UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

[X]QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period endedSeptember 30, 20182019

 

[  ]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from ____________ to ____________

 

Commission file number:000-54867

 

LIFEAPPS BRANDSLGBTQ LOYALTY HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

 

Delaware80-0671280

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

 

2435 Dixie Highway, Wilton Manors, FL 33305

(Address of principal executive offices, including zip code)

 

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

Tel: (858)-577-1746

(Registrant’s telephone number, including area code)

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

Securities registered pursuant to Section 12(b) of the Act:

Title of each classTrading Symbol(s)Name of each exchange on which registered
NoneN/AN/A

 

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, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” and “smaller reporting company”company,” and emerging growth company in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer[  ]Accelerated filer[  ]
Non-accelerated filer[X]Smaller reporting company[X]
  Emerging growth company

[  ]

 

If an emerging growth company, indicate by check mark if this registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [  ]

 

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

 

As of December 31, 2018November 14, 2019 there were 167,682,460 shares of common stock, $0.001 par value, issued and outstanding 107,679,152 shares of Common Stock, $0.001 par value.outstanding.

 

 

 

LIFEAPPS BRAND INC.LGBTQ Loyalty Holdings, Inc.

 

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 20182019

TABLE OF CONTENTS

 

  PAGE
   
 PART I - FINANCIAL INFORMATION3
   
Item 1.Financial Statements31
   
Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations1720
   
Item 3.Quantitative and Qualitative Disclosures About Market Risk2126
   
Item 4.Controls and Procedures2126
   
 PART II - OTHER INFORMATION22
   
Item 1.Legal Proceedings2227
   
Item 1A.Risk Factors2227
   
Item 2.Unregistered Sales of Equity Securities and Use of Proceeds2227
   
Item 3.Defaults Upon Senior Securities2228
   
Item 4.MineSafety Disclosures2228
   
Item 5.Other Information2228
   
Item 6.Exhibits2328
   
 SIGNATURES2429


i

LIFEAPPS BRAND INC.LGBTQ Loyalty Holdings, Inc.

 

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

 

ITEM 1.FINANCIAL STATEMENTS
 PAGE
  
Condensed Consolidated Balance Sheets as of September 30, 20182019 and December 31, 20172018 (unaudited)42
  
Condensed Consolidated Statements of Operations for the three months and nine months ended September 30, 20182019 and September 30, 20172018 (unaudited)53
  
Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 20182019 and September 30, 20172018 (unaudited)64
  
Reconciliation of Stockholders’ Deficit for the three and nine months ended September 30, 2019 and September 30, 2018 (unaudited)5
 
Notes to Condensed Consolidated Financial Statements (unaudited)76

  LifeApps Brands

LGBTQ Loyalty Holdings, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

 

 September 30, December 31, 
 2018 2017 
     

September 30, 2019

 

December 31, 2018

 
Assets             
Current assets:                
Cash $949  $1084  $14,093  $40,908 
Other current assets  595   595   9,220   595 
Total current assets  1,544   1,679   23,313   41,503 
Intangible asset, net of amortization     150 
Property and equipment, net of depreciation  1,900   - 
Intangible assets, net of amortization  47,500   - 
Total Assets $1,544  $1,829  $72,713  $41,503 
                
Liabilities and Stockholders’ (Deficit)                
Current liabilities:                
Accounts payable $199,579  $124,620  $502,818  $245,133 
Accrued salaries - officers  844,154   601,154 
Accrued interest  10,375    
Accrued salaries  116,250   348,800 
Accrued interest and dividends  37,435   20,397 
Notes payable  28,000   20,000   10,986   33,000 
Notes payable – related party  17,885   17,585 
Notes payable to related party  17,885   17,885 
Advances due to related party  10,974   7,675   10,900   10,974 
Convertible note payable net of discounts  35,005    
Derivative liability  44,060    
Total current liabilities  1,190,032   771,034   696,274   676,189 
Long term convertible notes payable, net of debt discount  151,395   34,065 
Derivative liability on long term convertible notes payable  1,602,309   42,104 
Total liabilities  2,449,978   752,358 
        
Commitments and contingencies      
                
Stockholders’ (Deficit)                
        
Preferred stock, $.001 par value, 10,000,000 authorized, none issued or outstanding      
Common stock, $0.001 par value, 500,000,000 shares authorized, 95,232,464 and 87,704,686 shares issued and outstanding, respectively  95,232   87,704 
Preferred stock, $0.001 par value, 10,000,000 shares authorized        
Series A, 1 share designated; no shares issued or outstanding as of September 30, 2019 and December 31, 2018  -   - 
Series B, 1,500,000 shares designated; 100,000 and no shares issued and outstanding as of September 30, 2019 and December 31, 2018, respectively  38,633   - 
Series C, 129,559 shares designated; 129,559 and no shares issued and outstanding as of September 30, 2019 and December 31, 2018, respectively  129,559   - 
Common stock, $0.001 par value,1,000,000,000 shares authorized, 165,504,936 and 121,984,192 shares issued and outstanding, as of September 30, 2019 and December 31, 2018 , respectively  165,505   121,984 
Additional paid in capital  2,643,163   2,579,489   5,423,528   3,242,449 
Deferred officer compensation  (244,043)  (391,010)  (42,410)  (195,054)
Accumulated (deficit)  (3,682,841)  (3,045,388)  (8,092,081)  (3,880,234)
Total stockholders’ (deficit)  (1,188,488)  (769,205)  (2,377,265)  (710,855)
Total Liabilities and Stockholders’ (Deficit) $1,544  $1,829  $72,713  $41,503 

 

See the accompanying notes to the unaudited condensed consolidated financial statements


LifeApps Brands

LGBTQ Loyalty Holdings, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

 

  For the Three Months Ended
September 30,
  For the Nine Months Ended
September 30,
 
  2018  2017  2018  2017 
Revenue $525   787   2,119   3,093 
Cost of revenue           49 
Gross profit (loss)  525   787   2,119   3,044 
Operating expenses:                
General and administrative  218,988   47,726   564,824   171,816 
Depreciation and amortization     225   150   675 
Total operating expenses  218,988   47,951   564,974   172,491 
(Loss) from operations  (218,463)  (47,164)  (562,855)  (169,447)
     Interest expense  (68,748)     (107,692)   
     Change in derivative liability  28,593      33,095    
Net (loss) before income taxes  (258,619)  47,164)  (637,453)  (169,447)
Provision for income taxes            
Net (loss) $(258,619) $(47,164) $(637,453) $(169,447)
                 
Per share information - basic and fully diluted:                
Weighted average shares outstanding  92,561,268   25,311,186   91,208,732   25,311,186 
                 
Net (loss) per share $(0.00)* $(0.00)* $(0.01) $(0.01)

  Three Months Ended  Nine Months Ended 
  September 30,  September 30, 
  2019  2018  2019  2018 
             
Revenue $748  $525  $2,812  $2,119 
Cost of revenue  -   -   -   - 
Gross profit  748   525   2,812   2,119 
                 
Operating expenses:                
General and administrative  681,911   218,988   2,308,536   564,824 
Depreciation and amortization  100   -   100   150 
Total operating expenses  682,011   218,988   2,308,636   564,974 
                 
Operating loss  (681,263)  (218,463)  (2,305,824)  (562,855)
                 
Other (income) expense:                
Interest expense  199,170   68,748   1,384,782   107,692 
Change in derivative liability  225,593   (28,592)  492,401   (33,094)
Total other (income) expense  424,763   40,156   1,877,183   74,598 
                 
Net loss $(1,106,026) $(258,619) $(4,183,007) $(637,453)
                 
Per share information - basic:                
Weighted average common shares outstanding  163,569,530   92,561,268   234,277,621   91,208,732 
Net loss per share – basic and diluted $(0.01) $(0.00) $(0.02) $(0.01)

 

* Denotes a lossSee the accompanying notes to the unaudited condensed consolidated financial statements

LGBTQ Loyalty Holdings, Inc.

Condensed Consolidated Statements of less than $(0.01) per share.Cash Flows

  Nine Months Ended
September 30,
 
  

2019
  2018 
Net cash flows used in operating activities $(846,796) $(53,734)
         
Cash flow from investing activities:        
Purchase of property and equipment  (2,000)  - 
Investment in intangible assets  (47,500)  - 
Net Cash used in investing activities  (49,500)  - 
         
Cash flow from financing activities:        
Proceeds from issuance of convertible notes  700,000   32,000 
Proceeds from issuance of convertible preferred stock  125,000   - 
Proceeds from exercise of warrants  51,569   - 
Proceeds from note payable  -   10,000 
Proceeds from sale of common stock  -   10,000 
Shareholder advances (repayments)  (74)  3,599 
Repayment of note payable  (7,014)  (2,000)
Net cash provided by financing activities  869,481   53,599 
         
Net (decrease) increase in cash  (26,815)  (135)
Cash at beginning of period  40,908   1,084 
Cash at end of period $14,093  $949 
         
Supplemental disclosure of cash flow information:        
Cash paid for interest $-  $- 
Cash paid for income taxes $-  $- 
         
Non-cash investing and financing activities        
Stock issued for services $562,900  $44,100 
Officer salary accrual $81,000  $243,000 
Stock issued for debt conversion $-  $10,375 

See the accompanying notes to the unaudited condensed consolidated financial statements

LGBTQ Loyalty Holdings, Inc.

