Registered Public Accounting Firm

To the shareholders and the board of directors of Lingerie Fighting Championships, Inc.

Opinion on the Financial Statements

We have audited the accompanying balance sheets of Lingerie Fighting Championships, Inc. (the "Company") as of December 31, 2017 and 2016, the related statements of operations, stockholders' equity (deficit), and cash flows for the years then ended, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2017 and 2016, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

Substantial Doubt about the Company’s Ability to Continue as a Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company’s significant operating losses raise substantial doubt about its ability to continue as a going concern. The financial statements startdo not include any adjustments that might result from the outcome of this uncertainty.

/s/ BF Borgers CPA PC

BF Borgers CPA PC

We have served as the Company's auditor since 2018.

Lakewood, CO

July 19, 2018

F-2
Table of Contents

LINGERIE FIGHTING CHAMPIONSHIPS, INC.

BALANCE SHEETS 

 

 

 

December 31,

 

 

December 31,

 

 

 

2017

 

 

2016

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

Cash and cash equivalents

 

$28,438

 

 

$60,085

 

Total Current Assets

 

 

28,438

 

 

 

60,085

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' DEFICIT

 

 

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

 

 

Accounts payable and accrued liabilities

 

$75,674

 

 

$35,214

 

Accounts payable - related party

 

 

119,680

 

 

 

23,500

 

Stock payable

 

 

30,000

 

 

 

-

 

Convertible notes, net of $90,718 and $215,721 debt discount as of December 31, 2017 and 2016, respectively

 

 

426,678

 

 

 

225,595

 

Derivative liability

 

 

1,831,630

 

 

 

1,005,378

 

Total Current Liabilities

 

 

2,483,662

 

 

 

1,289,687

 

 

 

 

 

 

 

 

 

 

STOCKHOLDERS' DEFICIT

 

 

 

 

 

 

 

 

Preferred stock, par value $0.001 per share, 10,000,000 shares authorized, 51 and 51 shares issued and outstanding, respectively

 

 

-

 

 

 

-

 

Common stock, par value $0.001 per share, 5,000,000,000 shares authorized, 576,193,639 and 87,676,435 shares issued and outstanding at December 31, 2017 and 2016, respectively

 

 

576,194

 

 

 

87,677

 

Additional paid-in capital

 

 

525,366

 

 

 

681,867

 

Accumulated deficit

 

 

(3,556,784)

 

 

(1,999,146)

Total stockholders' deficit

 

 

(2,455,224)

 

 

(1,229,602)

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT

 

$28,438

 

 

$60,085

 

 See notes to audited financial statements

F-3
Table of Contents

LINGERIE FIGHTING CHAMPIONSHIPS, INC.

STATEMENTS OF OPERATIONS

 

 

Year Ended

 

 

 

December 31,

 

 

 

2017

 

 

2016

 

 

 

 

 

 

 

 

Revenue

 

$15,503

 

 

$72,722

 

Cost of Services

 

 

53,781

 

 

 

107,156

 

GROSS LOSS

 

 

(38,278)

 

 

(34,434)

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

 

254,724

 

 

 

216,451

 

Stock based compensation

 

��

30,000

 

 

 

216,669

 

Total Operating Expenses

 

 

284,724

 

 

 

433,120

 

 

 

 

 

 

 

 

 

 

OTHER EXPENSES

 

 

 

 

 

 

 

 

Interest expense

 

 

(352,811)

 

 

(287,772)

Loss on derivative liabilities

 

 

(896,825)

 

 

(845,571)

Accounts payable written off

 

 

15,000

 

 

 

-

 

Commitment fee

 

 

-

 

 

 

(200,000)

Total other expenses

 

$(1,234,636)

 

$(1,333,343)

 

 

 

 

 

 

 

 

 

OPERATING LOSS

 

 

(1,557,638)

 

 

(1,800,897)

 

 

 

 

 

 

 

 

 

NET LOSS

 

$(1,557,638)

 

$(1,800,897)

 

 

 

 

 

 

 

 

 

Basic and Diluted Loss per Common Share

 

$(0.00)

 

$(0.08)

Basic and Diluted Weighted Average Common Shares Outstanding

 

 

391,580,652

 

 

 

23,297,454

 

See notes to unaudited financial statements

F-4
Table of Contents

LINGERIE FIGHTING CHAMPIONSHIPS, INC.

STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

 

Preferred Shares

 

 

Additional

 

 

 

 

 

Total

 

 

 

Number of Shares

 

 

Amount

 

 

Number of Shares

 

 

Amount

 

 

Paid-in

Capital

 

 

Accumulated

Deficit

 

 

Stockholders'

Deficit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance - December 31, 2015

 

 

19,769,977

 

 

$19,770

 

 

 

-

 

 

$-

 

 

$162,536

 

 

$(198,249)

 

$(15,943)

Purchase and cancellation of shares

 

 

(750,000)

 

 

(750)

 

 

-

 

 

 

-

 

 

 

675

 

 

 

-

 

 

 

(75)

Common shares issued for conversion of debt

 

 

66,406,458

 

 

 

66,407

 

 

 

-

 

 

 

-

 

 

 

15,056

 

 

 

-

 

 

 

81,463

 

Common shares issued for compensation

 

 

2,250,000

 

 

 

2,250

 

 

 

-

 

 

 

-

 

 

 

171,750

 

 

 

-

 

 

 

174,000

 

Derivative reclass to APIC due to conversion

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

289,181

 

 

 

-

 

 

 

289,181

 

Issuance of preferred shares for voting control

 

 

-

 

 

 

-

 

 

 

51

 

 

 

-

 

 

 

42,669

 

 

 

 

 

 

 

42,669

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(1,800,897)

 

 

(1,800,897)

Balance - December 31, 2016

 

 

87,676,435

 

 

$87,677

 

 

 

51

 

 

$-

 

 

$681,867

 

 

$(1,999,146)

 

$(1,229,602)

Common shares issued for conversion of debt

 

 

488,517,204

 

 

 

488,517

 

 

 

-

 

 

 

-

 

 

 

(369,125)

 

 

-

 

 

 

119,392

 

Derivative reclass to APIC due to conversion

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

212,624

 

 

 

-

 

 

 

212,624

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(1,557,638)

 

 

(1,557,638)

Balance - December 31, 2017

 

 

576,193,639

 

 

$576,194

 

 

 

51

 

 

$-

 

 

$525,366

 

 

$(3,556,784)

 

$(2,455,224)

See notes to audited financial statements

F-5
Table of Contents

LINGERIE FIGHTING CHAMPIONSHIPS, INC.

STATEMENTS OF CASH FLOWS

 

 

Year Ended

 

 

 

December 31,

 

 

 

2017

 

 

2016

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

 

Net loss

 

$(1,557,638)

 

$(1,800,897)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

 

Note payable issued as equity commitment fee

 

 

-

 

 

 

200,000

 

Stock - based compensation

 

 

30,000

 

 

 

174,000

 

Issuance of preferred shares for voting control

 

 

-

 

 

 

42,669

 

Loss on derivative liability

 

 

896,825

 

 

 

845,571

 

Amortization of debt discount

 

 

283,503

 

 

 

266,517

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts payable - related party

 

 

95,400

 

 

 

23,500

 

Accounts payable and accrued liabilities

 

 

67,433

 

 

 

3,367

 

Net cash used in operating activities

 

 

(184,477)

 

 

(245,273)

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

Advancement from related party

 

 

780

 

 

 

-

 

Proceeds from convertible debt

 

 

152,050

 

 

 

283,750

 

Payment for cancellation of common shares

 

 

-

 

 

 

(75)

Net cash provided by financing activities

 

 

152,830

 

 

 

283,675

 

 

 

 

 

 

 

 

 

 

Net increase (decrease) in cash and cash equivalents

 

 

(31,647)

 

 

38,402

 

Cash and cash equivalents - beginning of period

 

 

60,085

 

 

 

21,683

 

Cash and cash equivalents - end of period

 

$28,438

 

 

$60,085

 

 

 

 

 

 

 

 

 

 

Supplemental Cash Flow Disclosures

 

 

 

 

 

 

 

 

Cash paid for interest

 

$-

 

 

$-

 

Cash paid for income taxes

 

$-

 

 

$-

 

 

 

 

 

 

 

 

 

 

NON CASH INVESTING AND FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

Debt discount from derivative liability

 

$142,050

 

 

$448,988

 

Derivative reclass to APIC due to conversion

 

$212,624

 

 

$289,181

 

Common shares issued for conversion of debt and accrued interest

 

$119,392

 

 

$81,463

 

See notes to audited financial statements

F-6
Table of Contents

LINGERIE FIGHTING CHAMPIONSHIPS, INC.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2017 AND 2016

NOTE 1 – ORGANIZATION AND NATURE OF BUSINESS

(a) Organization

Lingerie Fighting Championships, Inc. (the "Company") is a Nevada corporation incorporated on page F-1.

November 29, 2006 under the name Sparking Events, Inc. The Company's corporate name was changed to Xodtec Group USA, Inc. in June 2009, Xodtec LED, Inc. in May 2010, Cala Energy Corp. in September 2013 and Lingerie Fighting Championships, Inc. on April 1, 2015.

NOTE 2 – BASIS OF PRESENTATION AND ACCOUNTING POLICIES

Basis of Presentation

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America and are presented in US dollars. The Company uses the accrual basis of accounting and has adopted a December 31 fiscal year end. The Company had no subsidiaries at December 31, 2017 and 2016.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company continually evaluates its estimates and judgments. The Company bases its estimates and judgments on historical experience and other factors that it believes to be reasonable under the circumstances. Materially different results can occur as circumstances change and additional information becomes known, even for estimates and judgments that are not deemed critical.

