UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

[X] Quarterly report pursuant section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended December 31, 20162018

[  ] Transition report pursuant section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from ________________ to ________________

Commission file number 333-198828000-55697

Life Clips, Inc.

(Exact Name of Registrant as Specified in Its Charter)

18851 NE 29th Ave, Suite 700

Aventura, FL 33180Phone: (800) 292-8991

(Address andRegistrant’s telephone number of registrant’s principal executive offices and principal place of business)including area code: (800) 292-8991

Not ApplicableSecurities registered pursuant to Section 12(b) of the Act:

(Former name, former address and former fiscal year, if changed since last report)

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

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

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

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Indicate by check mark whether the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act and Section 13(a) of the Exchange Act. ___

LIFE CLIPS, INC.

FORM 10-Q FOR THE QUARTER ENDED DECEMBER 31, 20162018

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Life Clips, Inc. and Subsidiary (F/K/A Blue Sky Media Corporation)

Consolidated Balance Sheets

– The Company measures assets and liabilities at fair value based on an expected exit price as defined by the authoritative guidance on fair value measurements, which represents the amount that would be received on the sale of an asset or paid to transfer a liability, as the case may be, in an orderly transaction between market participants. As such, fair value may be based on assumptions that market participants would use in pricing an asset or liability. The authoritative guidance on fair value measurements establishes a consistent framework for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical level.

The following are the hierarchical levels of inputs to measure fair value:

The carrying amounts of the Company’s financial assets and liabilities, such as cash, prepaid expenses, other current assets,accounts receivable, accounts payable, & accrued expenses and interest, certain notes payable and notes payable – related party, approximate their fair values because of the short maturity of these instruments.

The Company accounts for its derivative liabilities, at fair value, on a recurring basis under level 3. See3 (See Note 8.6).

Embedded Conversion Features

– The Company evaluates embedded conversion features within convertible debt under ASC 815 “Derivatives and Hedging” to determine whether the embedded conversion feature(s) should be bifurcated from the host instrument and accounted for as a derivative at fair value with changes in fair value recorded in earnings. If the conversion feature does not require derivative treatment under ASC 815, the instrument is evaluated under ASC 470-20 “Debt with Conversion and Other Options” for consideration of any beneficial conversion feature.

Derivative Financial Instruments

– The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported as charges or credits to income.

For option-based simple derivative financial instruments, the Company uses the Black-Scholes option-pricing model to value the derivative instruments at inception and subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period.

Debt Issue Costs and Debt Discount

– The Company may record debt issue costs and/or debt discounts in connection with raising funds through the issuance of debt. These costs may be paid in the form of cash, or equity (such as warrants). These costs are amortized to interest expense overincluded in the lifeline item loss on extinguishment of the debt. If a conversion of the underlying debt occurs, a proportionate share of the unamortized amounts is immediately expensed.

Stock based compensationBased Compensation – ASC 718 “Compensation - Stock Compensation” codified SFAS No. 123 prescribes accounting and reporting standards for all stock basedstock-based compensation plansplan payments awardawarded to employees, including employee stock options, restricted stock, employee stock purchase plans and stock appreciation rights, which may be classified as either equity or liabilities. The Company should determine if a present obligation to settle the share basedshare-based payment transaction in cash or other assets exists. A present obligation to settle in cash or other assets exists if: (a) the option to settle by issuing equity instruments lacks commercial substance or (b) the present obligation is implied because of an entity’s past practices or stated policies. If a present obligation exists, the transaction should be recognized as a liability; otherwise, the transaction should be recognized as equity.

The Company accounts for stock basedstock-based compensation issued to nonemployees and consultants in accordance with the provisions of ASC 50550 “Equity Based505-50 “Equity-Based Payments to Non-Employees” which codified SFAS 123 and the Emerging Issues Task Force consensus in Issue No. 9618, “Accounting for Equity Instruments that are Issued to Other Than Employees for Acquiring or in Conjunction with Selling, Goods or Services”. Measurement of share basedshare-based payment transactions with nonemployees shall be based on the fair value of whichever is more reliably measurable: (a) the goods or services received; or (b) the equity instruments issued. The fair value of the share basedshare-based payment transaction should be determined at the earlier of performance commitment date or performance completion date.

Common Stock – On December 15, 2015, the Company filed Articles of Amendment to authorize 320,000,000 shares of common stock, to change the par value to $0.001 and to execute a 11:1 forward stock split. All common stock and per share data for the period presented in this Quarterly Report on Form 10-K have been adjusted to give effect to the forward stock split.

Preferred Stock – On December 15, 2015, the Company filed Articles of Amendment to authorize 20,000,000 shares of preferred stock, par value $0.001.

Recognition of Revenues – The Company recognizes revenue in accordance with Staff Accounting BulletinStandards Update (“ASU”) No. 104,2014-09 “Revenue Recognition in Financial Statements”from Contracts with Customers”. This statement establishedThe Company recognizes as revenues the amount of the transaction price that revenue can be recognizedis allocated to the respective performance obligations when persuasive evidence of an arrangement exists, the servicesperformance obligation is satisfied, or as it is satisfied. The Company primarily sells disposable and recyclable cell phone batteries. The Company’s performance obligation is satisfied when the goods have been delivered, which is at a point in time. The Company applies the following five steps in order to determine the appropriate amount of revenue recognized as it fulfills its obligations under each of its agreements:

Recently Issued Accounting Pronouncements – Financial Accounting Standards Board (“FASB”) ASU 2016-02 “Leases (Topic 842)”- In February 2016, the FASB issued ASU 2016-02, which will require lessees to recognize almost all leases on their balance sheet as a right-of-use asset and a lease liability. For income statement purposes, the FASB retained a dual model, requiring leases to be classified as either operating or finance. Classification will be based on criteria that are largely similar to those applied in current lease accounting, but without explicit bright lines. Lessor accounting is similar to the current model, but updated to align with certain changes to the lessee model and the new revenue recognition standard. This ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently evaluating the potential impact this standard will have on its consolidated financial statements and related disclosures.

FASB ASU 2015-17 “Income Taxes (Topic 740)” - In November 2015, the FASB issued ASU 2015-17, which simplifies the presentation of deferred tax assets and liabilities on the balance sheet. Previous GAAP required an entity to separate deferred income tax liabilities and assets into current and noncurrent amounts on the balance sheet. The amendment requires that deferred tax liabilities and assets be classified as noncurrent in a classified balance sheet. This ASU is effective for annual periods beginning after December 15, 2017, and interim periods within annual periods beginning after December 15, 2018. The Company has adopted ASU 2015-17 as of July 1, 2017. Adopting this standard did not have a material impact on the Company’s consolidated financial statements or financial statement disclosures.