CondensedConsolidated Statement of Stockholders’ Deficit

For the Period Ended September 30, 2019

(Unaudited)

  Preferred Stock        Additional          
  Series A  Series B  Series C  Common Stock  Paid in  Deferred  Accumulated    
  Shares  Amount  Shares  Amount  Shares  Amount  Shares  Amount  Capital  Compensation  Deficit  Total 
                                     
Balance December 31, 2018                       121,984,192  $121,984  $3,242,449  $(195,054) $(3,880,234) $(710,855)
                                                 
Amortization of deferred compensation                                   66,018       66,018 
Stock issued for services                       250,000   250   7,250           7,500 
Exercise of stock options                            500,000   500   4,500           5,000 
Maxim Partners - Merger  1  $-                  129,558,574   129,559   259,116           388,675 
Conversion of preferred stock  -1   -                                        
Stock issued to directors                        3,000,000   3,000   310,600           313,600 
Related party debt conversions                        8,600,298   8,600   339,712           348,312 
Loan conversion                        26,398,734   26,399   735,961           762,360 
Loss for the period                                        (1,716,168)  (1,716,168)
Balance March 31, 2019  -   -   -            290,291,798   290,291   4,899,588   (129,036)  (5,596,402)  (535,558)
                                                
Issuance of Series B preferred stock, net of discount        125,000  $35,389                   89,611           125,000 
Amortization of preferred stock discount            11,201                           (11,201)  - 
Amortization of deferred compensation                                    43,313       43,313 
Stock issued for services                        2,000,000   2,000   239,800           241,800 
Loan conversion                        187,500   188   14,813           15,000 
Maxim Exchange Agreement                129,559  $129,559   (129,558,574)  (129,559)  -           - 
Loss for the period                                        (1,360,813)  (1,360,813)
Balance June 30, 2019  -  $-   125,000  $46,590   129,559  $129,559   162,920,724   162,921   5,243,811   (85,723)  (6,968,415)  (1,471,257)
                                                 
Conversion of Series B preferred stock         (25,000) $(9,658)          734,918   735   8,923           - 
Amortization and revaluation of preferred stock discount             1,701                   7,600       (9,301)  - 
Issuance of Series B dividend shares                         16,794   17   1,421           1,438 
Amortization of deferred compensation                                     43,313       43,313 
Dividends on preferred stock                                         (8,338)  (8,338)
Debenture conversions                         427,500   427   45,620           46,047 
Exercise of common stock warrants                         1,405,000   1,405   116,155           117,560 
                                                
Loss for the period                                         (1,106,026)  (1,106,026)
Balance September 30, 2019  -  $-   100,000  $38,633   129,559  $129,559   165,504,936  $165,505  $5,423,528  $(42,410) $(8,092,081) (2,377,265)
                                                 
For the Period Ended September 30, 2018 (Unaudited)
Balance December 31, 2017                    87,704,686  $87,704  $2,579,489  $(391,010) $(3,045,388) $(769,205)
Amortization of deferred compensation                                48,990       48,990 
Stock issued for services                    3,000,000   3,000   41,100           44,100 
Loss for the period                                    (225,449)  (225,449)
Balance March 31, 2018  -   -   -   -   -   -   90,704,686   90,704   2,620,589   (342,020)  (3,270,837)  (901,564)
                                           
Amortization of deferred compensation                                48,990       48,990 
Loss for the period                                    (153,385)  (153,385)
Balance June 30, 2018  -   -   -   -   -   -   90,704,686   90,704   2,620,589   (293,030)  (3,424,222)  (1,005,959)
Amortization of deferred compensation                                48,986       48,986 
Stock issued for cash                    2,000,000   2,000   8,000           10,000 
Stock issued for services                    750,000   750   5,977           6,727 
Loan conversion                    1,777,778   1,778   8,597           10,375 
Loss for the period                    -               (258,619)  (258,619)
Balance September 30, 2018  -   -   -   -   -   -   95,232,464  $95,232  $2,643,163  $(244,044) $(3,682,841) $(1,188,490)

 

See the accompanying notes to the unaudited condensed consolidated financial statements


LGBTQ Loyalty Holdings, Inc.

(formerly LifeApps Brands Inc.

)

Condensed Consolidated Statements of Cash Flows

(Unaudited)

  For the Nine Months Ended
  September 30,
  2018  2017 
Net cash used in operations $(53,734) $(48,616)
         
Cash flow from financing activities      
         
Cash flow from financing activities:        
Proceeds from convertible note payable  32,000    
Proceeds from note payable  10,000    
Proceeds from sale of common stock  10,000    
Repayment of note payable  (2,000)   
Shareholder advances  3,599   49,310 
Repayment of shareholder advances     (800)
Net cash provided by financing activities  53,599   48,510 
         
Net (decrease) in cash  (135)  (106)
Cash at beginning of period  1,084   1,388 
Cash at end of period $949  $1,282 
         
Non-cash financing activities:        
Stock issued for services $44,100  $7,312 
Stock issued for debt conversion $10,375  $ 
Officer salary accrual $243,000  $112,500 

See the accompanying notes to the unaudited condensed consolidated financial statements


LifeApps Brands Inc.

Notes to Condensed Consolidated Financial Statements

September 30, 20182019 and 20172018

(Unaudited)

 

Note 1. Nature of Business

 

Throughout this report, the terms “our,” “we,” “us,” and the “Company” refer to LGBTQ Loyalty Holdings, Inc., (formerly LifeApps Brands Inc.,) including its subsidiaries. The accompanying unaudited condensed consolidated financial statements of LifeApps BrandsLGBTQ Loyalty Holdings, Inc. at and for the periods ended September 30, 20182019 and 20172018 have been prepared in accordance with generally accepted accounting principles (“GAAP”) for interim financial statements, instructions to Form 10-Q, and Regulation S-X. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in our annual report on Form 10-K for the year ended December 31, 2017.2018. In management’s opinion, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation to make our financial statements not misleading have been included. The results of operations for the periods ended September 30, 20182019 and 20172018 presented are not necessarily indicative of the results to be expected for the full year. The December 31, 20172018 condensed consolidated balance sheet has been derived from our audited financial statements included in our annual report on Form 10-K for the year ended December 31, 2017.2018.

 

Through our wholly owned subsidiary LifeApps, Inc.,On January 25, 2019, we acquired LGBT Loyalty LLC, a New York limited liability company, with the goal of creating a LGBTQ Loyalty Preference Index (the “Index”) to provide the LGBTQ community with the power to influence the allocation of capital within the Index based upon their consumer preferences. The Index is intended to link the economic power of the LGBTQ community with many of the top companies that support and market their products to the LGBTQ demographic. We also plan to create ancillary businesses that are a licensed developerintended to complement and publishersupport the Index including LGBTQ Loyalty Sponsorship which will be established to promote the Index along with the companies from around the world that desire to market and advertise directly to LGBTQ consumers. We intend to join forces with some of apps for the Apple Apps Store for iPhone, iPod touch, iPadmost recognizable LGBTQ community leaders from around the world and iPad mini. We are also a licensed developer on both Google Playhave them become LGBTQ Loyalty Sponsorship members. The LGBTQ Loyalty Sponsorship is expected to incorporate marketing and Amazon Appstore for Android. We have distributed apps on all three platforms.support of the companies included in the Index. All companies will be offered the opportunity to purchase LGBTQ Loyalty Sponsorship packages.

 

Moving forwardOn October 30, 2019, we launched the LGBTQ100 ESG Index, which references LGBTQ community survey data in the methodology for a benchmark listing of the nation’s highest financially performing companies that our respondents believe are developingmost committed to advancing equality.

We also plan to develop a digital media network specializingthat will specialize in targeting highly sought-after niche demographic audiences. The company willIn that regard, we intend to focus on two core businesses, an LGBT AdLGBTQ Advertising Network and an LGBT DigitalLGBTQ Media Network. Through our digital platform, we willexpect to aggregate content from around the world. We willalso intend to create original content along with sponsored content in a 24/7 digital network. The LGBT AdLGBTQ Advertising Network willis intended to assist brands in global targeting of the LGBTLGBTQ demographic. The AdLGBTQ Advertising Network willis expected to provide advertisers and brands with over 300 mainstream digital platforms and a “bullseye” onaccess to this loyal, affluent and ever-expanding audience. We willintend to deliver to our audience with a relevant sponsored content marketing message across all spectrums of digitally connected devices. Our uniqueWe believe that our value proposition to our audience and sponsors iswill be the ability to deliver aggregated and original content, with emphasis on interactive content and captive video.

LGBTQ Loyalty Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

September 30, 2019 and 2018

(Unaudited)

 

Note 2. Summary of Significant Accounting Policies

 

Going Concern

 

The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with generally accepted accounting principles (“GAAP”),GAAP, which contemplates our continuation as a going concern. We have incurred losses to date of $3,682,841$8,092,081 and have negative working capital.capital of $672,961. To date we have funded our operations through advances from related parties, issuanceissuances of convertible debt, and the sale of our common and preferred stock. We intend to raise additional funding through third party equity or debt financing. There is no certainty that funding will be available as needed. These factors raise substantial doubt about our ability to continue operating as a going concern. Our ability to continue our operations as a going concern, realize the carrying value of our assets, and discharge our liabilities in the normal course of business is dependent upon our ability to raise capital sufficient to fund our commitments and ongoing losses, and ultimately generate profitable operations. The accompanying unaudited condensed consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

 

Principles of Consolidation

 

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and our wholly owned subsidiaries, LGBTQ Loyalty, LLC, LifeApps Inc. and, Sports One Group Inc. and Loyalty Preference Index, Inc. (“LPI”), which was formed on July 24, 2019. All material inter-company transactions and balances have been eliminated in consolidation.