Cash and Cash Equivalents

The Company considers all highly liquid investments with the original maturities of three months or less to be cash equivalents. The Company had $28,438 and $60,085 in cash and cash equivalents as at December 31, 2017 and December 31, 2016, respectively.

Revenue Recognition

The Company recognizes revenue from the sale of services in accordance with ASC 605, "Revenue Recognition." Revenue is recognized only when all of the following criteria have been met: (i) persuasive evidence for an agreement exists; (ii) service has been provided or goods has been delivered; (iii) the payment is fixed or determinable; and (iv) collection is reasonably assured.

F-7
Table of Contents

Income Taxes

Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized.

Earnings (Loss) per Share

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

For the years ended December 31, 2017 and December 31, 2016, convertible notes were dilutive instruments and were not included in the calculation of diluted loss per share as their effect would be antidilutive.

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

 

 

Year Ended

 

 

 

December 31,

 

 

 

2017

 

 

2016

 

NET LOSS

 

$(1,557,638)

 

$(1,800,897)

 

 

 

 

 

 

 

 

 

Basic and Diluted Loss per Common Share

 

$(0.00)

 

$(0.08)

Basic and Diluted Weighted Average Common Shares Outstanding

 

 

391,580,652

 

 

 

23,297,454

 

For the year ended December 31, 2017, 9,318,484,909 common shares from convertible notes were excluded from the computation of diluted net loss per shares as the result of the computation was anti-dilutive.

F-8
Table of Contents

Related Party Balances and Transactions

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

Beneficial Conversion Feature of Convertible Debt

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

Convertible Instruments and Derivatives

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

Share-Based Compensation

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

For the year ended December 31, 2017 and December 31, 2016, the stock based compensation was $30,000 and $216,669, respectively.

Fair Value Measurement

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

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

F-9
Table of Contents

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

Level 1 – 

quoted prices in active markets for identical assets or liabilities

Level 2 – 

quoted prices for similar assets and liabilities in active markets or inputs that are observable

Level 3 – 

inputs that are unobservable (for example cash flow modeling inputs based on assumptions)

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

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

Balance - December 31, 2016

 

$1,005,378

 

Derivative reclassed to APIC due to debt conversion

 

 

(212,624)

Addition of new derivative liabilities upon issuance of convertible notes as debt discount

 

 

134,550

 

Addition of new derivatives liabilities recognized as day one loss

 

 

508,665

 

Loss on change in fair value of the derivative

 

 

395,661

 

Balance - December 31, 2017

 

$1,831,630

 

The following table summarizes fair value measurement by level at December 31, 2017 and December 31, 2016, measured at fair value on a recurring basis:

December 31, 2017

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

None

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative liabilities

 

 

-

 

 

 

-

 

 

 

1,831,630

 

 

 

1,831,630

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2016

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

None

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative liabilities

 

 

-

 

 

 

-

 

 

 

1,005,378

 

 

 

1,005,378

 

F-10
Table of Contents

NOTE 3 – GOING CONCERN

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

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

NOTE 4 – STOCKHOLDERS DEFICIT

Preferred Stock

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

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

There were 51 and 51 preferred shares issued and outstanding as at December 31, 2017 and December 31, 2016.

Common Stock

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

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

As of December 31, 2017 and December 31, 2016, the common shares issued and outstanding was 576,193,639 and 87,676,435, respectively.

F-11
Table of Contents

Common shares issued for compensation

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

As of December 31, 2017, the Company recorded stock payable for 300,000 outstanding common shares of $30,000 not yet issued to the consultant for service performed.

NOTE 5 – NOTES PAYABLE

The Company had the following unsecured notes payable as at December 31, 2017 and December 31, 2016:

 

 

December 31, 2017

 

 

December 31, 2016

 

 

 

 

 

 

 

 

Convertible Promissory Note to Crown Bridge

 

$2,404

 

 

$13,289

 

Convertible Promissory Notes to Auctus Fund

 

 

179,172

 

 

 

68,226

 

Convertible Promissory Notes to EMA Financial

 

 

89,686

 

 

 

11,667

 

Convertible Promissory Notes to Black Bridge Capital

 

 

100,000

 

 

 

26,667

 

Convertible Promissory Notes to Tangiers

 

 

23,801

 

 

 

100,955

 

Convertible Promissory Notes to Denali

 

 

31,615

 

 

 

4,791

 

Total Convertible Debt

 

$426,678

 

 

$225,595

 

Promissory Note Payable to Crown Bridge Partners

On April 1, 2016, the Company entered into an agreement to issue a convertible promissory note to an unrelated party for an amount of $40,000 with a $6,000 original issue discount. The convertible promissory note bears interest at 10% per annum and matures twelve months from issue date. The conversion price is 55% of the lowest trading price 25 days prior to conversion. The note was discounted for a derivative and the discount of $34,000 is being amortized over the life of the note using the effective interest method resulting in $10,000 and $24,000 of interest expense for the year ended December 31, 2017 and December 31, 2016, respectively.

During the year ended December 31, 2016, principals of $16,711 was converted for 15,341,000 common shares.

During the year ended December 31, 2017, principal of $20,885 was converted for 92,296,000 common shares.

As of December 31, 2017, the note is presented net of a debt discount of $0.

The note is currently in default.

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Promissory Notes Payable to Auctus Fund

Auctus #1

On May 20, 2016, the Company entered into an agreement to issue a convertible promissory note to an unrelated party for an amount of $67,750 with a $7,750 original issue discount. The convertible promissory note bears interest at 10% per annum and matures nine months from issue date. The conversion price is 50% of the lowest trading price 25 days prior to conversion. The note was discounted for a derivative and the discount of $60,000 is being amortized over the life of the note using the effective interest method resulting in $14,542 and $45,458 of interest expense for the year ended December 31, 2017 and December 31, 2016, respectively.

During the year ended December 31, 2016, principal of $7,219 and accrued interest of $4,090 were converted for 16,621,000 common shares.

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

As of December 31, 2017, the note is presented net of a debt discount of $0.

The note is currently in default.

Auctus #2

On September 20, 2016, the Company entered into an agreement to issue a convertible promissory note to an unrelated party for an amount of $56,750 with a $6,750 original issue discount. The convertible promissory note bears interest at 10% per annum and matures nine months from issue date. The conversion price is 50% of the lowest trading price 25 days prior to conversion. The note was discounted for a derivative and the discount of $50,000 is being amortized over the life of the note using the effective interest method resulting in $35,607 and $14,393 of interest expense for the year ended December 31, 2017 and December 31, 2016, respectively.

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

As of December 31, 2017, the notes are presented net of a debt discount of $0.

The note is currently in default.

Auctus #3

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

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

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

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

As of December 31 2017, the note is presented net of a debt discount of $5,030.

Auctus #4

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

As of December 31 2017, the note is presented net of a debt discount of $41,546.

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Promissory Note Payable to EMA Financial, LLC

EMA#1

On September 7, 2016, the Company entered into an agreement to issue a convertible promissory note to an unrelated party for an amount of $35,000 with a $5,250 original issue discount. The convertible promissory note bears interest at 10% per annum and matures twelve months from issue date. The conversion price is 50% of the lowest trading price 25 days prior to conversion. The note was discounted for a derivative and the discount of $29,750 is being amortized over the life of the note using the effective interest method resulting in $21,774 and $7,976 of interest expense for the year ended December 31, 2017 and December 31, 2016, respectively.

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

EMA#2

On November 3, 2016, the Company entered into an agreement with Blackbridge Capital Growth Funds, LLC to issue a convertible promissory note to an unrelated party for an amount of $60,000. The convertible promissory note bears interest at 8% per annum and matures on November 3, 2017. The conversion price is 50% of the lowest trading price 20 days prior to conversion. The note was discounted for a derivative and the discount of $60,000 is being amortized over the life of the note using the effective interest method resulting in $50,465 and $9,535 of interest expense for the year ended December 31, 2017 and December 31, 2016, respectively.

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

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

As of December 31, 2017, the notes are presented net of a debt discount of $0.

The note is currently in default.

EMA#3

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

As of December 31 2017, the note is presented net of a debt discount of $44,142.

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Promissory Note Payable to Blackbridge Capital Growth Fund, LLC

Commitment Note

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

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

On November 3, 2016, a derivative debt discount of $100,000 was recorded. For the nine months ended September 30, 2017, an amount of $75,000 was amortized into interest expense in relation to the debt discount.

As of December 31, 2017, the notes are presented net of a debt discount of $0.

The note is currently in default.

Commitment Note Payable to Tangiers

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

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

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

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

The note was discounted for a derivative and the discount of $65,238 is fully amortized into interest expense for the year ended December 31, 2016. As of December 31, 2017, the note is presented net of a debt discount of $0.

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

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

The note is currently in default.

Notes Payable to Denali

Denali #1

On December 5, 2016, the Company entered into an Assignment Agreement that Denali acquired $16,000 of the $57,500 note held by Tangiers.

During the year ended December 31, 2016, principal of $11,209 and accrued interest of $6 was converted for 10,701,249 common shares.

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During the year ended December 31, 2017, principal of $4,791 and accrued interest of $38 was converted for 3,974,519 common shares.

The note has been fully converted and has no remaining balance as of December 31, 2017.

Denali #2

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

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

The note is currently in default.