FASB ASU 2014-09 “Revenue from Contracts with Customers (Topic 606),” or ASU 2014-09 - In May 2014, the FASB issued ASU 2014-09, which supersedes the revenue recognition requirements of ASC Topic 605 “Revenue Recognition.” ASU 2014-09 requires revenue recognition to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new revenue recognition model requires identifying the contract, identifying the performance obligations, determining the transaction price, allocating the transaction price to performance obligations and recognizing the revenue upon satisfaction of the performance obligations. ASU 2014-09 also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant contractual obligations have been satisfied,judgments and change in judgments, and assets recognized from costs incurred to obtain or fulfill a contract. ASU 2014-09 can be applied either retrospectively to each prior reporting period presented or retrospectively with the feecumulative effect of initially applying the update recognized at the date of the initial application along with additional disclosures. This ASU is fixedeffective for annual reporting periods beginning after December 15, 2017, with the option to adopt as early as December 15, 2016. The Company adopted the new revenue guidance effective July 1, 2017. There was no material impact to the Company’s consolidated financial statements or determinable and collection is reasonably assured.financial statement disclosures.

Subsequent Events– The Company follows the guidance in Section 855-10-50 of the FASB Accounting Standards CodificationASC 855 “Subsequent Events” for the disclosure of subsequent events. The Company will evaluate subsequent events through the date when the financial statements are issued.

Pursuant to ASU 2010-09 of the FASB Accounting Standards Codification,ASC, the Company, as an SEC filer, considers its financial statements issued when they are widely distributed to users, such as through filing them on EDGAR.

Recent Pronouncements –The Company reviewed all recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the AICPA, and the SEC and they did not or are not believed by management to have a material impact on the Company’s present or future financial statements.

NOTE 3. UNCERTAINTY OF ABILITY TO CONTINUE AS A GOING CONCERN

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying financial statements, the Company has minimal revenues, net accumulated losses since inception and a shareholders’an accumulated deficit of $(16,916,471).$16,778,555. These factors raise doubt about its ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on management funding operating costs and the successful production and sales release of the Life Clips camera.costs. The 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 TRANSACTIONSNOTES PAYABLE

At December 31, 20162018 and June 30, 2016, there were no related party transactions.

NOTE 5. INTANGIBLE ASSETS

The Company is developing software. The development cost for the period ended December 31 2016 is $14,625. The software has an infinite useful life and will be tested annually for impairment.

NOTE 6. NOTES PAYABLE

On July 14, 20162018, the Company issued a $30,000 promissory note to NUWA Group, LLC. The promissory note is a standard, non-convertible note. The effective interest rate is 5.00% per annum, calculated yearly not in advance. The note is to be repaid in full on October 14, 2016. Note proceeds are to be used for operating expenses.

Pursuant to the Stock Purchase Agreement by and among Batterfly Energy, LTD and the Company, on July 11, 2016 the Company issued a $500,000 Promissory Note and Stock Pledge Agreement to the former shareholders of Batterfly Energy, LTD. The promissory note is a standard, non-convertible note. The effective interest rate is 1.00% with a default interest rate of 10.00%. The note is to be repaid inhad two (2) payments, $250,000 on October 11, 2016 and the balance due on February 13, 2017.

At December 31, 2016 and June 30, 2016 the Company had notes payable in the amount of $530,000, and $0, respectively.with the following terms:

NOTE 7. CONVERTIBLE DEBT AND WARRANTS

The Company has recorded derivative liabilities associated with convertible debt instruments and warrants, as more fully discussed at Note 8.

(A) Convertible DebtNOTE 5. CONVERTIBLE DEBT

Convertible Notes

On October 2, 2015,August 8, 2018, the Company completedentered into an offering of its 3.85%18% Convertible Promissory Notes (the “3.85% Notes”)Note with Long Side Ventures LLC, an unaffiliated third party. The note was in the aggregatea principal amount of $617,578$15,000, and on December 7, 2015 the Company completed an offering of its 10% Convertible Promissory Notes (the “10% Notes”) in the aggregate principal amount of $250,000 (the “10% Notes”, and together with the 3.85% Notes, eachis convertible at a “Note” and collectively, the “Notes”price equal to fifty percent (50%), as applicable, with certain “accredited investors” (the “Investors”), as defined under Regulation D, Rule 501 of the Securities Act. The entire principal amount oflowest trading price during the Notes remaining outstanding at December 31, 2016 was $417,588, such amount being exclusive of securities converted into the Notes separate from the offering of the Notes. Pursuant to the offering of the Notes, the Company received $617,578 and $250,000 in net proceeds on October 2, 2015 and December 7, 2015, respectively.

In addition to the terms customarily included in such instruments, the Notes began accruing interest on the date that each Investor submitted the principal balance of such Investor’s Note, with the interest thereon becoming due and payable on the two-year anniversary of said date. Upon a default of the Notes, the interest rate will increase to 18%. The principal balance of each Note and all unpaid interest will become due and payable twenty-four (24) months after the date of issuance. The Notes may be prepaid with or without a penalty depending on the date of the prepayment. The principal and interest under the 3.85% Notes are converted at $ $0.026. The principal and interest under the 10% Notes are convertible into shares of the Company’s common stock at 75% times the Volume Weighted Average Price for a 5 daysfive-trading day period prior to the conversion date as quoted on the OTC market and pursuant to the terms of a Security Purchase Agreement, dated as of October 2, 2015 and December 7, 2015, as applicable, by and between the Company and each Investor.conversion. The note maturity date is August 8, 2019.

In connection with the Notes Offering,On September 24, 2018, the Company entered into Registration Rights Agreements, each dated asan 18% Convertible Promissory Note with Long Side Ventures LLC, an unaffiliated third party. The note was in a principal amount of October 2, 2015$5,000, and December 7, 2015 and each by and between us and eachis convertible at a price equal to fifty percent (50%) of the Investors.

The company entered into convertible notes with eleven third party accredited investors from December 2015 to December 2016. In addition tolowest trading price during the terms customarily included in such instruments, the Notes began accruing interest on the date that each Investor submitted the principal balance of such Investor’s Note, with the interest thereon becoming due and payable on terms specified in said date (see below). Interest rates range from 5% to 10% and are due at various dates from August 2016 to March 2018. These notes are convertible at any time by the investor,five-trading day period prior to the date of conversion. The note maturity date is September 24, 2019.