7

LifeApps Brands Inc.

Notes to Condensed Consolidated Financial Statements

September 30, 2018 and 2017

(Unaudited)

Use of Estimates

The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheets and revenues and expenses during the years reported. Actual results may differ from these estimates.

7

LGBTQ Loyalty Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

September 30, 2019 and 2018

(Unaudited)

 

Fair Value Measurements:Derivative Liabilities

 

ASC Topic 820, Fair Value MeasurementsThe Company has financial instruments that are considered derivatives or contain embedded features subject to derivative accounting. Embedded derivatives are valued separately from the host instrument and Disclosures (“ASC 820”), provides a comprehensive framework for measuringare recognized as derivative liabilities in the Company’s balance sheet. The Company measures these instruments at their estimated fair value and expands disclosures which are required aboutrecognizes changes in their estimated fair value measurements. Specifically, ASC 820 sets forthin results of operations during the period of change. The Company has a definition of fair value and establishes a hierarchy prioritizing the inputs to valuation techniques, giving the highest priority to quoted prices in active markets for identical assets and liabilities and the lowest priority to unobservable value inputs. ASC 820 defines the hierarchy as follows:

Level 1 – Quoted prices are available in active markets for identical assets or liabilities as of the reported date. The types of assets and liabilities included in Level 1 are highly liquid and actively tradedsequencing policy regarding share settlement wherein instruments with quoted prices,a fixed conversion price or floor would be settled first, and interest payable in shares settle next. Thereafter, share settlement order is based on instrument issuance date – earlier dated instruments settling before later dated. The sequencing policy also considers contingently issuable additional shares, such as equities listedthose issuable upon a stock split, to have an issuance date to coincide with the event giving rise to the additional shares. The policy includes all shares issuable pursuant to debenture and preferred stock instruments as well as shares issuable under service and employment contracts and interest on the New York Stock Exchange.

Level 2 – Pricing inputs are other than quoted prices in active markets, but are either directly or indirectly observable as of the reported date. The types of assets and liabilities in Level 2 are typically either comparable to actively traded securities or contracts, or priced with models using highly observable inputs.

Level 3 – Significant inputs to pricing that are unobservable as of the reporting date. The types of assets and liabilities included in Level 3 are those with inputs requiring significant management judgment or estimation, such as complex and subjective models and forecasts used to determine the fair value of financial transmission rights.

Our financial instruments consist of cash, short-term trade receivables, prepaid expenses, payables, accruals and convertible notes payable. The carrying values of cash and cash equivalents, short-term trade receivables, prepaid expenses, payables, and accruals approximate fair value because of the short-term maturities of these instruments. The fair value of notes payable approximated to their carrying value as generally their interest rates reflected our effective annual borrowing rate.short term loans.

 

Intangibles

Intangibles, which include websites and databases acquired, internet domain name costs, and customer lists, are being amortized over the expected useful lives which we estimate to be three to five years. In accordance with Financial Accounting Standards Board (“FASB”), Accounting Standards Codification (“ASC”)ASC Topic 350Intangibles – Goodwill and Other (“ASC 350”), the costs to obtain and register internet domain names were capitalized.


LifeApps Brands Inc. We expended $10,000 and $0 for website development for the three months ended September 30, 2019 and 2018, respectively and $47,500 and $0 for the nine months ended September 30, 2019 and 2018, respectively. Amortization of these costs will begin when the website becomes active.

LGBTQ Loyalty Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

September 30, 20182019 and 20172018

(Unaudited)

Derivative Financial Instruments:

We do not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks. We evaluate all of our financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments, we used a Black-Scholes valuation model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the balance sheet as current or non-current based on whether net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date.

 

Revenue Recognition

ASC Topic606, “Revenue from Contracts with Customers” establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts to provide goods or services to customers.

 

Revenues are recognized when control of the promised goods or services are transferred to a customer, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements:

 

identify the contract with a customer;
 
identify the performance obligations in the contract;
 
determinethe transaction price;
 
allocate the transaction price to performance obligations in the contract; and
 
recognize revenue as the performance obligation is satisfied.

 

Revenue is currentlywas derived primarily from the sale of sports and fitness apparel and equipment, and software applications designed for use on mobile devices such as smart phones and tablets.

We sell our software directly via Internet download through third party agents. We recognize revenue when payment is received from the agent. Payment is received net of commission paid to the agent, usually 70% to us and 30% to the agent. We record the net amount received as revenue.

We plan to publish and sell digital magazines through the internet. Magazines can be purchased as individual volumes or as a subscription. To date we have not had any subscription sales.equipment.

 

Cost of RevenueWebsite and software development costs

CostWebsite and software costs are eligible for capitalization under ASC 350-50 and ASC 985-20, Software-Costs of revenue includesSoftware to be Sold, Leased or Marketed. We expended $10,000 and $0 for website development for the costthree months ended September 30, 2019 and 2018, respectively and $47,500 and $0 for the nine months ended September 30, 2019 and 2018, respectively. Amortization of amounts paid for articles, photography, editorial and production cost ofthese costs will begin when the magazine and ongoing web hosting costs. Cost of revenue related to product sales includes the direct cost of those products sold.website becomes active.

 

Rent Expense

We recognize rent expense on a straight-line basis over the reasonably assured lease term as defined in ASC Topic 840,842, Leases (“ASC 840”842”). Our lease is short term and will be renewedmembership agreement for shared office space expires on a month to month basis.May 31, 2020. Rent expense was $0$13,671 and $363$0 for the three months ended September 30, 20182019 and 2017,2018, respectively and $255$17,894 and $3,975$255 for the nine months ended September 30, 2019 and 2018, and 2017, respectively. We adopted ASC 842 on its effective date of January 1, 2019. The adoption did not have any effect on our condensed consolidated financial statements.

 

9

LifeApps BrandsLGBTQ Loyalty Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

September 30, 20182019 and 20172018

(Unaudited)

Stock-Based Compensation

Stock-based compensation is presented in accordance with the guidance of ASC Topic 718,Compensation – Stock Compensation (“ASC 718”). Under the provisions of ASC 718, companies are required to estimate the fair value of share-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods in our consolidated statements of operations.

 

Earnings per share

We calculate earnings per share in accordance with ASC Topic 260Earnings Per Share, which requires a dual presentation of basic and diluted earnings per share. Basic earnings per share are computed using the weighted average number of shares outstanding during the fiscal year. Diluted earnings per share represent basic earnings per share adjusted to include the potentially dilutive effect of outstanding stock options and warrants. The diluted earnings per share were not calculated because we recorded net losses for the periods ended September 30, 20182019 and 2017,2018, and the outstanding stock options and warrants are anti-dilutive.

Weighted average shares outstanding would have increased by approximately 2,893,0007,717,000 and 11,065,0003,098,000 for the periodsnine months ended September 30, 2019 and 2018, respectively, and 20177,252,000 and 2,885,000 for the three months ended September 30, 2019 and 2018, respectively, on a fully diluted basis.

 

Recent Pronouncements

From time to time, new accounting pronouncements are issued that we adopt as of the specified effective date. We believe that the impact of recently issued standards that are not yet effective may have an impact on our results of operations and financial position.

In February 2016, the FASB issued ASU No. 2016-02,Leases, to improve financial reporting about leasing transactions. This ASU will require organizations that lease assets (“lessees”) to recognize a lease liability and a right-of-use asset on its balance sheet for all leases with terms of more than twelve months. A lease liability is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis and a right-of-use asset represents the lessee’s right to use, or control use of, a specified asset for the lease term. The amendments in this ASU simplify the accounting for sale and leaseback transactions primarily because lessees must recognize lease assets and lease liabilities. This ASU leaves the accounting for the organizations that own the assets leased to the lessee (“lessor”) largely unchanged except for targeted improvements to align it with the lessee accounting model and Topic 606, Revenue from Contracts with Customers.

The amendments in ASU 2016-02 are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Lessees (for capital and operating leases) and lessors (for sales-type, direct financing, and operating leases) must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. Lessees and lessors may not apply a full retrospective transition approach. The Company is evaluating the potential impact of ASU 2016-02 on its Consolidated Financial Statements.


LifeApps Brands Inc.

Notes to Condensed Consolidated Financial Statements

September 30, 2018 and 2017

(Unaudited)

 

Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company’s consolidated financial statements upon adoption.

 

Note 3. Related Party Transactions – Officer, Director and Shareholder Advances

 

Parties, which can be a corporation or an individual, are considered to be related if we have the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Companies are also considered to be related if they are subject to common control or common significant influence.