Note Payable to Tangiers

On April 4, 2016, the Company entered into a separate promissory note of $57,500 with a $7,500 original issue discount to the unrelated party, which bears interest at 10% of the principal amount. The $57,500 promissory note matures six months from the issue date. The note may be prepaid by the company, in whole, or part, as follows: (a) under thirty days, 105% of principal amount, (b) thirty one to sixty days, 110% of principal amount, (c) sixty one to ninety days, 115% of principal amount, (d) ninety one to one hundred and twenty days, 120% of principal amount, (e) one hundred twenty one to one hundred fifty one days, 125% of principal amount, and (f) one hundred and fifty one to one hundred and eighty days, 135% of principal amount. The note payable will be available to be converted upon default. Per the agreement, default could occur based on: failure of payment on any outstanding amounts longer than five days after the due date, failure to issue shares after request, or failure to comply with all of the other material provisions included in the agreement. The conversion price shall be equal to the lower of 50% of the lowest trading price of the Company’s common stock during the 20 consecutive trading days prior to the date on which the unrelated party elects to convert all or part of the note. The note was discounted for a derivative and the discount of $50,000 is being amortized over the life of the note using the effective interest method. Total of $57,500 of the discount was recorded as interest expense for the year ended December 31, 2016.

On December 5, 2016, Tangiers assigned $16,000 of the note payable to Denali.

During the year ended December 31, 2016, $40,545 was converted for 23,743,209 common shares.

During the year ended December 31, 2017, principal of $955 and interest of $1,838 was converted for 2,298,897 common shares.

The note has been fully converted and has no remaining balance as of December 31, 2017.

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Accrued interest on convertible notes

During the year ended December 31, 2017 and December 31, 2016, interest expense of $69,308 and $21,255 was incurred on convertible notes, respectively. As of December 31, 2017 and December 31, 2016, accrued interest payable on convertible notes was $70,049 and $20,214, respectively.

Summary of Conversions

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

During the year ended December 31, 2016, the Company issued 66,406,458 common shares, par value of $66,407, for conversion of debt in the amount of $81,463.

NOTE 6 – DERIVATIVE LIABILITY

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

The following table summarizes the derivative liabilities included in the balance sheet at December 31, 2017:

Balance - December 31, 2016

 

$1,005,378

 

Derivative reclassed to APIC due to debt conversion

 

 

(212,624)

Addition of new derivative liabilities upon issuance of convertible notes as debt discount

 

 

134,550

 

Addition of new derivatives liabilities recognized as day one loss

 

 

508,665

 

Loss (Gain) on change in fair value of the derivative

 

 

395,661

 

Balance - December 31, 2017

 

$1,831,630

 

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

Year Ended

Year Ended

December 31, 2017

December 31, 2016

Expected term

0.04 - 0.83 years

0.14 - 0.84 years

Expected average volatility

207% - 415%

250.58% - 440.58%

Expected dividend yield

-

-

Risk-free interest rate

0.97% - 1.76%

0.48% - 0.74%

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NOTE 7 – RELATED PARTY TRANSACTIONS

During the year ended December 31, 2017, the Company accrued $120,000 of salary payable to one related party, and paid $24,600 owing to two related parties for accrued salaries.

During the year ended December 31, 2017, a related party advanced $780 to the Company. The amount due to the related party is unsecured and non-interest bearing with no set terms of repayment.

As of December 31, 2017 and December 31, 2016, amount due to related parties was $119,680 and $23,500, respectively.

NOTE 8 – INCOME TAXES

The Company did not provide any current or deferred U.S. federal income tax provision or benefit for any of the periods presented because the Company has experienced operating losses for U.S. federal income tax purposes since inception. When it is more likely than not that a tax asset cannot be realized through future income the Company must allow for this future tax benefit

The components of the Company’s deferred tax asset and reconciliation of income taxes computed at the statutory federal income tax rate at 34% recorded for the years ended December 31, 2017 and December 31, 2016 is as follows:

 

December 31, 2017

 

December 31, 2016

 

Net operating loss carryforward

 

$

1,367,856

 

$

737,043

 

Tax Rate

 

34

%

 

34

%

Deferred tax asset

 

465,071

 

250,595

 

Less: Valuation allowance

 

(465,071

)

 

(250,595

)

Deferred tax asset

 

$

-

 

$

-

The Company has approximately $1,367,856 of net operating losses (“NOL”) carried forward to offset taxable income in future years which expire commencing twenty years from when incurred. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based on the assessment, management has established a full valuation allowance against all of the deferred tax assets relating to NOLs for every period because it is more likely than not that all of the deferred tax assets will not be realized.

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The Company is subject to audits by U.S. Internal Revenue Service ("IRS"), state, local and foreign tax authorities. Management believes that adequate provisions have been made for any adjustments that may result from tax examinations. However, the outcome of tax audits cannot be predicted with certainty. If any issues addressed in the Company's tax audits are resolved in a manner not consistent with management's expectations, the Company could be required to adjust its provision for income taxes in the period such resolution occurs.

On December 22, 2017, the United States enacted the Tax Cuts and Jobs Act (the “Act”) resulting in significant modifications to existing law. The Company has considered the accounting impact of the effects of the Act during the year ended December 31, 2017 including a reduction in the corporate tax rate from 34% to 21% among other changes.

NOTE 9 – SUBSEQUENT EVENTS

Subsequent to December 31, 2017 and through the date that these financials were made available, the Company had the following subsequent events:

On February 20, 2018, a note amendment was executed with $5,636.04 increase in the principal amount of the convertible note at principal amount of $53,000 issued to EMA Financials LLC on October 31, 2017 for partial repayment made on behalf of the Company to settle the convertible note originally issued to Crown Bridge Partners, LLC on April 1, 2016 and the note principal subsequently increased to $58,636.04.

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

On February 23, 2018, a note amendment was executed with $5,636.04 increase in the principal amount of the convertible note at principal amount of $53,000 issued to Auctus Fund, LLC on November 2, 2017 for partial repayment made on behalf of the Company to settle the convertible note originally issued to Crown Bridge Partners, LLC on April 1, 2016 and the note principal subsequently increased to $58,636.04.

On March 5, 2018, the Company entered into an agreement with EMA Financial, LLC to issue a convertible promissory note of $30,000 to the unrelated party, which bears interest at 12% of the principal amount. The promissory note matures on March 5, 2019. The conversion price shall be equal to lower of (i) the closing sale price of the Common Stock on the Principal Market on the Trading Day immediately preceding the Closing Date, and (ii) 50% of either the lowest sale price for the Common Stock on the Principal Market during the twenty-five consecutive Trading Days including and immediately preceding the Conversion Date, or the closing bid price, whichever is lower.

On March 7, 2018, the Company entered into an agreement with Auctus Fund, LLC to issue a convertible promissory note of $30,000 to the unrelated party, which bears interest at 12% of the principal amount. The promissory note matures on December 7, 2018. The conversion price shall be equal to the lesser of (i) 50% multiplied by the lowest Trading Price during the previous twenty-five Trading Day period ending on the latest complete Trading Day prior to the date of this Note and (ii) the Variable Conversion Price, that is 50% multiplied by the Market Price, being the lowest Trading Price for the Common Stock during the twenty-five Trading Day period ending on the latest complete Trading Day prior to the Conversion Date.

In March 2018, the Company issued 89,132,000 common shares for conversion of debt in the amount of $1,337.

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

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

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.


On December 23, 2014, our board of directors accepted

As previously disclosed in the resignation of Simon & Edward, LLP ("Simon & Edward") and selected MaloneBailey, LLP ("MaloneBailey") to serve as ourCompany’s Current Report on Form 8-K filed with the Commission on March 30, 2018, on March 28, 2018, the Company dismissed its independent registered public accounting firm, forMalone Bailey LLP. Concurrent with such dismissal, on March 28, 2018, the fiscal year ending February 28, 2015.  During our two most recent fiscal years prior to Simon & Edward's resignation and any subsequent interim period through the date of resignation, there were no disagreements with Simon & Edward on any matter ofCompany engaged BF Borgers CPA, PC as its new independent registered public accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Simon & Edward, would have caused it to make reference to the subject matter of the disagreements in connection with its reports for such years.

firm.  

ITEM 9A. CONTROLS AND PROCEDURES.


a) Evaluation of Disclosure Controls and Procedures


11

Disclosure

 In connection with the preparation and filing of this Annual Report, we completed an evaluation of the effectiveness of our disclosure controls and procedures referunder the supervision and with the participation of our chief executive officer and chief financial officer. This evaluation was conducted pursuant to controls and other procedures designed to ensure that information required to be disclosed in the reports we file or submit under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and that such information is accumulated and communicated to our management, including our chief executive and financial officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating and implementing possible controls and procedures.

Management conducted its evaluation of disclosure controls and procedures under the supervision of our chief executive and financial officer. Based on that evaluation, our chief executive and financial officer concluded that because of the material weaknesses in internal control over financial reporting described below, our disclosure controls and procedures were not effective as of February 28, 2015.
Management's Report of Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act.  Our management is also required to assess and report on the effectiveness of our internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act of 2002 ("Section 404").   amended.

Management assessed the effectiveness of our internal control over financial reporting as of February 28, 2015.December 31, 2017. In making this assessment, wemanagement used the criteriaframework set forth in the report Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)(2013), or COSO (2013).

Based on the evaluation, management concluded that our disclosure controls and procedures were not effective as of December 31, 2017 due to the material weaknesses noted below in “Management’s Report on Internal Control - Integrated Framework.  over Financial Reporting”. A material weakness is a control deficiency, or combination of control deficiencies, that results in more than a remote likelihood that a material misstatement of the financial statements will not be prevented or detected on a timely basis by employees in the normal course of their work.

b) Management's Report of Internal Control over Financial Reporting

As evidenced by the material weaknesses described below, we determined that entity-level controls related to the control environment did not operate effectively resulting in material weaknesses in such COSO (2013) component. The deficiencies in control environment each represent a separate material weakness. These material weaknesses contributed to an environment where there is a more than a remote likelihood that a material misstatement of the interim and annual financial statements could occur and not be prevented or detected. 