On September 26, 2018, the Company entered into an 18% Convertible Promissory Note with Crest Ventures LLC, an unaffiliated third party. The note was in a principal amount of $5,000, and interest being repaidis convertible at rates ranging from $0.006a price equal to $0.033 per share, subject to change due to a ratchet feature contained in mostfifty percent (50%) of the notes.lowest trading price during the five-trading day period prior to the date of conversion. The note maturity date is September 26, 2019.

On November 28, 2018, the Company entered into an 18% Convertible Promissory Note with Long Side Ventures LLC, an unaffiliated third party. The note was in a principal amount of $50,000 and is convertible at a price equal to fifty percent (50%) of the lowest trading price during the five-trading day period prior to the date of conversion. The note maturity date is November 28, 2019.

(B) TermsThe Company evaluated the convertible promissory notes under ASC 815 Derivatives and Hedging (“ASC 815”). ASC 815 generally requires the analysis of Debtembedded terms and features that have characteristics of derivatives to be evaluated for bifurcation and separate accounting in instances where their economic risks and characteristics are not clearly and closely related to the risks of the host contract. The material embedded derivative consists of the embedded conversion feature. The conversion option bears risks of equity which were not clearly and closely related to the host debt agreement and required bifurcation. See Note 6 for further discussion.

The debt carries interest between 3.85% and 10%, and is due in October 2017 through March 2018.

All convertible debt in connection with the Notes Offering are convertible at $0.026 and $0.033/share (on December 31, 2016), however, the Notes include a “ratchet feature”, which allows for a lower offering price based on market prices.

(C) Future Commitments

At December 31, 2016, the Company has outstanding convertible debt of $1,920,088 which is payable within the next fifteen months.

(D) Warrants

The Company issued six warrants dated from February to July 2016. Four of the warrants are related to consulting agreements and two are related to convertible note holders. All warrants issued through December 31, 2016 were accounted for as derivative liabilities, as the warrants were not held on reserve at and therefore tainted. See Note 8. Two warrants issued were exercised during the period ended September, 2016. The details are:

NOTE 8. DERIVATIVE LIABILITIES

The Company identified conversion features embedded within convertible debt and warrants issued in the period ended December 31, 2016. The Company has determined that the features associated with the embedded conversion option, in the form a ratchet provision, should be accounted for at fair value, as a derivative liability, as the Company cannot determine if a sufficient number of shares would be available to settle all potential future conversion and warrant transactions.

As a result of the application of ASC No. 815, the fair value of the ratchet feature related to convertible debt and warrants is summarized as follow:

The fair value at the commitment and re-measurement dates for the Company’s derivative liabilities were based upon the following management assumptions as December 31, 2016:

NOTE 9. CONVERTIBLE DEBT - NETDebt Discount

The Company recorded the debt discount to the extent of the gross proceeds raised and expensed immediately the remaining fair value of the derivative liability, as it exceeded the gross proceeds of the note.

Future Commitments

At December 31, 2018 the Company has outstanding convertible debt of $2,428,960, which is due within the next 12 months.

NOTE 6 –DERIVATIVE FINANCIAL INSTRUMENTS

The Company’s convertible promissory notes and detachable warrants gave rise to derivative financial instruments. The notes embodied certain terms and conditions that were not clearly and closely related to the host debt agreement in terms of economic risks and characteristics. These terms and features consist of the embedded conversion option. Additionally, the detachable warrants contained terms and features that gave rise to derivative liability classification. As of December 31, 2018, the Company recorded debt discountdoes not have enough authorized shares to settle all potential conversion and warrant transactions.

The following tables summarize the components of $315,598the Company’s derivative liabilities and linked common shares as of December 31, 20162018 and $2,076,912June 30, 2018 and the amounts that were reflected in income related to derivatives for the year ended June 30, 2016.period ended:

*including principal and interest

*including principal and interest

Accumulated amortizationThe following table summarizes the effects on the Company’s gain (loss) associated with changes in the fair values of debt discount amounted to $1,619,379 asthe derivative financial instruments by type of financing for the three months ended December 31, 20162018 and $487,3992017:

The following table summarizes the effects on the Company’s gain (loss) associated with changes in the fair values of the derivative financial instruments by type of financing for the yearsix months ended June 30, 2016.December 31, 2018 and 2017:

Current accounting principles that are provided in ASC 815 - Derivatives and Hedging require derivative financial instruments to be classified in liabilities and carried at fair value with changes recorded in income. The Company recorded amortization expensehas selected the Binomial Lattice Model, which approximates the Monte Carlo Simulations, valuation technique to fair value the compound embedded derivative because it believes that this technique is reflective of all significant assumption types, and ranges of assumption inputs, that market participants would likely consider in transactions involving compound embedded derivatives. Such assumptions include, among other inputs, interest risk assumptions, credit risk assumptions and redemption behaviors in addition to traditional inputs for option models such as market trading volatility and risk-free rates. The Binomial Lattice Model technique is a level three valuation technique because it requires the debt issuance costdevelopment of $1,131,979significant internal assumptions in addition to observable market indicators.

Significant inputs and results arising from the Monte Carlo Simulation process are as follows for the embedded derivatives that have been bifurcated from the convertible notes and classified in liabilities:

The Company has selected the Black Scholes Merton valuation technique to fair value the detachable warrants because it believes that this technique is reflective of all significant assumption types, and ranges of assumption inputs, that market participants would likely consider in transactions involving compound embedded derivatives.

Significant inputs and results arising from the Black Scholes Merton process are as follows for the detachable warrants classified in liabilities:

The following table reflects the issuances of compound embedded derivatives and detachable warrants and changes in fair value inputs and assumptions related to the embedded derivatives and detachable warrants during the six months ended December 31, 20162018 and $487,399 for the year ended June 30, 2016.2017.

NOTE 10.7. EQUITY

For the six-month period ended December 31, 2016 36,466,902 shares of common stock were issued bringing the total shares issued and outstanding to 89,799,478.Authorized Capital

On October 2, 2015 (the “Effective Date”) the Company entered into and closed on a merger and exchange agreement (the “Share Exchange Agreement”) with Klear Kapture in an effort to expand its current line of business. Klear Kapture has developed a body camera and an auditable software solution suitable for use by law enforcement that it intends to produce, market and sell. Following the closing of the Share Exchange Agreement, we intend to continue Klear Kapture’s historical business and proposed business and have entered into a services agreement with our former executive officers and directors to operate our film marketing, distribution and production video and APP development businesses pursuant to the terms of a Services Agreement dated October 2, 2015 (the “Services Agreement”). However, we no longer intend to operate the pre-transaction business of the Company.