AdvancesAmounts due to related partiesparty represent cash advances, salary accruals, notes payable, and amounts paid on our behalf by an officer, director and shareholders of the Company. TheseThe cash advances are non-interest bearing, short term in nature and due on demand. The balance of our cash advances atSeptember30, 20182019 and December 31, 20172018 was $10,900 and $10,974, respectively. Salary accruals as of September 30, 2019 and $7,675,December 31, 2018 amounted to $116,250 and $348,800, respectively. Payments of accrued salaries for the three-month periods ended September 30, 2019 and 2018 amounted to $82,500 and $0, respectively. Payments of accrued salaries for the nine-month periods ended September 30, 2019 and 2018 amounted to $162,750 and $0, respectively.

Notes payable to related parties atSeptember30, 20182019 and December 31, 20172018 totaled $17,885 and $17,585, respectively with a 2% annual interest rate. Currently the companyCompany has defaulted on all of their related party loan obligations. Forbearance has been granted by the related parties on all loans. Salary accruals for the three-month periods endedSeptember30, 2018 and 2017 amounted to $81,000 and $37,500 respectively. Salary accruals for thenine-month periods endedSeptember30, 2018 and 2017 amounted to $243,000 and $112,500, respectively. Net cash advances to the Company amounted to $3,599$0 and $48,510,$3,029, respectively, for the periods endedSeptember30, 20182019 and 2017.  Total unpaid2018.

During the nine months ended September 30, 2019 we began the accrual of director’s fees for five individuals at the rate of $25,000 per annum. Four of the directors have agreed to receive their fee payments in shares of the Company’s common stock with the number of shares to be issued based on the 5-day average trading price of the stock at the end of each month. During the three and nine months ended September 30, 2019 we accrued salary was $844,154an aggregate of $31,250 and $601,154 as$68,750, respectively, for director fees. As ofSeptember30, 20182019, an aggregate of 649,080 shares of our common stock are issuable pursuant to the director compensation agreements.

On March 21, 2019 all parties to the employment and service agreements converted amounts due thereunder at December 31, 2017, respectively.2018 into 8,600,298 shares of common stock.

 

On December 19, 2017 we entered into an Employment Services Agreements with our Chief Executive Officer and our President and an Executive Management Consulting Agreement with our former Chief Executive Officer. The Agreements have a two-year term and are subject to automatic renewal for successive periods of one year unless either we or the counterparties give the other written notice of intention to not renew at least 30 days prior to the end of the existing term. The AgreementAgreements with our current and former Chief Executive Officers provide for base compensation of $150,000 and$150,000. We also have a separate Agreement with our President that provides for a base annual salary of $24,000 for our President.$24,000. The compensation payments are payable in bi-weekly installments. In the event any of the payments are not made within 30 days of the due date, they will accrue interest at the rate of 10% per annum.

11

LifeApps BrandsLGBTQ Loyalty Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

September 30, 20182019 and 20172018

(Unaudited)

 

TheEach of the foregoing Agreements contain customary termination provisions including terminations with or without cause, for good reason or voluntarily, non-competition and non-solicitation provisions, and an inventions and patents provision which provides that all the work produced by the counterparties, which is created, designed, conceived or developed by them in the course of their employment under the Agreements belong to us. Effective as of January 1, 2018, the agreementsAgreements were modified to remove the conversion right provisions. On February 15, 2019 the Executive Management Consulting Agreement with our former Chief Executive Officer was terminated by mutual agreement.

 

During the three and nine month periodsmonths ended September 30, 2019 and 2018 we recorded interest accruals of $694 and $5,736, and $7,976respectively, related to the agreements.contracts. During the nine months ended September 30, 2019 and 2018 we recorded interest accruals of $7,179 and $7,976, respectively, related to the contracts.

 

Note 4.Note Notes Payable

 

Notes payable to two unrelated third parties amounted to $28,000$10,986 atSeptember30, 20182019 and $20,000 to a single unrelated third party$33,000 at December 31, 20172018 with an interest rates of 2% and 7% per annum. One of the notesannum, respectively. The note in the amount of $18,000$10,986 at September 30, 20182019 is past due and is, therefore, in default. The other notenotes were issued in August and December of 2018 aggregating $15,000. On March 7, 2019, the amountlender agreed to convert the $15,000 in loan principal into shares of $10,000 provides for theour common stock at a conversion price of $0.08 per share resulting in an issuance of 775,000187,500 shares of common stock as additionalduring the quarter ended June 30, 2019. The lender also agreed to waive all interest due at maturity.on the loans. During the nine months ended September 30, 2019, the Company repaid $7,014 pertaining to these notes.

 

Note 5. Convertible Note Payable

 

On March 6, 2018, we executed a Promissory Note (the “2018 Note”) to an unrelated entity and received an aggregate of $32,000. The 2018 Note has an initial term of one year and provides for an original issue discount of $3,000, which is being amortized over the initial term. The note2018 Note carries a face interest ratesrate of 12% per annum. The Lender haslender had the right, at any time and/or after 180 days at their election to convert all or part of the outstanding and unpaid principal and accrued interest into shares of our common stock. The conversion price iswas 58% of a two-day average of the lowest trading price in the 15 range of 15 trading days prior to the conversion. The Notes provide2018 Note provided for additional penalties if we cannotcould not deliver the underlying common stock on a timely basis.

 

We evaluated the terms of the conversion features of the convertible note in accordance with ASC Topic No. 815 - 40, Derivatives and Hedging - Contracts in Entity’s Own Stock and determined it is indexed to the Company’s common stock and that the conversion features meet the definition of a liability and therefore bifurcated the conversion feature and accounted for it as a separate derivative liability.

We valued the conversion feature at origination of the Note at $55,118 using the Black Scholes valuation model with the following assumptions: dividend yield of zero, 1 yearLGBTQ Loyalty Holdings, Inc.

Notes to maturity, risk free interest rate of 3.03%Condensed Consolidated Financial Statements

September 30, 2019 and annualized volatility of 298.79%. $32,000 of the value assigned to the derivative liability was recognized as a debt discount on the convertible debenture. The debt discount was recorded as reduction (contra-liability) to the convertible Note and is being amortized over the initial term of the convertible Note. The balance of $23,118 of the value assigned to the derivative liability was recognized as origination interest on the derivative liability and expensed on origination.2018

(Unaudited)

 

To determine the fair value of our embedded derivatives, management evaluates assumptions regarding the probability of certain future events. Other factors used to determine fair value include our period end stock price, historical stock volatility, risk free interest rate and derivative term. The fair value recorded for the derivative liability varies from period to period. This variability may result in the actual derivative liability for a period either above or below the estimates recorded on our consolidated financial statements, resulting in significant fluctuations in other income (expense) because of the corresponding non-cash gain or loss recorded.

 

During the quarter ended September 30, 2018, the companyCompany became subject to a penalty assessment of $17,500 due to a loan covenant violation. Such amount has been expensed as additional interest. Additionally, the fair value of the derivative liability associated with the penalty amounted to $29,265 and has been recorded as additional interest expense.

 

Also, during the quarter endedOn September 20, 2018, the lender exercised conversion rights pursuant to the loan agreement and converted $8,000 of the loan principal into 1,777,778 shares of common stock. The companyCompany recognized an aggregate of $10,375 of shareholder equity as a result of the conversion based of a fair value calculation at the conversion date and related adjustments to remaining loan discounts applicable to the converted loan amount.


LifeApps Brands Inc.

Notes On December 31, 2018, the lender exercised conversion rights pursuant to Condensed Consolidated Financial Statements

September 30, 2018the loan agreement and 2017

(Unaudited)converted $8,000 of the loan principal into 5,305,040 shares of common stock. The Company recognized an aggregate of $7,583 of shareholder equity as a result of the conversion based of a fair value calculation at the conversion date and related adjustments to remaining loan discounts applicable to the converted loan amount.

 

We valuevalued the derivative liability at estimated fair market value and at the end of each accounting period with theperiod. The difference in value is recognized as gain or loss.loss in the statement of operations.

During the period February 6, 2019 through and including February 11, 2019, the holder of the 2018 Note in the original principal amount of $35,000 converted the remaining $26,920 in principal and $4,255 in interest into an aggregate of 26,398,734 shares of our common stock at a conversion price of $0.0015 per share. As the result of such conversions, the 2018 Note has been repaid in full and terminated. The shares were issued in reliance on Section 4(a)(2) of the Securities Act of 1933, as amended.

Note 6. Long-term Debt

On June 4, 2019 (the “Closing Date”), we entered into and closed a Securities Purchase Agreement (the “SPA”) with Pride Partners LLC (the “Purchaser” or “Pride”), a New York limited liability company, pursuant to which for a purchase price of $500,000, the Purchaser purchased $550,000 in principal amount of a 10% Original Issue Discount Senior Convertible Debenture (the “Debenture”) due 15 months following the date of issuance and an 18 month common stock purchase warrant (the “Warrant”) exercisable for up to 6,250,000 shares (subject to adjustment thereunder) of our common stock.