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During our assessment of the effectiveness of internal control over financial reporting as of February 28, 2015,December 31, 2017, management identified material weaknesses related to (i) the lack of any accounting personnel other than our chief financial officer, who was not a full-time employee, (ii) the lack of internal audit functions, and (iii) athe lack of segregation of duties, within accounting functions.and (iv) the lack of proper internal control procedures and documentation. As of February 28, 2015,December 31, 2017, we had one executive, our chief executive and financial officer, who was a consultant who provided services on an as-needed basis.officer. As a result there was no segregation of duties.

A material weakness (within the meaning of PCAOB Auditing Standard No. 5) is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control over financial reporting that is less severe than a material weakness, yet important enough to merit attention by those responsible for oversight of our financial reporting.


Management does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all error and fraud. Any control system, no matter how well designed and operated, is based upon certain assumptions and can provide only reasonable, not absolute, assurance that its objectives will be met. Further, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been detected.


Subsequent to February 28, 2015, we completed the reverse acquisition of LFC.  LFC did not have disclosure controls and procedures or internal controls over financial reporting at the time of the acquisition, as a result of which we do not have such controls in place on the date of this annual report.  We cannot assure you that we will be able to develop, implement and maintain effective controls in the future.

This annual report does not include an attestation report of our registered accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the our registered public accounting firm pursuant to rules of the SEC that permit us to provide only management's report in this annual report.


The conclusion

Because of chief executive officer and chief financial officer regarding our disclosure controls and procedures is based solely on management's conclusionthe material weaknesses described above, management believes that, ouras of December 31, 2017, we did not maintain effective internal control over financial reporting wasbased on the COSO (2013) criteria.

Management believes that the material weaknesses set forth above did not effective.


Management does not believehave an effect on our Company’s financial results.

c) Changes in Internal Control Over Financial Reporting.

As defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, there were no changes that there have been any changes in our internal control over financial reporting, whichoccurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect our internal control over financial reporting.

12

ITEM 9B. OTHER INFORMATION.

None.

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE


The Board of Directors and Executive Officers of the Company

The following table and text sets forth certain information with respect tothe names and ages of all our current directors and executive officers.

officers and our key management personnel as of the date hereof. All of our directors serve until the next annual meeting of stockholders and until their successors are elected and qualified, or until their earlier death, retirement, resignation or removal. Executive officers serve at the discretion of the Board of Directors.

Name

Age

Age

Position

Shaun Donnelly

47

47

Chief executive officer, presidentExecutive Officer, Chief Financial Officer and director

Terry Butler56Chief financial officer and directorDirector

Set forth below is a brief description of the background and business experience of our sole officer and director. 

Shaun Donnelly, has been chief executive officer and a director since the completion of the reverse acquisition on March 31, 2015.  age 48, Chief Executive Officer, Director

Mr. Donnelly is an entertainment industry veteran who has created, produced and directed television series for such networks as Starz, AMI, ITV, Playboy TV, UKTV and YouToo. Mr. Donnelly served as LFC's chief executive officer and sole director of LFC since its inception on July 21, 2014, and from April 2013 to July 2014, Mr. Donnelly operated a business similar to LFC's as a sole proprietorship, during which time he produced two events. Since 2005, Mr. Donnelly has served as the head of Canada's Mind Engine Entertainment, where he has produced several feature films including the recently completed "Gone By Dawn." Prior to getting into TV and film, Mr. Donnelly worked in the advertising industry where, in 1993, he founded Stormedia Communications, an Edmonton-based ad agency that specialized in oil and gas clients. He also published the literary digest Writer's Block Magazine for seven years and has worked as a writer and columnist for numerous magazines and newspapers. Mr. Donnelly attended Grant MacEwan University where he earned diplomas in Advertising & Public Relations and Audio Visual Communications. Mr. Donnelly does not believe that his duties with Mind Engine Entertainment will interfere with his duties as our chief executive officer.


Terry Butler has been

Family Relationships

Since Mr. Donnelly is our chief financialsole officer and a director, since July 2012.  Mr. Butler also served as chief executive officer from July 2012 until the completionthere are no family relationships between any of our officers or directors.

Compliance with Section 16(A) of the reverse acquisitionExchange Act

Section 16(a) of the Exchange Act requires the Company’s directors, executive officers and persons who beneficially own 10% or more of a class of securities registered under Section 12 of the Exchange Act to file reports of beneficial ownership and changes in beneficial ownership with LFCthe SEC. Directors, executive officers and greater than 10% stockholders are required by the rules and regulations of the SEC to furnish the Company with copies of all reports filed by them in compliance with Section 16(a).

20
Table of Contents

Based solely on Marchour review of certain reports filed with the Securities and Exchange Commission pursuant to Section 16(a) of the Securities Exchange Act of 1934, as amended, the reports required to be filed with respect to transactions in our common stock during the fiscal year ended December 31, 2015.  For more than the past five years, Mr. Butler has been a private investor.


2017, were timely.

Board Committees

We have no audit, compensation or nominating committee. The functions of these committees are performed by the board of directors.our sole director. We do not have any independent directors.

Code of Ethics

We have not adopted a code of ethics as of the date of this report

Board Attendance
Duringreport.

Legal Proceedings

To the year ended February 28, 2015,best of our knowledge, none of our directors or executive officers has, during the boardpast ten years:

·

been convicted in a criminal proceeding or been subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);

·

had any bankruptcy petition filed by or against the business or property of the person, or of any partnership, corporation or business association of which he was a general partner or executive officer, either at the time of the bankruptcy filing or within two years prior to that time;

·

been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction or federal or state authority, permanently or temporarily enjoining, barring, suspending or otherwise limiting, his involvement in any type of business, securities, futures, commodities, investment, banking, savings and loan, or insurance activities, or to be associated with persons engaged in any such activity;

·

been found by a court of competent jurisdiction in a civil action or by the Securities and Exchange Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated;

·

been the subject of, or a party to, any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated (not including any settlement of a civil proceeding among private litigants), relating to an alleged violation of any federal or state securities or commodities law or regulation, any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order, or any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or

·

been the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

21
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Except as set forth in our discussion below in “Certain Relationships and Related Transactions,” none of our directors did not holdor executive officers has been involved in any meetings, since we had one director.  All actions were taken by actions in writing.

transactions with us or any of our directors, executive officers, affiliates or associates which are required to be disclosed pursuant to the rules and regulations of the Commission.

ITEM 11. EXECUTIVE COMPENSATION.

The following summary compensation table indicates the cash and non-cash compensation earned during the years ended February 28, 2015December 31, 2017 and 20142016 by each person who served as chief executive officer and chief financial officer during the year ended February 28. 2015. 


December 31, 2016.

SUMMARY COMPENSATION TABLE

Name and Principal Position

 

Year

 

Salary

($)

 

 

Bonus

($)

 

 

Stock Awards
($)

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shaun Donnelly, Chief Executive Officer,

 

2017

 

$120,000

 

 

$--

 

 

$--

 

 

$120,000

 

Chief Financial Officer and Director (1)

 

2016

 

$30,000

 

 

 

72,669

 

 

$42,669

 

 

$102,669

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Charles Connaughton, Chief Financial Officer

 

2017

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

Officer (2)

 

2016

 

 

--

 

 

 

--

 

 

 

30,000

 

 

 

30,000

 

_______________

Name and Principal Position

1.Fiscal YearMr. Donnelly accrued compensation at the rate of $10,000 per month during the fourth quarter fiscal 2016; however, we only paid $9,500 compensation to Mr. Donnelly during either fiscal 2016. Mr. Donnelly did not accrue compensation subsequent to the fourth quarter of fiscal 2016. On September 3, 2016, Mr. Donnelly was issued 51 Series A preferred shares valued at $42,669.

Salary
($)

2.
Bonus
($)
Mr. Connaughton was granted 300,000 shares of restricted stock with a $0.10 par value. Mr. Connaughton resigned from the position of Chief Financial Officer on May 4, 2017.
Stock Awards
($)
All Other Compensation
($)
Total ($)

 
Terry Butler, chief executive and financial officer
22
2015
2014
0
0
0
0
0
0
0
0
0
0
 
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Executive Employment Contracts

The Company entered into an employment agreement dated October 1, 2016 with Shaun Donnelly. Pursuant to the agreement, Mr. Butler accruedDonnelly will continue to be employed as Chief Executive Officer of the Company. The initial term of the Employment Agreement is for a period of twelve (12) months (the “Initial Term”).

During the Initial Term, the Company will pay Mr. Donnelly a monthly base compensation at the rate of $10,000 per$10,000. The base salary shall accrue each month during fiscal 2014 and the first six months of fiscal 2015; however, we did not pay any compensationwhen due to Mr. Butler during either fiscal 2015 or fiscal 2014.  Mr. Butler did not accrue compensation subsequentDonnelly pursuant to the second quarter of fiscal 2015, and at February 28, 2015, Mr. Butler contributed his accrued compensation,terms as stated in the amountEmployment Agreement, it being understood that the Company may refrain from making cash payment of $270,000,the base salary to capital, as a result ofMr. Donnelly for those months in which wethe Company does not have no furtherthe cash and/or funds available to satisfy the base salary obligation to Mr. Butler with respectDonnelly. All amounts of base salary that remain unpaid but due and owing to compensationMr. Donnelly at the end of each calendar month shall accrue or may be converted into shares of the Company’s common stock.

Effective September 30, 2017, the Company and Mr. Donnelly entered into an amendment to the Employment Agreement.. Pursuant to the terms of the amendment, the employment contact term is for periods priora twelve month term, which term shall automatically renew yearly for an additional twelve (12) month term unless agreement is terminated in writing by Company within thirty (30) days of expiration of term. In addition, the amendment also adds the responsibility and duty of Chief Financial Officer to February 28, 2015.