Pursuant to a consulting agreement with a non-related third party, we issued 3,190,000 shares on October 2, 2015 for a price of approximately $0.00318 per share (an aggregate of $10,150), which was recorded as consulting services.

On December 15, 2015,April 4, 2017, the Company filed Articles of Amendment to authorizeRestatement with the Wyoming Secretary of State authorizing 320,000,000 shares of common stock, par value $0.001 per share (the “Common Stock”) and 20,000,000 shares of Preferred Stock, par value $0.001 (the “Preferred Stock”). The Board may issue shares of Preferred Stock in one or more series and fix the rights, preferences and privileges thereof, including voting rights, terms of redemption, redemption prices, liquidation preferences, number of shares constituting any series or the designation of such series, without further vote or action by the stockholders.

On June 28, 2017, the Company filed Articles of Amendment to authorize 20,000,000 sharean increase in the number of authorized shares of Common Stock from 300,000,000 to 800,000,000.

On September 28, 2017, the Company filed Articles of Amendment to authorize an increase in the number of authorized shares of Common Stock from 800,000,000 to 5,000,000,000.

Preferred Stock

Effective as of May 19, 2017, the Company amended its Articles of Incorporation to designate 1,000,000 shares of preferred stock as Series A Preferred Stock, with a par value of $0.001 per share (the “Series A Stock”). Each share of Series A Stock ranks, with respect to dividend rights and rights upon liquidation, winding up or dissolution of the Company, the same as the common stock of the Company, par value $0.001 per share (the “Common Stock”) and is not entitled to execute a 11:1 forward stock split. All common stock and perany specific dividends or other distributions, other than those declared by the Board of Directors. Each share date for the period presented in this Annual Reportof Series A Stock has 100 votes on Form 10-K has been adjusted to give effect to the forward stock split.

Pursuant to the terms of the Share Exchange Agreement, as of the Effective Date, we agreed to issue 38,037,120 shares of our unregistered common stockany matter submitted to the shareholders of Klear Kapture in exchange for 10,000 shares of its common stock, representing 100% of its issuedthe Company, and outstanding common stock in the Share Exchange. As part of the Share Exchange, we purchased 107,261,000 shares of our common stock from our former executive officers and directors for a price of approximately $ 0.00318 per share (an aggregate of $345,000). Upon the Effective Date, Klear Kapture became a wholly owned subsidiary of our company and our pro-forma shares of common stock outstanding giving effect to the repurchase of shares from our former executive officers and directors is 53,343,620. Robert Gruder who was appointed as our Chief Executive Officer and a Director in connectionSeries A Stock votes together with the Share Exchange received 30,296,563 sharesholders of our common stock in exchange for 7,965 shares of Klear Kapture’s common stock he previously owned. Mr. Gruder’s ownership of our common stock at the exchange date represented approximately 56.8% of our issued and outstanding shares of common stock. At September 30, 2016 Mr. Gruder’s ownershipall other capital stock of our commonthe Company (including the Common Stock and any other series of preferred stock represents approximately 30.8%then outstanding), and not as a separate class, series or voting group on any such matter. The Series A Preferred Stock is not transferrable by the holder and may be redeemed by the Company at any time for the par value. In the event that the holder of ourSeries A Preferred Stock who is an employee or officer of the Company leaves their position as an employee or officer of the Company for any reason, the Series A Preferred Stock held by that holder will be automatically cancelled and will revert to being authorized and unissued shares of Series A Preferred Stock. The Series A Stock is not convertible into any other class of shares of the Company.

On May 25, 2017, the Company issued 1,000,000 shares of Series A Stock to Victoria Rudman, the Company’s Chief Financial Officer, in return for services provided to the Company by Ms. Rudman and outstanding shares.to ensure Ms. Rudman’s continued service to the Company.

Effective as of June 2, 2017, the Company amended its Articles of Incorporation by amending the Certificate of Designation for the Series A Stock to increase the number of votes that each share of Series A Stock has to 200 votes. Effective as of August 7, 2017, the Company again amended its Articles of Incorporation by amending the Certificate of Designation for the Series A Stock to increase the number of votes that each share of Series A Stock has to 400 votes.

Stock and Incentive Plan

On April 20, 2016,2017, the companyCompany adopted the Life Clips, Inc. 20162017 Stock and Incentive Plan under which the Company may issue nonqualified stock options, incentive stock options, stock appreciation rights, restricted stock grants and units, performance units and awards of cash. A maximum of 20,000,000 shares of common stock may be issued under the plan, representing in excess of 35% of the number of the Company’s currently outstanding shares. Awards under the plan will be made at the discretion of the Board of Directors, although no awards have been made to date. Accordingly, the Company cannot currently determine the amount of awards that will be made under the plan.

Warrants and Options

At December 31, 2018 and June 30, 2018, the Company had 975,000 warrants outstanding, with a strike price of $0.40. No warrants were granted, forfeited or expired during the six month periods ended December 31, 2018 and 2017. The Company has issued six warrants dated from February to July 2016. Fourweighted average remaining lives of the warrants are related to consulting agreementswere 0.34 and two are related to convertible note holders. See Note 7 (D) for details:0.84 at December 31, 2018 and June 30, 2018, respectively.

On August 31, 2016, the company issued 2,593,247 shares of its common stock to NUWA Group LLC in a cashless warrant exchange pursuant to the terms of a business consulting agreement dated February 22, 2016. The share price at the effective date was $0.365 and the warrant for 2,600,000 shares was exercisable at $0.001 per share for total increase in Common Stock of $2,593.25 and in Additional Paid In Capital of $943,941.91.NOTE 8. COMMITTMENTS AND CONTINGENCIES

On September 9, 2016,From time to time, the company issued 2,500,000 sharesCompany may be a party to other legal proceedings. Management currently believes that the ultimate resolution of its common stock to Long Side Ventures LLC in exchange for $65,000.00these matters will not have a material adverse effect on consolidated results of the purchaser’s convertible note payable. The original issuance date of the $ 151,072.71 note payable was October 2, 2015. The exercise price of the note was stated at $0.026 per common share. The proceeds reduced Convertible Notes Payable $65,000.00.operations, financial position, or cash flow.