LGBTQ Loyalty Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

September 30, 2019 and 2018

(Unaudited)

Subject to earlier conversion or redemption, the Debenture is due on June 4, 2020 (the “Maturity Date”). AtSeptember30, 2018 any time after June 4, 2019, the Debenture is convertible, in whole or in part, into shares of common stock (the “Conversion Shares”) at the option of the holder, at any time and from time to time (subject to a 4.99% beneficial ownership limitation). If, on the Maturity Date, the outstanding principal balance of the Debenture is $50,000 or less, the Debenture, including all accrued and unpaid interest then due thereon, is automatically convertible into common stock. Subject to adjustment, the per share conversion price for the Debenture on any conversion date is the lesser of (i) $0.1069 or (ii) 85% of the lowest single trading date volume weighted average price for our Common stock during the 5 trading days prior to the conversion date. No later than the earlier of (i) 2 trading days after our receipt of a notice of conversion and (ii) the number of trading days comprising the standard settlement period after our receipt of a notice of conversion, we are required to deliver Conversion Shares which, when permitted under applicable securities laws, will be delivered free of restrictive legends and trading restrictions. In the event that we fail to deliver Conversion Shares by the applicable delivery date, the holder may rescind such conversion until such time that the Conversion Shares are received by the holder. Our failure to timely deliver Conversion Shares subjects us to the payment of liquidated damages to the holder as well as buy-in liability under circumstances where the holder is required to purchase Common Stock in the open market in satisfaction of a sale by the holder of Conversion Shares which the holder was entitled to receive. We are required to reserve and keep available from our authorized and unissued shares of Common Stock a sufficient number of shares to cover conversions of the Debenture. The number and amount of Conversion Shares issuable upon conversion is subject to adjustment in the event of stock splits and stock dividends. The Debenture also provides for full ratchet anti-dilution price adjustments under circumstances where, during the term of the Debenture, we issue Common Stock or common stock equivalents, exclusive of certain exempt issuances, at prices below the then applicable Debenture conversion price. The Debenture further provides for adjustments in the event of certain rights offerings, pro rata distributions to shareholders and fundamental transactions. The Debenture is subject to optional redemption by us, for cash, in whole or in part, upon 20 trading days prior written notice by us but only in the event, unless waived by the holder, we satisfy certain equity conditions (as such term is defined in the Debenture) during such 20 trading day period. Penalty interest is payable by us if we fail to effect an optional redemption by the applicable optional redemption date. The Debenture subjects us to negative covenants while the Debenture is outstanding.

We evaluated the terms of the conversion features of the Debenture and the Warrant in accordance with ASC Topic No. 815 - 40, Derivatives and Hedging - Contracts in Entity’s Own Stock and determined it is indexed to the valuationCompany’s common stock and that the conversion features meet the definition of a liability and therefore bifurcated the conversion feature and accounted for it as a separate derivative liability.

To determine the fair value of our embedded derivatives, management evaluates assumptions regarding the probability of certain future events. Other factors used to determine fair value include our period end stock price, historical stock volatility, risk free interest rate and derivative term. The fair value recorded for the derivative liability varies from period to period. This variability may result in the actual derivative liability for a period either above or below the estimates recorded on our condensed consolidated financial statements, resulting in significant fluctuations in other income (expense) because of the corresponding non-cash gain or loss recorded.

We valued the conversion features at origination of the Debenture and the Warrant at $962,887 using the Black-SholesBlack Scholes valuation model with the following assumptions: dividend yield of zero, .44 years1.25 year to maturity, risk free interest rate of 2.49%2.11% and annualized volatility of 143%312.4%. We$500,000 of the value assigned to the derivative liability was recognized $26,625as a debt discount on the convertible debenture. The debt discount was recorded as reduction (contra-liability) to the convertible debenture and $34,127is being amortized over the initial term of incomethe convertible debenture.

LGBTQ Loyalty Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

September 30, 2019 and 2018

(Unaudited)

The balance of $462,887 of the value assigned to the derivative liability was recognized as origination interest on the derivative liability and expensed on origination. In accordance with the Company’s sequencing policy, shares issuable pursuant to the convertible debenture would be settled subsequent to the Company’s Series B preferred stock as described in Note 1.

On August 27, 2019, the Company entered into Amendment No. 1 to Securities Purchase Agreement, Debentures and Registration Rights Agreement (the “Amendment”) with Pride. Pursuant to the terms of the Amendment, Pride agreed to purchase an additional $220,000 in principal amount of 10% Original Issue Discount Senior Convertible Debenture for $200,000 in cash, $100,000 of which was paid at signing of the change inAmendment and the remaining $100,000 of which was paid on September 16, 2019. As a result of this additional investment, the Company amended the currently outstanding 10% Original Issue Discount Senior Convertible Debenture that was issued to Pride on June 4, 2019 to increase the face value of the debenture from $550,000 to $770,000. No additional warrants were included in the amended agreement.

We valued the conversion features of the additional Debenture at $237,149 using the Black Scholes valuation model with the following assumptions: dividend yield of zero, 1 year to maturity, risk free interest rate of 1.75% and annualized volatility of 303.7%. $200,000 of the value assigned to the derivative liability was recognized as a debt discount on the convertible debenture. The debt discount was recorded as reduction (contra-liability) to the convertible debenture and is being amortized over the remaining term of the convertible debenture. The balance of $37,149 of the value assigned to the derivative liability was recognized as origination interest on the derivative liability and expensed on origination.

During the period from August 14, 2019 to September 30, 2019 the Purchaser exercised an aggregate of 1,405,000 shares of common stock pursuant to the exercise provisions of the Warrant. The company received an aggregate of $51,569 as a result of the Warrant exercises.

During the period from July 25, 2019 to August 14, 2019 the Purchaser converted an aggregate of $21,910 of the Debenture into an aggregate of 427,500 shares of common stock. The company recognized $18,925 of interest expense related to the write-off of discounts related to the conversion amounts.

A summary of the derivative liability associated with the SPA for the three- and nine-month periods endedSeptember30, 2018. Interest expense for thenine- month period endedSeptember30, 2018 includes $52,453 of origination interest, amortization of debt discounts of $24,273 and interest accrual of $2,400.

AtSeptember30, 2018 the balance of the Note2019 is comprised of the following:as follows:

 

Face amount of Note $44,500 
Original issue discount  (1,290)
Debt discount  (8,205)
  $35,005 
  Convertible       
  Debenture  Warrant  Total 
          
Initial valuation $469,956  $492,931  $962,887 
Additional funding  237,149       237,149 
Warrant exercises      (65,991)  (65,991)
Debenture conversions  (24,137)      (24,137)
Change in derivative value  573,392   (80,991)  492,401 
Balance at September 30, 2019 $1,256,360  $345,949  $1,602,309 

LGBTQ Loyalty Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

September 30, 2019 and 2018

(Unaudited)

 

Note 6.7. Stockholders’ Equity

 

DuringCommon Stock

On January 25, 2019, we entered into and closed a securities exchange under a Securities Exchange Agreement (the “Securities Exchange Agreement”) with LGBT Loyalty LLC (“LGBT Loyalty”) and Maxim Partners, LLC (“Maxim”), pursuant to which we acquired all of thenine-month period endedSeptember30, 2018 membership interests of LGBT Loyalty, making LGBT Loyalty a wholly owned subsidiary of ours, in exchange for 120,959,996 shares (the “Shares”) of our restricted common stock and one share of our newly created Series A Convertible Preferred Stock (the “Series A Preferred Stock”). The Shares issued to Maxim represented, upon issuance, 49.99% of our then issued and outstanding shares of common stock. On March 29, 2019 an additional 8,598,578 shares were issued to Maxim for the conversion of the Series A Convertible Preferred Stock. LGBT Loyalty has no assets, liabilities nor operations at the exchange date, therefore, the value ascribed to the issued stock ($388,675) has been charged to operations as expenses of the merger.

Effective February 20, 2019 we issued an aggregate of 750,000 shares of restricted common stock to a consultant in accordance with a service contract that provided for a 250,000 share stock grant and the exercise of 500,000 stock options in exchange for the cancellation of $5,000 then outstanding accounts payable due to the consultant for prior services.

During the nine months ended September 30, 2019 we issued an aggregate of 3,000,000 shares of restricted common stock to three unrelated individuals in accordance with their appointment as directors of the Company.

Effective March 26, 2019 we issued an aggregate of 8,600,298 shares of our restricted common stock pursuant to the automatic exercise of warrants issued to two current and prior company officers on January 25, 2019. The warrants were issued in exchange for the cancellation of an aggregate of $348,312 of salary and interest accruals through December 31, 2018.

During the period ended September 30, 2019 we issued 2,000,000 shares of common stock in connection with consulting agreements with two unrelated entities. The shares were valued at the respective trading prices of our common stock on the dates the agreements were signed.

On June 26, 2019 we issued 187,500 shares of restricted common stock in connection with the conversion of notes payable as described in Note 4 above.

 

During the quarter ended September 30, 20182019 we issued an unrelated third party purchased 2,000,000aggregate of 1,832,500 shares of common stock to Pride as described in Note 6. Also during the quarter ended September 30, 2019 we issued 16,794 shares and 734,918 shares of common stock to a Series B Preferred Stock investor for $10,000 in cash at $.05accrued dividends and conversion of 25,000 shares of the Series B Preferred Stock.

Series B Convertible Preferred Stock

On April 3, 2019 we filed a Certificate of Designations, Preferences and Rights of Series B Convertible Preferred Stock with the Delaware Secretary of State to create a new class of preferred stock, $0.001 par value per share, designated Series B Convertible Preferred Stock (“Series B Preferred Stock”) and made a loanauthorized the issuance of up to the company in the amount of $10,000. The loan provided for a stock grant of 750,0001,500,000 shares of Series B Preferred Stock. The Series B Preferred Stock has no voting, liquidation or other rights other than the right to receive dividends and to convert into common stock.