Executive Employment Contracts
We have no employment agreements with anyMr. Donnelly.

Compensation of Directors

Currently, members of our officers.

Equity Compensation Plan Information
Our boardBoard of directors and stockholders approved the 2010 long term incentive plan, which covers the issuance of 2,125 shares.  No shares were issued under the plan during the year ended February 28, 2015, and there areDirectors receive no outstanding options under the plan.
compensation.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.


The following table providessets forth, as of July 19, 2018, certain information atwith respect to the beneficial ownership of our common stock by each shareholder known by us to be the beneficial owner of more than 5% of our Common Stock and by each of our current directors and executive officers. Each person has sole voting and investment power with respect to the shares of common stock beneficially ownedCommon Stock, except as otherwise indicated.

Under the rules of May 23, 2015:

the Securities and Exchange Commission, a person is deemed to be a beneficial owner of a security if that person has or shares voting power, which includes the power to vote or direct the voting of the security, or investment power, which includes the power to vote or direct the voting of the security. The person is also deemed to be a beneficial owner of any security of which that person has a right to acquire beneficial ownership within 60 days. Under the Securities and Exchange Commission rules, more than one person may be deemed to be a beneficial owner of the same securities, and a person may be deemed to be a beneficial owner of securities as to which he or she may not have any pecuniary beneficial interest.

 
each director for director;23
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Shares of Common Stock which an individual or group has a right to acquire within 60 days pursuant to the exercise or conversion of options are deemed to be outstanding for the purpose of computing the percentage ownership of such individual or group, but are not deemed to be outstanding for the purpose of computing the percentage ownership of any other person shown in the table below.

Name of Beneficial Owner (1)

 

Shares of

Series A

Preferred (3)

 

 

Percent of

Series A

Preferred (2)

 

 

Shares of

Common

Stock

 

 

Percent of

Common

Stock (2)  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shaun Donnelly

 

 

51

 

 

 

100%

 

 

9,350,000

 

 

 

1.40%

Chief Executive Officer, Chief Financial Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

All officers and directors as a group (2 persons)

 

 

51

 

 

 

100%

 

 

9,350,000

 

 

 

1.40

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Name of beneficial owner (5%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

None                 

•  

(1)

each officer named

Beneficial ownership is determined in accordance with Rule 13D-3(a) of the Exchange Act and generally includes voting or investment power with respect to securities.

(2)

The percentages in the summary compensation table;


•  eachtable have been calculated on the basis of treating as outstanding for a particular person, owning of record or known by us, based on information provided to us by the persons named below, to own beneficially at least 5%all shares of our common stock;stock outstanding on that date and all shares of our common stock issuable to that holder in the event of exercise of outstanding options, warrants, rights or conversion privileges owned by that person at that date which are exercisable within 60 days of that date. Except as otherwise indicated, the persons listed below have sole voting and investment power with respect to all shares of our common stock owned by them, except to the extent that power may be shared with a spouse. Based on 665,925,639 share equivalents of common stock as of April 30, 2018.

(3)

Each one share of the Series A Preferred Stock has voting rights equal to (x) 0.019607 multiplied by the total issued and outstanding shares of common stock of the Company eligible to vote at the time of the respective vote (the “Numerator”), divided by (y) 0.49, minus (z) the Numerator. For purposes of illustration only, if the total issued and outstanding shares of common stock of the Company eligible to vote at the time of the respective vote is 5,000,000, the voting rights of one share of the Series A Preferred Stock shall be equal to 102,036 (0.019607 x 5,000,000) / 0.49) – (0.019607 x 5,000,000) = 102,036). The Series A Preferred Stock has no dividend rights, no liquidation rights and no redemption rights, and was created primarily to be able to obtain a quorum and conduct business at shareholder meetings.


•  all directors and executive officers as a group.
Name 
Shares of Common
Stock Beneficially
Owned
 Percentage
Shaun Donnelly  9,350,000   47.5%
Terry Butler  1,925,000   9.8%
Danny Chan  1,925,000   9.8%
All officers and directors as a group (two individuals owning stock)  11,275,000   57.3%

The address for Mr. Donnelly and Mr. Butler is c/o Lingerie Fighting Championships, Inc., 6955 North Durango Drive, Suite 1115-129, Las Vegas 89149.  The address

24
Table of Contents

Changes in Control

We are not aware of Mr. Chanany arrangements that may result in “changes in control” as that term is 340 S. Lemon Ave., #2247, Walnut CA 91789.


Nonedefined by the provisions of the persons named in the table hold options or other rights to acquire common stock.
Item 403(c) of Regulation S-K.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.


On December 31, 2014, Mr. Butler, Mr. Chan and one non-affiliated person each made a $12,000 loan to us and received a 10% senior promissory note in the principal amount of $12,000.  The notes were due December 31, 2015 or earlier in the event that we completed a private placement

None of our stock.  The notes were paid from the proceeds of a $200,000 private placement of our common stock on March 31, 2015, contemporaneously with the completion of the reverse acquisition with LFC.  Mr. Chan was not a related party at February 28, 2015, and is deemed to have become a related party as a result of his acquisitionofficers, directors, proposed director nominees, beneficial owners of more than 5%10% of our common stock on March 31, 2015 pursuant to the share exchange agreement relating to the reverse acquisition transaction.


In February 2015, Mr. Butler and Mr. Chan each made a loan to LFC in the amount of $1,925.  The notes had a September 30, 2015 maturity date, and were converted into 1,925,000 shares of common stock, pursuant to the share exchange agreement relating to the reverse acquisition.  Prior to the issuanceor any relative or spouse of any of the shares upon conversionforegoing persons, or any relative of such spouse who has the same house as such person or who is a director or officer of any parent or subsidiary of our Company, has any direct or indirect material interest in any transaction to which we are a party since our incorporation or in any proposed transaction to which we are proposed to be a party.

Director Independence

Since our common stock is not currently listed on a national securities exchange, we have used the definition of “independence” of The NASDAQ Stock Market to make this determination. NASDAQ Listing Rule 5605(a)(2) provides that an “independent director” is a person other than an officer or employee of the promissory notes, neither Mr. Butler nor Mr. Chan heldcompany or any equity interestother individual having a relationship that, in our securities.  Two non-affiliated individuals each madethe opinion of the company’s board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a $700 loan to LFC and received 700,000 shares of common stock pursuant to the share exchange agreement.

14

Butler nor Mr. Chan held any equity interest in our securities.  Two non-affiliated individuals each made a $700 loan to LFC and received 700,000 shares of common stock pursuant to the share exchange agreement.

In addition, during fiscal 2015, Mr. Butler made a $100 advance to the Company.

Pursuant to the share exchange agreement relating to the reverse acquisition with LFC, on March 31, 2015, Shaun Donnelly exchanged his common stock in LFC for 9,350,000 shares of common stock, representing 47.5% of our outstanding common stock, after giving effect to the reverse acquisition transaction and a contemporaneous private placement of our common stock.  Prior to the issuance of these shares, Mr. Donnelly had no equity or other interest in us.  He became our chief executive officer anddirector. The NASDAQ listing rules provide that a director as a result of the reverse acquisition transaction.
Neither of our directors is ancannot be considered independent director.

if:

·

the director is, or at any time during the past three years was, an employee of the company;

·

the director or a family member of the director accepted any compensation from the company in excess of $120,000 during any period of 12 consecutive months within the three years preceding the independence determination (subject to certain exclusions, including, among other things, compensation for board or board committee service);

·

a family member of the director is, or at any time during the past three years was, an executive officer of the company;

·

the director or a family member of the director is a partner in, controlling stockholder of, or an executive officer of an entity to which the company made, or from which the company received, payments in the current or any of the past three fiscal years that exceed 5% of the recipient’s consolidated gross revenue for that year or $200,000, whichever is greater (subject to certain exclusions);

·

the director or a family member of the director is employed as an executive officer of an entity where, at any time during the past three years, any of the executive officers of the company served on the compensation committee of such other entity; or

·

The director or a family member of the director is a current partner of the company’s outside auditor, or at any time during the past three years was a partner or employee of the company’s outside auditor, and who worked on the company’s audit.

Based upon the above criteria, we have no independent directors.

25
Table of Contents

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.

Since we do not have a formal audit committee, our board of directors serves as our audit committee. We have not adopted pre-approval policies and procedures with respect to our accountants. All of

The following table sets forth the services provided and fees chargedbilled by our principal independent registered accounting firms were approved by the boardaccountants for each of directors.  Duringour last two fiscal 2015 and 2014, our board of directors consisted of one individual, Mr. Terry Butler.

The following is a summary of the fees for professional services rendered by MaloneBaileyyears for the year ended February 28, 2015 and by Simon & Edward for the years ended February 28, 2015 and 2014.

MaloneBailey:
Fee Category 2015 
Audit fees $6,500 
Audit-related fees  -- 
Tax fees  -- 
Other fees  -- 
Total Fees $6,500 

Simon & Edward:

Fee Category 2015  2014 
Audit fees $10,000  $39,000 
Audit-related fees  --   -- 
Tax fees  --   1,000 
Other fees  --   -- 
Total Fees $10,000  $40,000 

Audit fees.    Audit fees represent fees for professionalcategories of services performed by MaloneBailey and Simon & Edward for the audit of the applicable 2015 and 2014 annual financial statements.
Audit-related fees.    We did not incur any other fees for services performed by and MaloneBailey or Simon & Edward.
Tax Fees.      We incurred tax service fee in the amount of $0 and $1,000 for the years ended February 28, 2015 and 2014, respectively.     
Other fees.     MaloneBailey and Simon & Edward did not receive any other fees during 2015 or 2014.
15

Index
PART IV
ITEM 15.  EXHIBITS, FINANIAL STATEMENT SCHEDULES
indicated.