On September 20, 2016, the company issued 1,910,511 shares of its common stock to Binary Ventures, Inc. in a cashless warrant exchange pursuant to the terms of a business consulting agreement dated March 10, 2016. The share price at the effective date was $0.221 and the warrant for 1,916,500 shares was exercisable at $0.001 per share for total increase in Common Stock of $1,910.51 and in Additional Paid In Capital of $420,312.42.

On October 24, 2016, the company issued 1,807,229 shares of its common stock to Susannah Forest 2011 Revocable Trust in exchange for $150,000.00 of the purchaser’s convertible note payable. The original issuance date of the $ 250,000.00 note payable was December 7, 2015. The exercise price of the note was stated at 75% of the volume weighted average price of the Company’s common stock for a 5-day period prior to the conversion date, subject to certain minimum and maximum conversion prices. The proceeds reduced Convertible Notes Payable $150,000.00.

On October 26, 2016, the company issued 3,534,706 shares of its common stock to Bezalel Partners, LLC in exchange for $60,090.00 of the purchaser’s convertible note payable. The original issuance date of the $ 164,359.76 note payable was October 2, 2015. The exercise price of the note was stated at $0.017. The proceeds reduced Convertible Notes Payable $60,090.00.

On November 29, 2016, the company issued 268,102 shares of its common stock to R&T Sports Marketing, Inc. in exchange for $25,000.00 of the purchaser’s convertible note payable. The original issuance date of the $ 25,000.00 note payable was April 26, 2016. The exercise price of the note was stated at 75% of the volume weighted average price of the Company’s common stock for a 5-day period prior to the conversion date, subject to certain minimum and maximum conversion prices. The proceeds reduced Convertible Notes Payable $25,000.00.

On December 6, 2016, the company issued 157,895 shares of its common stock to Atlanta Capital Partners, LLC in exchange for $15,000.00 of the purchaser’s convertible note payable. The original issuance date of the $ 15,000.00 note payable was August 23, 2016. The exercise price of the note was stated at 75% of the volume weighted average price of the Company’s common stock for a 5-day period prior to the conversion date. The proceeds reduced Convertible Notes Payable $15,000.00.

On December 7, 2016, the company issued 2,900,000 shares of its common stock to Taconic Group, LLC in exchange for $75,400.00 of the purchaser’s convertible note payable. The original issuance date of the $ 151,072.71 note payable was October 2, 2015. The exercise price of the note was stated at $0.026 per common share. The proceeds reduced Convertible Notes Payable $75,400.00.

On December 7, 2016, the company issued 3,731,343 shares of its common stock to Edgestone Associates, Inc. in exchange for $37,500.00 of the purchaser’s convertible note payable. The original issuance date of the $ 700,000.00 note payable was May 13, 2016. The exercise price of the note was stated at 50% multiplied by the Market Price, defined as the lowest Trading Price for the Common Stock during the twenty (20) Trading Day period ending on the last complete Trading Day prior to the Conversion Date. The proceeds reduced Convertible Notes Payable $37,500.00.

On December 8, 2016, the company issued 1,346,221 shares of its common stock to Summit Trading Partners, LLC in exchange for $50,000.00 of the purchaser’s convertible note payable. The original issuance date of the $ 50,000.00 note payable was April 26, 2016. The exercise price of the note was stated at 75% of the volume weighted average price of the Company’s common stock for a 5-day period prior to the conversion date, subject to certain minimum and maximum conversion prices. The proceeds reduced Convertible Notes Payable $50,000.00.

On December 15, 2016, the company issued 4,017,648 shares of its common stock to Bezalel Partners, LLC in exchange for $68,300.00 of the purchaser’s convertible note payable. The original issuance date of the $ 164,359.76 note payable was October 2, 2015. The exercise price of the note was stated at $0.017. The proceeds reduced Convertible Notes Payable $68,300.00.

On December 26, 2016, the company issued 1,200,000 shares of its common stock to Taconic Group, LLC in exchange for $31,200.00 of the purchaser’s convertible note payable. The original issuance date of the $ 151,072.71 note payable was October 2, 2015. The exercise price of the note was stated at $0.026 per common share. The proceeds reduced Convertible Notes Payable $31,200.00.

NOTE 11.9. SUBSEQUENT EVENTS

The Company follows the guidance in Section 855-10-50 of the FASB Accounting Standards Codification for the disclosure of subsequent events. The company will evaluate subsequent events through the date of the issuance of the financial statements.

On January 11, 2017, the Company received a default notice related to the Company’s Batterfly acquisition. On July 11, 2016 the Company entered into a Stock Purchase Agreement$500,000 promissory note (the “Agreement”“Batterfly Acquisition Note”) withissued to the sellers of Batterfly Energy, Ltd. Pursuant to(“Batterfly”) as partial consideration for the agreement, and the related PromissoryCompany’s July 11, 2017 acquisition of Batterfly. The Batterfly Acquisition Note (the “Note”),required the Company was to make an initiala payment of $500,000 to the Batterfly sellers, with $250,000 being due on October 6, 20162017 and $250,000 being due on February 13, 2017. The default letter states that the Company failed to pay the initial $250,000 payment due on October 6, 2016,2017, which began to accrue interest of 11% from October 6, 2016.2017. In addition, the default notice states that the Company owes $20,000 in aggregate to two of the Batterfly shareholders related to consulting fees associated with the Batterfly acquisition. Finally, the default notice states that a payment of $250,000, as well as an additional payment of $20,000 must be paid by January 23, 2017. The Company is currently deciding howfiled a claim against the sellers of Batterfly with the London Court of International Arbitration (LCIA Arbitration No: 173692) and on September 7, 2017 the parties entered into a Stipulation for Stay of Arbitration in the matter as they seek to proceed and respondnegotiate a settlement of their claim. The claim was settled during 2019 for which the Company agreed to issue 62,991,567 shares of common stock to the default notice.sellers of Batterfly. As of the date of this filing, the shares are still pending issuance.

On February 9, 2017 2,553,104June 2, 2020, the Board of Directors, agreed to issue 5,260,000,000 common stock shares were issued in a conversionlieu of a convertible note payable.unpaid management and director salaries of the accrued amounts from July 1, 2018 through and including March 31, 2020. As of the date of this filing, the shares are still pending issuance.

On February 9, 2017 4,480,000 shares were issued in a conversion of a convertible note payable.

Item 2. Management’s discussion and analysis of financial condition and results of operations.