 

Also,

LGBTQ Loyalty Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

September 30, 2019 and 2018

(Unaudited)

The stated value of each share of Series B Convertible Preferred Stock for purposes of conversions and dividends is $1.15 (the “Conversion/Dividend Stated Value”). The stated value of each share of Series B Convertible Preferred for purposes of redemptions is $1.35 (the “Redemption Stated Value”). On April 3, 2019 we received an aggregate of $125,000 from the issuance of 125,000 shares of the Series B Convertible Preferred Stock. Each $25,000 of the preferred stock is convertible into $28,750 worth of common stock. The discount between the $28,750 and $25,000 for each $25,000 investment has been recognized and amortized. Additionally, the Preferred Stock contains a Beneficial Conversion Feature (BCF) that has been recognized. The BCF is the difference between the conversion price and the market price at inception multiplied by the number of common shares into which the Preferred Stock is convertible. The BCF is also treated as described in Note 5,a discount on the company issued 1,777,778Preferred Stock, which is amortized over the life of the instrument. Amortization of the discount will continue through April 3, 2021 and amounted to $50,913 for the period ended September 30, 2019. Subject to earlier conversion or redemption, the Series B Preferred Stock will automatically convert into fully paid and non-accessible shares of our common stock 24 months following the date of issuance of such Series B Preferred Stock without any action or payment required on the part of the holder of the Series B Convertible Preferred Stock. Subject to a floor price limitation of $0.03 per share, the automatic conversion price to which the Conversion/Dividend Stated Value will be applied will be the lower of (i) $0.10 per share of common stock; or (ii) a 20% discount to the lowest volume weighted average price (“VWAP”) for our common stock on our principal trading market during the five (5) trading days immediately prior to the automatic conversion date.

In September 2019, a Series B investor converted 25,000 shares of Series B Preferred Stock for 734,918 shares of common stock pursuantstock. 

LGBTQ Loyalty Holdings, Inc.

Notes to a debt-to-equity conversion.Condensed Consolidated Financial Statements

September 30, 2019 and 2018

(Unaudited)

 

Additionally,Series C Convertible Preferred Stock

On June 3, 2019 we filed a Certificate of Designation of Preferences, Rights and Limitations of Series C Convertible Preferred Stock (the “Series C COD”) with the Delaware Secretary of State to create a new class of preferred stock, $0.001 par value per share, designated Series C Convertible Preferred Stock (“Series C Preferred Stock”) and authorized the issuance of up to 129,559 shares of Series C Preferred Stock. On the Closing Date, all of the 129,559 shares of Series C Preferred Stock were issued to Pride, the assignee of Maxim. On June 4, 2019 we entered into a Securities Exchange Agreement with Maxim (the “Holder”) pursuant to which the Holder exchanged 129,558,574 shares of Common Stock for 129,559 shares (the “Exchange Shares”) of our Series C Preferred Stock (the “Share Exchange”). At the request of the Holder, the Exchange Shares were issued to Holder’s assignee. The Series C Preferred Stock has no voting or other rights other than the right to receive dividends on a pari passu basis with holders of our Common Stock, the right to receive assets in the event of liquidation, dissolution or winding up on a pari passu basis with holders of our Common Stock and the right to convert into common stock. The stated value of each share of Series C Convertible Preferred for purposes of conversions is $1,000 (the “Stated Value”). 

Each share of Series C Preferred Stock is convertible, at any time and from time to time, at the option of the holder thereof, into that number of shares of Common Stock (subject in each case to a 4.99% beneficial ownership limitation) determined by dividing the Stated Value of such share of Series C Preferred Stock by the Series C Preferred Stock conversion price of $1.00 per share. Consequently, each Share of Series C Preferred Stock is presently convertible into 1,000 shares of Common Stock.

Deferred Officer Compensation

We recorded $146,966$152,644 and $141,293 of amortization of deferred officer compensation during thenine-month period endedSeptember30, 2018.

Note 7. Options

Stock based compensation expense for options for the periods ended September 30, 2019 and 2018, and 2017 amounted to $0 and $7,312.respectively. The 2019 amount includes the full amortization of the remaining balance due under the now terminated Executive Management Consulting Agreement with our former Chief Executive Officer.


LifeApps Brands Inc.

LGBTQ Loyalty Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

September 30, 20182019 and 20172018

(Unaudited)

(Unaudited)Note 8. Options and Warrants

 

The following is a summary of stock options issued pursuant to the plan:2012 Equity Incentive Plan:

 

 Options Weighted
Average
Exercise
Price
 Weighted
Average
Remaining
Contractual
Term
(in years)
 Aggregate
Intrinsic
Value
  Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term
(in years)
 Aggregate Intrinsic Value 
                 
Outstanding January 1, 2018   17,246,688  $0.0056   3.4    
Outstanding January 1, 2019  6,300,000  $0.0049   2.4        - 
Granted     $         -  $-   -   - 
Exercised     $         500,000  $0.01   -   - 
Cancelled     $         -  $-   -   - 
Outstanding September 30, 2018   17,246,688  $0.0056   2.70  $ 
Exercisable September 30, 2018   17,246,688  $0.0056   2.70  $ 
Outstanding September 30, 2019  5,800,000  $0.0045   1.7  $- 
Exercisable September 30, 2019  5,800,000  $0.0045   1.7  $- 

 

StockThere was no stock based compensation expense for options for the periods endedSeptember30, 20182019 and 2017 amounted to $0 and $7,312.2018. There will be no additional compensation expense recognized in future periods.

On January 25, 2019 we issued warrants to two Company executives in exchange for the cancellation of an aggregate of $348,312 of salary and interest accruals through December 31, 2018. The warrants were fully exercised as described in Note 7 above.

On June 4, 2019 we issued a warrant to purchase an aggregate of 6,250,000 shares of our common stock. The warrant is exercisable through December 4, 2020. The exercise price per share of Common Stock under this Warrant shall be the lesser of (i) $0.0855, or (ii) 75% of the lowest single trading day closing price during the five trading days prior to the exercise date. During the period from August 14, 2019 to September 30, 2019 the Purchaser exercised an aggregate of 1,405,000 shares of common stock pursuant to the exercise provisions of the Warrant. The company received an aggregate of $51,569 as a result of the Warrant exercises.

Note 9. Subsequent Events


LifeApps Brands Inc.Management has evaluated all activity up to November 14, 2019 and concluded that no subsequent events have occurred that would require recognition in these financial statements or disclosure in the notes to these financial statements other than the following:

LGBTQ Loyalty Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

September 30, 20182019 and 20172018

(Unaudited)

 

Note 8. Outstanding WarrantsOn October 14, 2019 the Company entered into that certain Amendment No. 2 to Securities Purchase Agreement, Debentures and Registration Rights Agreement (the “Second Amendment”) with Pride. Pursuant to the terms of Amendment. Pride agreed to purchase an additional $330,000 in principal amount of 10% Original Issue Discount Senior Convertible Debenture for $300,000 in cash, $100,000 of which was paid at signing of the Second Amendment, $100,000 will be paid on or prior to November 14, 2019, and the remaining $100,000 will be paid on or prior to December 14, 2019. As a result of this additional investment, the Company amended the currently outstanding 10% Original Issue Discount Senior Convertible Debenture that was issued to Pride on June 4, 2019 and amended on August 27, 2019 to increase the face value of the debenture from $770,000 to $1,100,000 (provided that if Pride fails to make the second $100,000 or third $100,000 payment, the face value of the debenture will be reduced by $110,000 for each missed payment). As of November 14, 2019, the Company has received $200,000 pursuant to the Amendment.

 

There were no warrants issued duringPursuant to the periods endedSeptember30, 2018 and 2017. The 400,000 previously outstanding warrants expiredterms of the Second Amendment, the shares of common stock underlying the additional $330,000 in principal amount of 10% Original Issue Discount Senior Convertible Debenture (the “Additional Underlying Shares”) are not subject to the registration rights agreement entered into between the parties on September 20, 2017.June 4, 2019, but the Company has granted certain demand registration rights to Pride in connection with the Additional Underlying Shares.

 

Note 9. Income Taxes

On December 22, 2017,Effective October 21, 2019 a Series B Preferred Stock investor notified the United States enactedCompany of intent to convert 25,000 shares of the Tax Cuts and Jobs Act (the “Act”) resulting in significant modifications to existing law.Series B Preferred Stock into common stock. The Company has completed a reviewauthorized the issuance of the accounting for the effects of the Act during the quarter ended December 31, 2017. The Company’s financial statements for the period endedSeptember30, 2018 reflect certain effects of the Act which includes a reduction in the corporate tax rate from 34% to 21% as well as other changes.

Income tax provision (benefit) for the periods endedSeptember30, 2018 and 2017, is summarized below:

  2018  2017 
Current:        
Federal $  $ 
State      
Total current      
Deferred:        
Federal (21% tax rate in 2018)  (104,600)  (19,400)
State  (27,400)  (3,100)
Total deferred  (132,000)  (22,500)
Valuation allowance  132,000   22,500 
Total provision $  $ 

The provision for income taxes differs from the amount computed by applying the statutory federal income tax rate to income before provision for income taxes.