 

 

Year Ended December 31,

 

Category

 

2017

 

 

2016

 

Audit Fees (1)

 

$25,000

 

 

$24,000

 

Audit Related Fees (2)

 

$--

 

 

$--

 

Tax Fees (3)

 

$--

 

 

$--

 

All Other Fees (4)

 

$--

 

 

$--

 

___________

Exhibit Number

(1)

Description

Consists of fees billed for the audit of our annual financial statements, review of our Form 10-K and services that are normally provided by the accountant in connection with year end statutory and regulatory filings or engagements.

3.1

(2)

Consists of fees billed for the review of our quarterly financial statements, review of our forms 10-Q and 8-K and services that are normally provided by the accountant in connection with non-year end statutory and regulatory filings on engagements.

(3)

Consists of professional services rendered by a company aligned with our principal accountant for tax compliance, tax advice and tax planning.

(4)

The services provided by our accountants within this category consisted of advice and other services relating to SEC matters, registration statement review, accounting issues and client conferences.

 
26
Table of Contents

Item 15.Exhibits, Financial Statement Schedules.

Exhibits

2.1

Share Exchange Agreement dated March 31, 2015, by and among Cala Energy Corp., Lingerie Fighting Championships, Inc., and the Shareholders of Lingerie Fighting Championships, Inc.

Form 8-K filed with the Securities and Exchange Commission on April 7, 2015 and incorporated herein by reference.

2.2

Agreement and Plan of Merger dated April 1, 2015, by and among the Company and Lingerie Fighting Championships, Inc.

Form 8-K filed with the Securities and Exchange Commission on April 7, 2015 and incorporated herein by reference.

2.3

Articles of Merger effective as of April 1, 2015 with the Nevada Secretary of State.

Form 8-K filed with the Securities and Exchange Commission on April 7, 2015 and incorporated herein by reference.

3.1

Amendment to Articles of Incorporation

Form 8-K filed with the Securities and Exchange Commission on November 16, 2017 2017 and incorporated herein by reference.

3.2

Amendment to Articles of Incorporation

Form 8-K filed with the Securities and Exchange Commission on February 14, 2017 and incorporated herein by reference.

3.3

Amendment to Articles of Incorporation

Form 8-K filed with the Securities and Exchange Commission on February 14, 2017 and incorporated herein by reference.

3.4

Amendment to Articles of Incorporation

Form 8-K filed with the Securities and Exchange Commission on September 19, 2016 and incorporated herein by reference.

3.5

Certificate of Change of the Company pursuant to Nevada Revised Statutes Section 78.209, as filed with the Secretary of State of the State of Nevada on March 20, 2015.

Form 8-K filed with the Securities and Exchange Commission on April 7, 2015 and incorporated herein by reference.

3.6

Amended and Restated Articles of Incorporation of the Company, as amended *Company.

Form 10-K Filed with the Securities and Exchange Commission on May 5, 2014 and incorporated herein by this reference.

3.2

3.7

Amended Articles of Incorporation of the Company.

Form 10-K filed with the Securities and Exchange Commission on June 13, 2013 and incorporated herein by this reference.

3.8

Amended Articles of Incorporation of the Company.

Form 8-K filed with the Securities and Exchange Commission on March 31, 2010 and incorporated herein by this reference.

3.9

Amended and Restated Articles of Incorporation of Company

Form 8-K filed with the Securities and Exchange Commission on April 24, 2009 incorporated herein by this reference.

 
27
Table of Contents

3.10

Articles of Organization of the Company.

Form 8-K filed with the Securities and Exchange Commission on April 24, 2009 and incorporated herein by this reference.

3.11

Amended and Restated Bylaws of the Company (1)

Form 8-K filed with the Securities and Exchange Commission on July 22, 2015 and incorporated herein by this reference.

10.1

3.12

Bylaws of the Company

Form SB-2 filed with the Securities and Exchange Commission on December 12, 2007 and incorporated herein by this reference.

10.1

Form of Founders Agreement, dated July 31, 2014, by and among Lingerie Fighting Championships, Inc., and Mohammed Ismail.

Form 8-K filed with the Securities and Exchange Commission on April 7, 2015 and incorporated herein by reference.

10.2

Form of Founders Agreement, dated July 28, 2014, by and among Lingerie Fighting Championships, Inc., Michelle C. Blanchard and Stephen J. Ureczky.

Form 8-K filed with the Securities and Exchange Commission on April 7, 2015 and incorporated herein by reference.

10.3

Form of Securities Purchase Agreement, by and among the Company and investors in the PPO financing.

Form 8-K filed with the Securities and Exchange Commission on April 7, 2015 and incorporated herein by reference.

10.4

Form of Escrow Agreement, by and among the Company, CKR Law, LLP and investors in the PPO financing.

Form 8-K filed with the Securities and Exchange Commission on April 7, 2015 and incorporated herein by reference.

10.5

2010 Long-Term Incentive Plan (2)of the Company.

Form S-8 filed with the Securities and Exchange Commission on August 23, 2010 and incorporated herein by this reference.

21.1

23.1

10.6 

Form S-1  filed with the Securities and Exchange Commission on April 28, 2016 and incorporated herein by this reference.

23.2

31.1

10.7 

Registration Rights Agreement between Company and Tangiers Global, LLC, dated as of April 4, 2016. 

Form S-1 filed with the Securities and Exchange Commission on April 28, 2016 and incorporated herein by this reference.

10.8

Commitment Fee Promissory Note between the Company and Tangiers Global, LLC, dated as of April 4, 2016. 

Form S-1 filed with the Securities and Exchange Commission on April 28, 2016 and incorporated herein by this reference.

 
28
Table of Contents

10.9

Employment Agreement between the Company and Shaun Donnelly (Form 8-K filed with the Securities and Exchange Commission on October 7, 2016 and incorporated herein by this reference)

10.10 *

Amendment to Employment Agreement between the Company and Shaun Donnelly

31.1 *

Certification of ChiefPrincipal Executive Officer, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 *2002.

31.2

31.2 *

Certification of the ChiefPrincipal Financial Officer, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 *

32.1

32.1 **

Certification of Principal Executive Officer pursuant to Rule 13a-14(b) of the Exchange Act and Section 906 of the Sarbanes-Oxley Act of 2002 *

101.INS

32.2 **

Certification of Principal Financial Officer pursuant to Rule 13a-14(b) of the Exchange Act and Section 906 of the Sarbanes-Oxley Act of 2002

101.INS

*

XBRL Instance Document

101.SCH

*

XBRL Taxonomy Schema

101.CAL

*

XBRL Taxonomy Calculation Linkbase

101.DEF

*

XBRL Taxonomy Definition Linkbase

101.LAB

*

XBRL Taxonomy Label Linkbase

101.PRE

*

XBRL Taxonomy Presentation Linkbase


___________

*   Filed herewith.

** Furnished

(1)Incorporated by reference to the Form 8-K filed by the Company on April 24, 2009. 
29(2)Incorporated by reference to the Company's registration statement on Form S-8, File No. 333-169007, which was filed on August 23, 2010.
 
Table of Contents

* filed herewith.
16

SIGNATURES

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

LINGERIE FIGHTING CHAMPIONSHIPS, INC.

Date: June 3, 2015July 20, 2018

By:

/s/ Shaun Donnelly

Shaun Donnelly

Chief Executive Officer and Chief Financial Officer

Pursuant to the requirements of the Securities Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities on the dates indicated.

Signature

Title

Date

/s/ Shaun Donnelly

Chief Executive Officer and Director (Principal Executive Officer), Chief Financial

June 3, 2015

July 20, 2018

Shaun Donnelly

/s/ Terry Butler     

Chief Financial

Officer and Director (Principal Financial and Accounting Officer), and Director

 June 3, 2015
Terry Butler
17

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS



Page
F-2
F-4
F-5
F-6
F-7
F-8

30



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors
Lingerie Fighting Championships, Inc (formerly Cala Energy Corp)

We have audited the accompanying consolidated balance sheet of Lingerie Fighting Championships, Inc (formerly Cala Energy, Corp) (the "Company")  as of February 28, 2015 and the related statements of operations, shareholders' equity(deficit)  and cash flows for the year then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, based on our audit, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of February 28, 2015, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company has incurred recurring losses, which raises substantial doubt about its ability to continue as a going concern. Management's plans in regard to this matter are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ MaloneBailey, LLP
www.malone-bailey.com
Houston, Texas

June 2, 2015
F-2

3230 Fallow Field Drive
Diamond Bar, CA 91765, U.S.A.
Tel:    +1 909 839 0188
Fax:   +1 909 839 1128
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders
Lingerie Fighting Championships, Inc. (formerly Cala Energy Corp.)
We have audited the accompanying consolidated balance sheet of Lingerie Fighting Championships, Inc. and subsidiary (the "Company") as of February 28, 2014, and the related consolidated statements of operations and other comprehensive loss, changes in stockholders' deficit and cash flows for the year ended February 28, 2014. The consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Lingerie Fighting Championships, Inc. and subsidiary as of February 28, 2014, and the results of its operations and its cash flows for the year ended February 28, 2014 in conformity with accounting principles generally accepted in the United States of America.
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the consolidated financial statements, the Company is not engaged in any business activities, has not generated any revenue from continuing operations during the past two fiscal years, has a stockholders' deficiency of $179,793 and will additional financing if it is to engage in any business activities.  These matters, among others, raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 3. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.