Unless we specify otherwise, all referencesForward-Looking Statements

The following discussion contains forward-looking statements regarding us, our business, prospects and results of operations that are subject to certain risks and uncertainties posed by many factors and events that could cause our actual business, prospects and results of operations to differ materially from those that may be anticipated by such forward-looking statements. Factors that may affect such forward-looking statements include, without limitation: our ability to successfully develop new products and services for new markets; the impact of competition on our revenues, changes in law or regulatory requirements that adversely affect or preclude clients from using us for certain applications; delays our introduction of new products or services; and our failure to keep pace with our competitors.

When used in this Annual Report to the “Company,” “our,” “we” and “us” refer to Life Clips, Inc. and its consolidated subsidiaries. In addition to statements of current and historical facts, this Quarterly Report on Form 10-K contains forward-looking statements. Thediscussion, words “forecast,” “will,” “intend,” “anticipate,” “project,” “intend,” “expect,” “should,” “believe”such as “believes”, “anticipates”, “expects”, “intends” and similar expressions are intended to identify forward-looking statements. These forward-looking statements involve known and unknown risks, uncertainties, assumptions and other factors, including those discussed in “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limitedthe exclusive means of identifying forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the following:

This list of factors that may affect future performance and the accuracy of forward-looking statements are illustrative but not exhaustive. Accordingly, all forward-looking statements should be evaluated with an understanding of their inherent uncertainty. Except as required by law, we assume no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.our business.

General Information about Our Company

We wereLife Clips, Inc. (“Life Clips”, “we,” “us,” “our,” and the “Company”) was incorporated in Wyoming on March 20, 2013 and our principal business was providing consumers with an alternative way to capture, manage, share, broadcast and enjoy situational life experiences. Prior to October 2, 2015, when we acquired by Klear Kapture, Inc., a Delaware corporation (“Klear Kapture”), our name was “Blueas Blue Sky Media Corporation” and ourits principal business was developing, financing, producing and distributing motion pictures and related entertainment products. Following the Company’s October 2, 2015 acquisition of Klear Kapture, Inc. (“Klear Kapture”), the Company continued Klear Kapture’s business of developing a body camera and an auditable software solution suitable for use by law enforcement. The Company changed its name to Life Clips, Inc. on November 3, 2015 in order to better reflect its business operations at the time.

On September 22,July 11, 2016, Life Clips entered intothe Company completed its acquisition (the “Acquisition”) of all of the outstanding equity securities of Batterfly Energy Ltd. (“Batterfly”), an Israel-based corporation that develops and distributes a partnership license agreementsingle-use, cordless battery under the brand name Mobeego for use with HP.cellular phones and other mobile devices. Batterfly is now a wholly owned subsidiary of the Company. The agreement allows Life ClipsAcquisition was completed pursuant to design, manufacturea Stock Purchase Agreement, dated as of June 10, 2016 (the “Purchase Agreement”), among the Company, Batterfly and sell HP branded action cameras, 360 cameras, dash cameras and still cameras. The agreement also calls for accessory sales andall of the buildingshareholders of an online cloud repository to store, edit and share user created videos and pictures.Batterfly, as amended.

The agreement called forFollowing the companyacquisition of Batterfly, we began to no longer sell the Life Clips branded cameras or accessories to eliminate channel conflict or confusion. Therefore, the company will focus its efforts on creating best in class HP branded products and accessories.developing three synergistic businesses:

The Company acquired Batterfly Energy in July, 2016. Batterfly manufactures the Mobeego brand emergency cell phone battery. The Mobeego provides an extra 20-40% shot of poweris currently pursuing alternative business opportunities. There has been limited activity due to a cell phone without having to be tethered or charged. The batteries have a 10-year shelf life.delay in securing funding. The Company realizedis working to re-energize the packaging that was inherited did not conveybusiness within the message properly and is in the process of re-packaging the product.

Life Clips is restructuring to become a global consumer electronics company focused on developing hardware and accessories for mobility through the Mobeego brand and Digital Imaging Products through the Hewlett Packard (HP) brand. We are developing the design, sourcing, logistics and sales operations to quickly increase our sales of our existing products and put us in a position to launch new product in 2017.next 12 months.

Our common stock is quoted for trading on the OTCQB under the symbol “LCLP.” Our principal executive offices are located at Harbour Centre, 18851 NE 29^thAvenue., Suite 700, Aventura, FL 33180. Our telephone number is (800) 292-8991.Recent Developments

None

Significant Accounting Policies

Please see Note 2 to the Company’s unaudited financial statements as of and for the three and six months ended December 31, 20162018 included in this AnnualQuarterly Report for a discussion of the Company’s significant accounting policies.

Results of Operations for the Three Months Ended December 31, 2018 and 2017

For the sixthree months ended December 31, 20162018 and 2015,2017, we had gross revenuesprofit of $86,176$0 and $0$485 respectively.

Total operating expenses were $2,236,922$91,480 compared with $201,591$154,245 for the sixthree months ended December 31, 20162018 and 2015,2017, respectively. In connectionThe decrease is directly related to lower professional fees and other G&A expenses.

Other Income (Expense) was $2,489,036 when compared with $(1,456,389) for the completion of the share exchange transaction with Klear Kapture on October 2, 2015, the Company received additional working capital. The Company believed that continuing to operate its existing line of business was not in the best interests of its shareholders. New management decided tothree months ended December 31, 2018 and 2017, respectively. This change the primary focus of the business. Using the new working capital, the Company continued developing Klear Kapture’s concepts of an innovative state-of-the-art action camera set. Operating expenses therefore increased significantlyis primarily due to software and design costs associated with the developing including adding new employees.a change in fair value of derivatives.

Net income for the sixthree months ended December 31, 20162018 was $3,537,865$2,397,556 as compared to net loss of $5,044,180 at$1,610,149 for the three months ended December 31, 2015. 2017

The increased net income was primarily due to calculations of SFAS 123R, which requires that companies use a fair value method to value stock options and other forms of share-based payments and recognize the related compensation expense in calculating net earnings. SFAS 123R applies to all companies that have issued stock options and other stock-based compensation, whether the firm is a large public company with actively traded, liquid stock, a public company whose stock is thinly traded, or a private company.

The Company is focusing its business model on the developmentResults of mobile power and imaging productsOperations for the successSix Months Ended December 31, 2018 and 2017

For the six months ended December 31, 2018 and 2017, we had gross profit of continued operations. We are immediately increasing our sales efforts on our unique products$0 and $512 respectively.