The sources and tax effects of the differences as ofSeptember30, 2018 and 2017 are as follows:

  2018  2017 
Income tax provision at the federal statutory rate  21.0%  34.0%
State income taxes, net of federal benefit  5.5%  5.5%
Increase in valuation allowance  (26.5%)  (39.5%)
   0.0%  0.0%

Components of the net deferred income tax assets atSeptember30, 2018 and December 31, 2017 were as follows:

  2018  2017 
Net operating loss carryovers (adjusted for revised tax rate) $496,100  $364,100 
Valuation allowance  (496,100)  (364,100)
  $  $ 

In accordance with ASC 740, atSeptember30, 2018 and December 31, 2017 we determined that a valuation allowance should be recognized against deferred tax assets because, based on the weight of available evidence, it is more likely than not (i.e., greater than 50% probability) that some portion or all of the deferred tax asset will not be realized in the future. We recognized a reserve of 100% of the amounts of the deferred tax benefit in the amount of $496,100 and $364,100, respectively.


LifeApps Brands Inc.

Notes to Condensed Consolidated Financial Statements

September 30, 2018 and 2017

(Unaudited)

As ofSeptember30, 2018, we had cumulative net operating loss carry forwards of $2,236,900 which expire from 2032 through 2038.

There are open statutes of limitations for taxing authorities in federal and state jurisdictions to audit our tax returns from 2010 through the current period. Our policy is to account for income tax related interest and penalties in income tax expense in the consolidated statement of operations. There have been no income tax related interest or penalties assessed or recorded.

Note 11. Subsequent Events

On October 25, 2018 we issued 1,000,000 shares to Sterling Financial Consultants LLC for accounting, tax and advisory services. 

On December 5, 2018 we issued an aggregate of 2,750,000731,031 shares of our restricted common stock to one person pursuant to (i) an August 7, 2018 $10,000 promissory note, as amended, due on February 15, 2019 (750,000 shares) and (ii) a $10,000 Securities Purchase Agreement dated August 7, 2018 (2,000,000 shares). The shares were deemed to have been issued as of August 7, 2018.  

On December 5, 2018 we issued 10,946,688 shares of our restricted commonthe investor stock to Robert Gayman pursuant to the exercise of (i) 6,000,000 stock options at an exercise price of $0.0026 per share or an aggregate of $15,600, and (ii) 4,946,688 stock options at an exercise price of $0.01 per share or an aggregate of $49,467, the payment for which was made by making a corresponding deduction to amounts owed by us to Mr. Gayman.  conversion request.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

On December 5, 2018 Robert Gayman forgave $531,487.12 of the amount due to him by us for services rendered. On December 5, 2018 we issued 500,000 shares to our corporate counsel in consideration of its deferment, on a temporary basis, of legal fees due to it by us for services rendered.

On November 1, 2018 we entered into an Employment Services Agreement (the “Roan Agreement”) with Lawrence Roan pursuant to which Mr. Roan is serving as our Executive Director. The Roan Agreement has a 63-month term and is subject to automatic renewal for successive periods of one year unless either we or Mr. Roan gives the other written notice of intention to not renew at least 30 days prior to the end of the existing term. The Roan Agreement provides for a base annual salary of $100,000 and a two-year severance period in the event the Roan Agreement is terminated by us without cause or by Mr. Roan for good reason. Mr. Roan’s base salary payments are payable in bi-weekly installments. The Roan Agreement contains customary termination provisions including terminations with or without cause, for good reason or voluntarily, non-competition and non-solicitation provisions, and an inventions and patents provision which provides that all of the work produced by Mr. Roan, which is created, designed, conceived or developed by Mr. Roan in the course of his employment under the Roan Agreement belongs to us.

On November 1, 2018 the Management contracts for Bobby Blair and Brian Neal and the Consultant contract for Robert Gayman were amended to remove the deferred payment salary conversion feature.


ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

The following discussion should be read in conjunction with the financial information included elsewhere in this Quarterly Report on Form 10-Q (this “Quarterly Report”), including our unaudited condensed consolidated financial statements as of September 30, 2018 and September 30, 20172019 and for the three and nine months ended September 30, 20182019 and 20172018 and the related notes. References in this Management’s Discussion and Analysis of Financial Condition and Results of Operations section to “us,” “we,” “our,” and similar terms refer to LifeApps BrandsLGBTQ Loyalty Holdings, Inc., a Delaware corporation. This discussion includes forward-looking statements, as that term is defined in the federal securities laws, based upon current expectations that involve risks and uncertainties, such as plans, objectives, expectations and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors. Words such as “anticipate,” “estimate,” “plan,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “could,” and similar expressions are used to identify forward-looking statements.

 

We caution you that these statements are not guarantees of future performance or events and are subject to a number of uncertainties, risks and other influences, many of which are beyond our control, which may influence the accuracy of the statements and the projections upon which the statements are based. Factors that may affect our results include, but are not limited to, the risk factors in Item 2.01 in our Annual Report on Form 10-K for the year ended December 31, 20172018 filed with the Securities and Exchange Commission (the “SEC”) on April,20, 2018.April 16, 2019. Any one or more of these uncertainties, risks and other influences could materially affect our results of operations and whether forward-looking statements made by us ultimately prove to be accurate. Our actual results, performance and achievements could differ materially from those expressed or implied in these forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements, whether from new information, future events or otherwise.

 

Business Overview

 

LifeApps®On January 25, 2019, we entered into and closed a Securities Exchange Agreement (the “Securities Exchange Agreement”) pursuant to which LGBT Loyalty LLC (“LGBT Loyalty”) became a wholly owned subsidiary of ours. Through LGBT Loyalty, we intend to create, establish, develop, manage and fund an LGBTQ Loyalty Preference Index (the “Index”). On October 30, 2019, we launched the LGBTQ100 ESG Index through our wholly-owned subsidiary, Loyalty Preference Index, Inc., The environmental, social and governance (“ESG”) Index is the first-ever Index that references LGBTQ community survey data in the methodology for a licensed developerbenchmark listing of the nation’s highest financially performing companies that our respondents believe are most committed to advancing equality. We believe that the news marks a significant moment in time for diversity and publisherinclusion initiatives in financial markets and Corporate America as the Index is available on NYSE, Bloomberg and Thomson Reuters.

We also plan to create additional businesses that will enhance the Index, including LGBTQ Loyalty Sponsorship which we intend to establish to promote the growth of appsthe Index. We will pursue partnerships with socially conscious companies globally that seek to market and advertise directly to LGBTQ consumers. We also intend to partner with some of the most recognizable LGBTQ community leaders from around the world to have them become LGBTQ Loyalty Sponsorship members that will promote the Index. The LGBTQ Loyalty Sponsorship will incorporate marketing and support of the companies included in the Index. Companies within the Index will be given the opportunity to purchase LGBTQ Loyalty Sponsorship packages. Sponsorship packages will be tier priced starting at ten thousand dollars for a first level package and increasing to one million dollars for a gold level package. We plan to utilize the Apple App Store for iPhone, iPod touch, iPadnetworking and iPad mini. LifeApps® isrelationships of our Board of Directors to promote the LGBTQ Loyalty Sponsorship packages.

We also a licensed developer on both Google Play and Amazon Appstore for Android. LifeApps® has distributed apps/publications on all three platforms. Moving forward LifeApps willintend to focus on two complimentary businesses, an LGBTQ Advertising Network and an LGBTQ Media Network. The LGBTQ Advertising Network will offer a direct link to the development of niche demographic media networks.companies that desire to deliver a customized marketing campaign to the LGBTQ consumer. We intend to offer our expertise including our own survey data to help companies develop their targeted message in a powerful delivery network. The management team has selectedLGBTQ Media Network will aggregate content from around the LGBT marketplace as their first audienceworld in a 24/7 digital delivery format that is intended to target for the following reasons: The LGBT community has four times the buying power of Hispanics and African Americans, two times the buying power of Asian Americans and four times the buying power of millennials, and they are extremely loyal and consistent consumers. At current growth rates purchasinghighly desired spending power of the LGBT community is expected to exceed 1 trillion dollars by 2020. (Accenture) Currently the LGBT audience is fragmented across multiple sites. We will target this audience directly with community specific content, blogs, stories and video. Currently there are 19.6 million people who identify themselves as LGBT in the US. They represent 890 billion dollars of buying power in the US and 3 trillion dollars globally. (Witeck/Selig Center) Same-sex households have 23% higher median income as compared to mainstream households. (Prudential) They are 1.23 times more likely to buy brands that reflect their style and they are 1.56 times more likely to consider themselves a spender rather than a saver. (comScore) Our focus will be to aggregate the LGBT audience through a powerful database marketing platform.

LifeApps® is also expanding its revenue generating potential through the creation of new gateway digital platforms that combine e-commerce with mobile-commerce solutions to act as conduits or meeting places for users to engage in the commerce. These gateway platforms can also be utilized and distributed across the broader base of the LifeApps® suite of products.

LifeApps® will continue to explore acquisitions of companies and new technologies. In addition, the company will also explore the acquisition of consumer related products as well. Such acquisitions will be considered where the purchase can help increase our revenues or enable the Company to attain assets that will allow us to gain technological advances that would be more costly to develop than to purchase.

LifeApps® will continue a flexible approach as opportunities arise from the emergence of these rapidly evolving mobile hardware and software markets. LifeApps® will focus resources where they will be the most effective at growing the business and driving revenues. LifeApps® ability for internal development and external purchase of new technologies and companies will depend upon its ability to raise future financing.LGBTQ consumer.