/s/ Simon & Edward, LLP

Diamond Bar, California
May 20, 2014
F-3

LINGERIE FIGHTING CHAMPTIONSHIPS, INC. 
(FORMERLY CALA ENERGY CORP. ) 
CONSOLIDATED BALANCE SHEETS
 
 
    
February 28
 
  2015  2014 
     
ASSETS    
Current assets    
  Cash $3,551  $35,607 
   Total current assets  3,551   35,607 
         
         
    Total assets $3,551  $35,607 
         
         
LIABILITIES AND STOCKHOLDERS' DEFICIT        
Current liabilities        
      Accounts payable and accrued expenses $6,000  $- 
      Other current liabilities  -   215,400 
      Notes payable related party  12,100   - 
      Notes payable  24,000   - 
        Total current liabilities  42,100   215,400 
         
Total liabilities  42,100   215,400 
         
Stockholders' deficit        
         
    Preferred stock, par value $0.001 per share, 10,000,000 authorized, of which 5,000,000 were designated as Series A convertible preferred stock at at February 28, 2014; none issued or outstanding  -   - 
    Common stock, par value $0.001 per share, 400,000,000 shares authorized and 424,977 shares issued and outstanding, respectively  426   426 
Additional paid in capital  8,792,276   8,522,276 
Accumulated deficit  (8,831,251)  (8,702,495)
         
            Total stockholders' deficit  (38,549)  (179,793)
            Total liabilities and stockholders' deficit $3,551  $35,607 
The accompanying notes are an integral part of the consolidated financial statements.
F-4

LINGERIE FIGHTING CHAMPTIONSHIPS, INC. 
(FORMERLY CALA ENERGY CORP. ) 
CONSOLIDATED STATEMENTS OF OPERATIONS
 
     
     
     
  
Year ended February 28
 
  2015  2014 
Revenue $-  $- 
         
Cost of revenue  -   - 
         
Gross profit  -   - 
         
Selling, general and administrative expenses $136,756  $260,154 
         
Loss from operations  (136,756)  (260,154)
         
Other income (expense)        
Other income  8,000   - 
Total other income (expense)  8,000   - 
         
         
         
Net Loss $(128,756) $(260,154)
         
         
         
Net loss per share - basic and diluted $(0.30) $(0.70)
Weighted average shares - basic and diluted  424,977   371,751 
The accompanying notes are an integral part of the consolidated financial statements.
F-5

LINGERIE FIGHTING CHAMPTIONSHIPS, INC. 
(FORMERLY CALA ENERGY CORP. ) 
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT
 
FOR THE YEARS ENDED FEBRUARY 28, 2015 and FEBRUARY 28, 2014 
               
               
               
  
Preferred Stock
  
Common Stock
  Additional     
  Number of    Number of    Paid-in  Accumulated   
  shares  Amount  shares  Amount  Capital  Deficit  Total 
               
Balance, February 28, 2013  5,000,000  $5,000   243,727  $245  $8,217,457  $(8,442,341) $(219,639)
Preferred stock converted into common stock  (5,000,000)  (5,000)  125,000   125   4,875   -   - 
Issuance of common stock to private placement  -   -   56,250   56   299,944   -   300,000 
Net loss  -   -   -   -   -   (260,154)  (260,154)
Balance, February 28, 2014  -   -   424,977   426   8,522,276   (8,702,495)  (179,793)
Forgiveness of accrued salaries by related party  -   -   -   -   270,000   -   270,000 
Net loss  -   -   -   -   -   (128,756)  (128,756)
Balance, February 28, 2015  -  $-   424,977  $426  $8,792,276  $(8,831,251) $(38,549)
The accompanying notes are an integral part of the consolidated financial statements.
F-6

LINGERIE FIGHTING CHAMPTIONSHIPS, INC. 
(FORMERLY CALA ENERGY CORP. ) 
CONSOLIDATED STATEMENTS OF CASH FLOWS
 
     
     Year ended February 28 
  2015  2014 
     
Cash Flows from operating activities:    
Net loss $(128,756) $(260,154)
Adjustments to reconcile net loss to net cash used in operating activities:        
 
Changes in operating assets and liabilities:        
Accounts payable and accrued expense  6,000   - 
Other current liabilities  54,600   114,901 
         
Net cash used in operating activities  (68,156)  (145,253)
         
         
Cash flows from financing activities:        
         
Proceeds (repayment) from related parties  -   (125,100)
Proceeds from issuance of common stock  -   300,000 
Proceeds from notes payable  24,000   - 
Proceeds from note payable- related party  12,100   - 
Net cash provided by financing activities  36,100   174,900 
         
Net increase (decrease) in cash  (32,056)  29,647 
Cash, beginning of the period  35,607   5,960 
         
Cash, end of the period $3,551  $35,607 
         
Supplemental disclosures of cash flow for non-cash transaction:        
Interest paid $-  $- 
Income taxes paid $-  $- 
         
Non-cash financing activities:        
Contribution to capital of accrued salaries forgiven by a related party $270,000  $- 
Issuances of common stock due to conversion of preferred stock $-  $5,000 
The accompanying notes are an integral part of the consolidated financial statements.
F-7

LINGERIE FIGHTING CHAMPIONSHIPS, INC.
(formerly known as CALA ENERGY CORP.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
February 28, 2015 and 2014
NOTE 1 – NATURE OF OPERATIONS AND BASIS OF PRESENTATION
Lingerie Fighting Championships, Inc. (the "Company") is a Nevada corporation incorporated on November 29, 2006 under the name Sparking Events, Inc.  The Company's corporate name was changed to Xodtec Group USA, Inc. in June 2009, Xodtec LED, Inc. in May 2010, Cala Energy Corp. in September 2013 and Lingerie Fighting Championships, Inc. on April 1, 2015.

Prior to May 31, 2012, the Company, through its subsidiaries, was engaged in the design, marketing and selling of advanced lighting solutions which are designed to use less energy and have a longer life than traditional incandescent, halogen, fluorescent light sources.  
On From April 2009 until July 13, 2012, through its subsidiaries, the Company was engaged in design, marketing and selling of advanced lighting solutions which are designed to use less energy and have a longer life than traditional incandescent, halogen, fluorescent light sources.   The Company was not able to generate profit from operations for during this period.  For the last years in that the Company was in that business, it financed its operations primarily from funds provided by its officers and directors.

On July 13, 2012, pursuant to agreements with one of the Company's former directors, the Company transferred the stock in its subsidiaries and its 35% ownership in an inactive company to the former director in exchange for cancellation of debt totaling $100,000.  As a result of the transfer of the subsidiaries, the Company as no longer engaged in the lighting solutions business.  The Company transferred the stock of the subsidiaries because it felt that, as a result of its continuing losses and its inability to develop the business as it had planned, it was not in the Company's best interest to continue in this business.

On July 14, 2012 Morgan Stanley Smith Barney Custodian fbo Terry Butler Roth IRA ("Butler Roth IRA") acquired, for nominal consideration, 31,236 shares of common stock from the director who acquired the subsidiaries and 24,252 shares of common stock from our then chief executive officer, who was also a director.  On July 18, 2012, the Butler Roth IRA and the Company entered into a loan agreement pursuant to which the Butler Roth IRA agreed to lend the Company up to $150,000, for which the Company issued its 6% demand promissory note in the principal amount of $150,000.  The securities were issued in Mr. Butler's name.

On September 14, 2012, the Company entered into agreement pursuant to which it issued to Terry Butler, who was then the Company's sole director and chief executive officer, 131,037 shares of common stock and 5,000,000 shares of a newly-created series of preferred stock, which was designated as the series A convertible preferred stock, in consideration of the cancellation of debt due in the amount of $819,319.

On May 23, 2013, Mr. Butler sold to Jia Hang 182,832 shares of common stock and 5,000,000 shares of series A convertible preferred stock for a total consideration of $300.  The preferred stock became convertible into 125,000 shares of common stock on May 30, 2013, upon the filing of an amendment to our articles of incorporation increasing our authorized common stock to 400,000,000 shares.  Upon such conversion Mr. Hang owned 307,832 shares of common stock, representing 72.5% of the then outstanding common stock.

The Company initially planned to focus on providing an internet based security system to companies that would like to replace security guards with video cameras that are monitored 24/7.  Through February 28, 2014, the Company did not generate any revenue from this new proposed business, and it discontinued its efforts with respect to that business.
The Company subsequently considered providing enhanced oil recovery services and supplying materials to existing operators of oil fields in Indonesia.  The Company was unable to develop that business and, during the year ended February 28, 2015, it investigated other potential acquisition candidates, and, on March 31, 2015, the Company acquired LFC in a reverse acquisition transaction.

At February 28, 2015, the Company did not have any subsidiaries.  At February 28, 2014, the Company had one subsidiary, Cala Energy International Corp., which was inactive at February 28, 2014 and whose existence was terminated during the year ended February 28, 2015.
F-8

LINGERIE FIGHTING CHAMPIONSHIPS, INC.
(formerly known as CALA ENERGY CORP.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
February 28, 2015 and 2014
Reverse Stock Split

On March 20, 2015, the Company effected a one-for-800 reverse stock split pursuant to which each share of common stock then outstanding became one-800th of a shares, with fractional shares being rounded up to the next higher whole number of shares.   All share and per share information in these financial statements retroactively reflect this reverse split.  See Note 8.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principals of consolidation

The consolidated financial statements include the accounts of and its controlled subsidiaries. Equity investments in which the Company exercises significant influence, but does not control and is not the primary beneficiary, are accounted for using the equity method of accounting. Investments in which the Company does not exercise significant influence over the investee are accounted for using the cost method of accounting. Intercompany transactions are eliminated.  As of February 28, 2014, the Company had one subsidiary, Cala Energy International Corp., which was inactive.  At February 28, 2015, the Company had no subsidiaries.