Total operating expenses were $186,839 compared with $347,846 for the six months ended December 31, 2018 and 2017, respectively. The decrease is directly related to lower professional fees and other G&A expenses.

Other Income (Expense) was $7,233,752 when compared with $(2,933,387) for the six months ended December 31, 2018 and 2017, respectively. This change is primarily due to a change in fair value of derivatives.

Net income for the six months ended December 31, 2018 was $7,046,913 as compared to net loss of $3,280,721 for the six months ended December 31, 2017.

The net income was primarily due to calculations of SFAS 123R, which requires that are already available such ascompanies use a fair value method to value stock options and other forms of share-based payments and recognize the Mobeego one-time charger for mobile devices. This device allows yourelated compensation expense in calculating net earnings. SFAS 123R applies to use your smartphone, tabletall companies that have issued stock options and other stock-based compensation, whether the firm is a large public company with actively traded, liquid stock, a public company whose stock is thinly traded, or any mobile device up to 4 hours on a single emergency charge. Once your done you simply dispose of the recyclable battery.private company.

Liquidity and Capital Resources

Liquidity is the ability of an enterprise to generate adequate amounts of cash to meet its needs for cash requirements. As of the period ending December 31, 20162018 the Company had cash on hand of $13,717, total current assets of $75,819 and$45,866, total assets of $104,161,$45,866, total current liabilities of $4,149,150$6,255,173 and total shareholder’s deficit of $16,916,471.$6,209,307.

The Company’s cash was generated from a series of convertible notes issued to non-related third parties, and a $30,000 promissory note to a non-related third party and a $500,000 short term promissory note as part of the acquisition of Batterfly Energy LTD.parties. The Company plans to raise additional working capital via additional notes or equity sales to ensure that it will have enough cash to fund its primary operation for the next twelve (12) months.

The Company has no agreements in place with its shareholders, officer and director or with any third parties to fund operations beyond the end of the Company’s December 31, 20162018 period ended. The Company has not negotiated nor has available to it any other third party sources of liquidity.

Cash flows usedfrom operating activities for the six month periods ended December 31, 2018 and 2017 were $37,386 and $147,300, respectively. The change was primarily due to net income being offset by operatingchanges in fair value of derivative liabilities.

Cash flows from financing activities totaled $75,000 and $71,500 for the six months period ended December 31, 20162018 and 2017, respectively. The $75,000 were $908,391 compared to cash flows used in operating activities of $229.923 to the six months period ended December 31, 2015.

Cash flows used in investing activities totaled $47,125 for the six months period ended December 31, 2016 and $88,957 for the six months period ended December 31, 2015.

Cash flows provided by financing activities totaled $500,000 for the six months period ended December 31, 2016 and cash flows provided by financing activities totaled $522,577 for the six months period ended December 31, 2015.proceeds from convertible notes payable.

Off-Balance Sheet Arrangements

The Company has no current off-balance sheet arrangements and does not anticipate entering into any off balance sheet arrangements that are reasonably likely to have a current or future effect on our financial condition.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Not applicable.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our chief executive officer and chief financial officer are responsible for establishing and maintaining our disclosure controls and procedures. Disclosure controls and procedures means controls and other procedures that are designed to ensure that information we are required to disclose in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and to ensure that information required to be disclosed by us in those reports is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Our chief executive officer and chief financial officer evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) as of December 31, 2015.2018. Based on that evaluation, our chief executive officer and chief financial officer have concluded that, as of the evaluation date, such controls and procedures were not effective.

Changes in internal controls

There were no changes in our internal control over financial reporting that occurred during the quarter ended December 31, 20162018 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

None.On January 11, 2017, the Company received a default notice related to a $500,000 promissory note (the “Batterfly Acquisition Note”) issued to the sellers of Batterfly Energy, Ltd. (“Batterfly”) as partial consideration for the Company’s July 11, 2016 acquisition of Batterfly. The Batterfly Acquisition Note requires the Company to make a payment of $250,000 on October 6, 2016 and $250,000 on February 13, 2017. The default letter states that the Company failed to pay the $250,000 payment due on October 6, 2016, which began to accrue interest of 11% from October 6, 2016. In addition, the default notice states that the Company owes $20,000 in aggregate to two of the Batterfly shareholders related to consulting fees associated with the Batterfly acquisition. Finally, the default notice states that a payment of $250,000, as well as an additional payment of $20,000 must be paid by January 23, 2017. The Company filed a claim against the sellers of Batterfly with the London Court of International Arbitration (LCIA Arbitration No: 173692) and on September 7, 2017 the parties entered into a Stipulation for Stay of Arbitration in the matter as they seek to negotiate a settlement of their claim. The claim was settled during 2019 for which the Company agreed to issue 62,991,567 shares of common stock to the sellers of Batterfly. As of the date of this filing, the shares are still pending issuance.

Other than as set forth above, we are not a party to any material legal proceedings, nor is our property the subject of any material legal proceeding.

Item 1 A. Risk Factors

Smaller reporting companies are not required to provide the information required by this item.

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

On December 7, 2015, we entered into a Securities Purchase Agreement (the “Purchase AgreementProperties”) with Susannah Forest (the “Purchaser”) under which the Company issued a Secured Convertible Promissory Note (the “Note”) to the Purchaser in a private placement. The Note was offered and sold in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”) and Rule 506(b) of Regulation D thereunder. The Purchaser also qualified as an “accredited investor” within the meaning of Rule 501 of Regulation D. The Company received gross proceeds of $250,000.00 from the sale of the Note.

The Purchaser has the right at any time to convert all or a portion of the outstanding and unpaid principal amount of the note and any accrued and unpaid interest into shares of common stock of the Company. The conversion price is the amount equal to 75% of the volume weighted average priceCompany’s operations are currently being conducted out of the Company’s common stockoffices located at 18851 NE 29th Ave., Suite 700 PMB# 348, Aventura, FL 33180. The Company’s office space is being rented for a 5-day period priorprice of $135 per month. The Company considers the conversion date, subject to certain minimum and maximum conversion prices. The number of shares of common stock issuable is determined by dividing the amountcurrent principal office space to be converted by the conversion price. The conversion price is subject to adjustmentadequate and will reassess its needs based upon the occurrence of certain events.

On August 31, 2016, the company issued 2,593,247 shares of its common stock to NUWA Group LLC in a cashless warrant exchange pursuant to the terms of a business consulting agreement dated February 22, 2016. The share price at the effective date was $0.365 and the warrant for 2,600,000 shares was exercisable at $0.001 per share for total increase in Common Stock of $2,593.25 and in Additional Paid In Capital of $943,941.91.

On September 9, 2016, the company issued 2,500,000 shares of its common stock to Long Side Ventures LLC in exchange for $65,000.00future growth of the purchaser’s convertible note payable. The original issuance date of the $ 151,072.71 note payable was October 2, 2015. The exercise price of the note was stated at $0.026 per common share. The proceeds reduced Convertible Notes Payable $65,000.00.Company.

On September 20, 2016, the company issued 1,910,511 shares of its common stock to Binary Ventures, Inc. in a cashless warrant exchange pursuant to the terms of a business consulting agreement dated March 10, 2016. The share price at the effective date was $0.221 and the warrant for 1,916,500 shares was exercisable at $0.001 per share for total increase in Common Stock of $1,910.51 and in Additional Paid In Capital of $420,312.42.

On October 24, 2016, the company issued 1,807,229 shares of its common stock to Susannah Forest 2011 Revocable Trust in exchange for $150,000.00 of the purchaser’s convertible note payable. The original issuance date of the $ 250,000.00 note payable was December 7, 2015. The exercise price of the note was stated at 75% of the volume weighted average price of the Company’s common stock for a 5-day period prior to the conversion date, subject to certain minimum and maximum conversion prices. The proceeds reduced Convertible Notes Payable $150,000.00.

On October 26, 2016, the company issued 3,534,706 shares of its common stock to Bezalel Partners, LLC in exchange for $60,090.00 of the purchaser’s convertible note payable. The original issuance date of the $ 164,359.76 note payable was October 2, 2015. The exercise price of the note was stated at $0.017. The proceeds reduced Convertible Notes Payable $60,090.00.

On November 29, 2016, the company issued 268,102 shares of its common stock to R&T Sports Marketing, Inc. in exchange for $25,000.00 of the purchaser’s convertible note payable. The original issuance date of the $ 25,000.00 note payable was April 26, 2016. The exercise price of the note was stated at 75% of the volume weighted average price of the Company’s common stock for a 5-day period prior to the conversion date, subject to certain minimum and maximum conversion prices. The proceeds reduced Convertible Notes Payable $25,000.00.

On December 6, 2016, the company issued 157,895 shares of its common stock to Atlanta Capital Partners, LLC in exchange for $15,000.00 of the purchaser’s convertible note payable. The original issuance date of the $ 15,000.00 note payable was August 23, 2016. The exercise price of the note was stated at 75% of the volume weighted average price of the Company’s common stock for a 5-day period prior to the conversion date. The proceeds reduced Convertible Notes Payable $15,000.00.

On December 7, 2016, the company issued 2,900,000 shares of its common stock to Taconic Group, LLC in exchange for $75,400.00 of the purchaser’s convertible note payable. The original issuance date of the $ 151,072.71 note payable was October 2, 2015. The exercise price of the note was stated at $0.026 per common share. The proceeds reduced Convertible Notes Payable $75,400.00.

On December 7, 2016, the company issued 3,731,343 shares of its common stock to Edgestone Associates, Inc. in exchange for $37,500.00 of the purchaser’s convertible note payable. The original issuance date of the $ 700,000.00 note payable was May 13, 2016. The exercise price of the note was stated at 50% multiplied by the Market Price, defined as the lowest Trading Price for the Common Stock during the twenty (20) Trading Day period ending on the last complete Trading Day prior to the Conversion Date. The proceeds reduced Convertible Notes Payable $37,500.00.

On December 8, 2016, the company issued 1,346,221 shares of its common stock to Summit Trading Partners, LLC in exchange for $50,000.00 of the purchaser’s convertible note payable. The original issuance date of the $ 50,000.00 note payable was April 26, 2016. The exercise price of the note was stated at 75% of the volume weighted average price of the Company’s common stock for a 5-day period prior to the conversion date, subject to certain minimum and maximum conversion prices. The proceeds reduced Convertible Notes Payable $50,000.00.

On December 15, 2016, the company issued 4,017,648 shares of its common stock to Bezalel Partners, LLC in exchange for $68,300.00 of the purchaser’s convertible note payable. The original issuance date of the $ 164,359.76 note payable was October 2, 2015. The exercise price of the note was stated at $0.017. The proceeds reduced Convertible Notes Payable $68,300.00.

On December 26, 2016, the company issued 1,200,000 shares of its common stock to Taconic Group, LLC in exchange for $31,200.00 of the purchaser’s convertible note payable. The original issuance date of the $151,072.71 note payable was October 2, 2015. The exercise price of the note was stated at $0.026 per common share. The proceeds reduced Convertible Notes Payable $31,200.00.

Item 3. Defaults uponUpon Senior SecuritiesSecurities.

Please see Note 6On January 11, 2017, the Company received a default notice related to a $500,000 promissory note (the “Batterfly Acquisition Note”) issued to the financial statements includedsellers of Batterfly Energy, Ltd. (“Batterfly”) as partial consideration for the Company’s July 11, 2016 acquisition of Batterfly. The Batterfly Acquisition Note requires the Company to make a payment of $250,000 on October 6, 2016 and $250,000 on February 13, 2017. The default letter states that the Company failed to pay the $250,000 payment due on October 6, 2016, which began to accrue interest of 11% from October 6, 2016. In addition, the default notice states that the Company owes $20,000 in Item 1aggregate to two of the Batterfly shareholders related to consulting fees associated with the Batterfly acquisition. Finally, the default notice states that a payment of $250,000, as well as an additional payment of $20,000 must be paid by January 23, 2017. The Company filed a claim against the sellers of Batterfly with the London Court of International Arbitration (LCIA Arbitration No: 173692) and on September 7, 2017 the parties entered into a Stipulation for Stay of Arbitration in the matter as they seek to negotiate a settlement of their claim. The claim was settled during 2019 for which the Company agreed to issue 62,991,567 shares of common stock to the sellers of Batterfly. As of the date of this Annual Report on Form 10-K, whichfiling, the shares are still pending issuance.

Other than as set forth above, we are not a party to any material legal proceedings, nor is incorporated herein by this reference.our property the subject of any material legal proceeding.

Item 4. Mining Safety Disclosures

None.Not Applicable.

Item 5. Other Information

None.Not Applicable.

Item 6. Exhibits

** Filed Herewith Furnished herewith. XBRL (eXtensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

+ Management contract or compensatory plan

SIGNATURES

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