Use of Estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the amount of revenues and expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made. However, actual results could differ materially from those results.

Cash and Cash Equivalents

The Company considers all highly liquid investments with the original maturities of three months or less to be cash equivalents. The Company had $3,551 and $35,607 in cash as at February 28, 2015 and February 28, 2014, respectively.

Segment Information
ASC 280 requires companies to report information about operating segment in interim and annual financial statements. It also requires segment disclosures about products and services geographic and major customers. The Company has determined that it does not have any separately reportable operating segments.

Advertising and Promotion Costs

Costs associated with advertising and promotions are expensed as incurred. The Company did not incur any advertising and promotion costs for the years ended February 28, 2015 and 2014.

Fair Value of Financial Instruments

The fair values of the Company's accrued expenses and other current liabilities approximate their carrying values due to the relatively short maturities of these instruments. The carrying value of the Company's short and long term debt approximates fair value based on management's best estimate of the interest rates that would be available for similar debt obligations having similar terms at the balance sheet date.

Income Taxes
The Company accounts for income taxes in accordance with ASC 740, Income Taxes, which requires that the Company recognize deferred tax liabilities and assets based on the differences between the financial statement carrying amounts and the tax basis of assets and liabilities, using enacted tax rates in effect in the years the differences are expected to reverse. Deferred income tax benefit (expense) results from the change in net deferred tax assets or deferred tax liabilities. A valuation allowance is recorded when, in the opinion of management, it is more likely than not that some or all of any deferred tax assets will not be realized.
F-9

LINGERIE FIGHTING CHAMPIONSHIPS, INC.
(formerly known as CALA ENERGY CORP.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
February 28, 2015 and 2014
The Company adopted ASC 740-10-25, Income Taxes- Overall-Recognition, on January 1, 2007, which provides criteria for the recognition, measurement, presentation and disclosure of uncertain tax position. The Company must recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution. The Company did not recognize any additional liabilities for uncertain tax positions as a result of the implementation of ASC 740-10-25.

Net Loss per Share
The Company calculates its basic and diluted earnings per share in accordance with ASC 260. Basic earnings per share are calculated by dividing net income by the weighted average number of common shares outstanding for the period. Diluted earnings per share are calculated by adjusting the weighted average outstanding shares to assume conversion of all potentially dilutive warrants and options and convertible securities.  Because the Company generated a net loss in the years ended February 28, 2015 and 2014, any convertible securities were anti-dilutive.

Recent Accounting Pronouncements

The Company has considered all new accounting pronouncements and has concluded that there are no new pronouncements that may have a material impact on results of operations, financial condition, or cash flows, based on current information.

NOTE 3 - GOING CONCERN MATTERS
The accompanying financial statements have been prepared on a going concern basis which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the financial statements, during the years ended February 28, 2015 and 2014, the Company did not engage in any business activities or generate any revenue, and the Company incurred a loss from operations of $136,756 and a net loss of $128,756 for the year ended February 28, 2015 and a loss from operations and a net loss of $260,154 for the year ended February 28, 2014.  The Company has a stockholders' deficit of approximately $39,000 at February 28, 2015 and $180,000 at February 28, 2014.  In addition, the Company had a negative cash flow in operating activities of approximately $68,000 and $145,000 for the years ended February 28, 2015 and 2014, respectively. These factors raise substantial doubt about the Company's ability to continue as a going concern. The Company may seek funding through additional issuance of common stock and/or borrowings from financial institutions; however, market conditions, together with the absence of an active trading market in the Company's common stock and the trading price of the common stock make it difficult for the Company to raise cash from the sale of equity and the Company's financial condition make it extremely difficult to borrow funds. The accompanying consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

NOTE 4 – RELATED PARTY TRANSACTIONS
On December 31, 2014, the chief executive officer made a $12,000 loan to the Company, for which the Company issued its 10% senior promissory note in the principal amount of $12,000.  The note, which has the same terms as and was issued contemporaneously with the notes described in Note 5, was due December 31, 2015 or earlier in the event that the Company completes a private placement of its common stock.  As of February 28, 2015, the balance due on the note is $12,000.  The chief executive officer also made an advance to the Company of $100.  The following table sets forth information concerning notes payable related party:
  
February 28,
2015
  
February 28,
2014
 
Non-interest bearing and payable on demand to chief executive officer of the Company $100  $- 
10% senior promissory note due to the chief executive officer  12,000   - 
Total $12,100  $- 

In February 2015, the chief executive officer forgave $270,000 of accrued compensation, which represented all accrued compensation through February 28, 2015.  This forgiveness of indebtedness is treated as a contribution to capital and the amount of the forgiveness was transferred from liabilities to additional paid-in capital.

NOTE 5 – NOTES PAYABLE
On December 31, 2014, one individual who was not a related party at February 28, 2015 and one other non-affiliated person each made a $12,000 loan for which the Company issued its 10% senior promissory note in the principal amount of $12,000.  The notes were due December 31, 2015 or earlier in the event that the Company completes a private placement of our stock.  At February 28, 2015, notes in the principal amount of $24,000 were outstanding.
F-10

LINGERIE FIGHTING CHAMPIONSHIPS, INC.
(formerly known as CALA ENERGY CORP.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
February 28, 2015 and 2014
NOTE 6 – CAPITAL STOCK

On September 25, 2012, the Company filed a certificate of designation setting forth the rights, preferences and privileges of a new series of preferred stock designated as the series A convertible preferred stock, consisting of 5,000,000 shares. Each share of series A preferred stock was convertible into 20 shares of common stock. However, the series A preferred stock could not be converted into common stock until such date as the Company increased the number of authorized shares of common stock, either by an increase in the authorized common stock or a reverse split or combination of shares such that there are a number of authorized shares of common stock that are available, free from preemptive rights, equal to the maximum number of shares of common stock issuable upon conversion of the number of authorized shares of series A preferred stock.

On May 30, 2013, the Company amended its articles of incorporation to increase the authorized common stock from 225,000,000 shares to 400,000,000 shares.  The par value of $0.001 per share remained unchanged. In June 2013, the 5,000,000 shares of series A convertible preferred stock were converted into 125,000 shares of common stock.  As a result of the conversion of the series A convertible preferred stock, the converted shares became shares of preferred stock, without designation as to class.

During May 2013, the Company sold 50,000 shares of its common stock at its fair value $4.00 per share to investors, for which it received a total of $200,000.

During October and November 2013, the Company sold 6,250 shares of its common stock at its fair value $16.00 per share to investors, for which it received a total of $100,000.

In February 2015, the chief executive officer forgave $270,000 of accrued compensation, which represented all accrued compensation through February 28, 2015.  This forgiveness of indebtedness is treated as a contribution to capital and the amount was transferred from liabilities to additional paid-in capital.

NOTE 7– INCOME TAXES
The Company did not provide any current or deferred U.S. federal income tax provision or benefit for any of the periods presented because the Company has experienced operating losses for U.S. federal income tax purposes since inception. When it is more likely than not that a tax asset cannot be realized through future income the Company must allow for this future tax benefit.  

The Company had a change in ownership during 2013.  As a result, due to the change in ownership provisions of the Internal Revenue Code, net operating loss carryforwards for federal income tax reporting purposes are subject to annual limitations. Should a further change in ownership occur, net operating loss carryforwards may be further limited as to use in future years.

The Company has fully reserved the benefit from the tax loss carryforward as follows:

Net operating loss carryforward at February 28, 2015 $8,343,675 
Tax rate  34%
Tax benefit of net operating loss carryforward $2,836,850 
Valuation allowance $(2,836,850)
Deferred income tax asset $0 
F-11

LINGERIE FIGHTING CHAMPIONSHIPS, INC.
(formerly known as CALA ENERGY CORP.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
February 28, 2015 and 2014
NOTE 8 – SUBSEQUENT EVENTS

On March 20, 2015, the Company effected a one-for-800 reverse stock split of its common stock pursuant to which each share of common stock then outstanding became one-800th of a share, with fractional shares being rounded up to the next higher whole number of shares.  All share and per share information has been retroactively adjusted to reflect the reverse split.

March 31, 2015, the Company acquired all of the capital stock of Lingerie Fighting Championships, Inc., a Nevada corporation ("LFC"), in a transaction which is accounted for as a reverse acquisition.  LFC, was incorporated in July 2014. LFC's activities from inception through December 31, 2014, were devoted primarily to the development, production, promotion and distribution of original entertainment which the plan to make commercially available predominantly through live entertainment events, as well as through digital home video, broadcast television networks, video-on-demand and digital media channels, although LFC did not produce any events since its organization. As a result of, and in connection with, the reverse acquisition:

·The Company issued to the holders of the LFC common stock and convertible notes a total of 16,750,000 shares of common stock;
·The Company issued 2,500,000 additional shares of common stock for $200,000, or $0.08 per share,  in a private placement;
·The shares of common stock issued to the holders of the LFC common stock and convertible notes represents approximately 85.1% of our outstanding common stock after giving effect to the reverse split, the reverse acquisition and the private placement;
·The Company's business became the business of LFC;
·The Company changed its corporate name to Lingerie Fighting Championships, Inc.;
·The Company changed its fiscal year to the calendar year, which was the fiscal year of LFC prior to the reverse acquisition;
·LFC was merged into the Company; and
·Shaun Donnelly, who was the sole director and chief executive officer of LFC, became a director and chief executive officer.

The Company received the proceeds from the private placement of its common stock on April 2, 2015, and paid the 10% senior promissory notes in the principal amount of $36,000.  See Notes 4 and 5.

F-12