 

Our Products

 

LifeAppsEffective October 30, 2019, we officially launched the LGBTQ100 ESG Index. The Index, which will be reconstituted annually, is comprised of 100 LGBTQ equality-driven companies from the nation’s top 500 publicly traded companies based on our surveys. The LGBTQ100 ESG Index will maintain industry sector grouping whereby each sector can represent up to 25% in the weighting calculation. Details on the Index composition criteria include company securities that (a) nurture and promote equality in the workplace for employees across genders and sexual orientations; (b) maintain a strong track record of loyalty and brand awareness among millions of LGBTQ community members in the United States; and,(c) possess a record of consistently strong financial performance. 

The survey provides the ESG Index with added significance for corporate and financial sectors by tapping a nationally representative respondent base of LGBTQ self-identified adults from across the United States. Adult respondents were asked about their attitudes and behaviors toward companies as well as alignment with their personal values and issues critical to the LGBTQ community.

We will attempt to grow and publicize the Index through an LGBTQ Loyalty Sponsorship program. LGBTQ Loyalty Sponsorship packages will be offered to companies that support the LGBTQ community. We also intend to create a LGBTQ Advertising Network and a LGBTQ Media Network. Our LGBTQ Loyalty Sponsorships and LGBTQ Membership Programs will be offered to all companies that express an interest in promoting their support for the LGBTQ community through marketing, hiring practices, charitable giving and other forms of support. The LGBTQ Advertising Network will deliver market specific messaging to this powerful consumer group and will be available to assist companies in tailoring their advertising for the greatest impact. The LGBTQ Media Network Platformwill attract viewers through breaking news and relevant content from the world of news, entertainment, sports, politics, travel and health and fitness. The LGBTQ Media Network will aggregate content from around the world in a 24/7 digital delivery format that is intended to target the highly desired spending power of the LGBTQ consumer. Subject to our receipt of required financing, we expect to launch our products during the fourth quarter of 2019.

Revenue

 

LifeApps will focus on two major revenue platform initiatives both currently in late stage product development. Our first priority will be to launch a global website platform that will aggregate original and outsourced content with an emphasis on interactive content and captive video.


Our second initiative will be to license technology and software in order to launch the LGBT Ad Network. The Network will provide advertising sponsors and brands with over 300 mainstream digital platforms to get their message out and hit the “bullseye” on this loyal, affluent and ever-expanding audience. We will utilize a powerful and relevant sponsored-content marketing message across all spectrums of digitally connected devices.

The combined platforms are expected to provide our audience and advertising sponsors with a highly targeted map to navigate the enormous and growing LGBT community. Our 360-degree approach includes data to pinpoint advertising and marketing campaigns designed to connect and create strategic partnerships. Our prior experience ensures educated decision-making and confidence in planning, approach, and execution of campaigns and partnerships that provide quantifiable results. The marketing content strategy campaigns are based on our expertise and insight of what drives LGBT consumer engagement disseminating relevant content to each of the vertical demographics.

Revenue

LifeApps® intendsintend to monetize and drive revenue through development of niche media networks.the LGBTQ Loyalty Preference Index. We will target LGBT consumers on mainstream websites with native content through our direct accessreceive a percentage of the revenues derived from the Index. We expect the Index to over 300 global leading cross-over entertainment and LGBT specific websites. Additionally, we will utilize mobile apps and social media platforms to provide an immense world-wide LGBT audience reach.reach the break-even point when its holdings of funds under management are approximately $40,000,000. We also intend to drive revenue through ancillary businesses that will support and be a disruptive LGBT Adsupported by the LGBTQ Loyalty Preference Index. Our LGBTQ Loyalty Sponsorships and LGBTQ Membership Programs are intended to produce revenue through direct sales of the offerings to companies who desire to be recognized as supportive of the LGBTQ community. The LGBTQ Advertising Network and an industry leader by delivering digital content campaigns across display, mobile and video inventory. Our Ad network campaign rates will start at $15,000 and range to $50,000 per month, with a forecast average of $50,000 a month per advertising sponsor in year one and growing to an average of $75,000 a month per advertising sponsor in year two.

Our LGBTLGBTQ Media Content Agency isNetwork are expected to bridgedrive revenue as a vehicle to market and advertise to the gap and help companies to better understand how to authentically and directly engage with the LGBT consumer. We will do this through our proprietary application, which incorporates original and aggregated content integrated into an LGBT audience network. The Agency range rate will start at $25,000 and increase to $150,000. We are projecting an average of $75,000 a month per advertising sponsor for the first year and accelerating to $150,000 a month per advertising sponsor in year two.highly sought-after LGBTQ consumer demographic.

 

Critical Accounting Policies and Estimates

Going Concern

 

The accompanying financial statements have been prepared in conformity with generally accepted accounting principles (“GAAP”), which contemplates our continuation as a going concern. As of September 30, 2018,2019, we have incurred accumulated losses of $3,682,841.$8,092,081 and working capital deficit of $672,961. To date we have funded our operations through advances from related parties, issuances of convertible debt, and the sale of our common and preferred stock. We intend to raise additional funding through third party equity or debt financing. There is no certainty that funding will be available as needed. These factors raise substantial doubt about our ability to continue operating as a going concern. Our ability to continue our operations as a going concern, realize the carrying value of our assets, and discharge our liabilities in the normal course of business is dependent upon our ability to raise capital sufficient to fund our commitments and ongoing losses, and ultimately generate profitable operations.

 

Use of Estimates

 

The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheets and revenues and expenses during the years reported. Actual results may differ from these estimates.

 

Fair Value Measurements: 

ASC Topic 820, Fair Value Measurements and Disclosures (“ASC 820”), provides a comprehensive framework for measuring fair value and expands disclosures which are required about fair value measurements. Specifically, ASC 820 sets forth a definition of fair value and establishes a hierarchy prioritizing the inputs to valuation techniques, giving the highest priority to quoted prices in active markets for identical assets and liabilities and the lowest priority to unobservable value inputs. ASC 820 defines the hierarchy as follows:

Level 1 – Quoted prices are available in active markets for identical assets or liabilities as of the reported date. The types of assets and liabilities included in Level 1 are highly liquid and actively traded instruments with quoted prices, such as equities listed on the New York Stock Exchange.

Level 2 – Pricing inputs are other than quoted prices in active markets but are either directly or indirectly observable as of the reported date. The types of assets and liabilities in Level 2 are typically either comparable to actively traded securities or contracts or priced with models using highly observable inputs.


Level 3 – Significant inputs to pricing that are unobservable as of the reporting date. The types of assets and liabilities included in Level 3 are those with inputs requiring significant management judgment or estimation, such as complex and subjective models and forecasts used to determine the fair value of financial transmission rights.

Our financial instruments consist of cash and cash equivalents, short-term trade receivables, prepaid expenses, payables, accruals and convertible notes payable. The carrying values of cash and cash equivalents, short-term trade receivables, prepaid expenses, payables, and accruals approximate fair value because of the short-term maturities of these instruments.

Intangibles

Intangibles, which include websites and databases acquired, internet domain name costs, and customer lists, are being amortized over the expected useful lives which we estimate to be three to five years. In accordance with Financial Accounting Standards Board (“FASB”), Accounting Standards Codification (“ASC”) Topic 350 Intangibles – Goodwill and Other (“ASC 350”), the costs to obtain and register internet domain names were capitalized.

Derivative Financial Instruments: 

We do not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks. We evaluate all of our financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments, we used a Black-Scholes valuation model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the balance sheet as current or non-current based on whether net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date.

Revenue Recognition

 

ASC Topic 606, “Revenue from Contracts with Customers” establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts to provide goods or services to customers.

Revenues are recognized when control of the promised goods or services are transferred to a customer, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements:

identify the contract with a customer;

identify the performance obligations in the contract;

determine the transaction price;

allocate the transaction price to performance obligations in the contract; and

recognize revenue as the performance obligation is satisfied.

Revenue was derived primarily from the sale of sports and fitness apparel and equipment, and software applications designed for use on mobile devices such as smart phones and tablets. Revenue is recognized only when persuasive evidence of an arrangement exists, the fee is fixed or determinable, the product or service has been delivered, and collectability is probable.

 

We sell our software directly via Internet download through third party agents. We recognize revenue when payment is received from the agent. Payment is received net of commission paid to the agent, usually 70% to us and 30% to the agent. We record the net amount received as revenue.

We also plan to publish and sell digital magazines through the internet. Magazines can be purchased as individual volumes or as a subscription. To date we have not had any subscription sales.

Cost of Revenue

Cost of revenue includes the cost of amounts paid for articles, photography, editorial and production cost of the magazine and ongoing web hosting costs. Cost of revenue related to product sales includes the direct cost of those products sold.

Equity Based Payments

Equity based payments are accounted for in accordance with ASC Topic 718, Compensation – Stock Compensation. The compensation cost is based upon fair value of the equity instrument at the date grant. The fair value has been estimated using the Black-Sholes option pricing model.

Results of Operations

 

Three and ninemonths ended September 30, 2019, compared with the three months ended September 30, 2018 compared with the three and nine months ended September 30, 2017

 

Revenues for the three and nine months ended September 30, 2019 and 2018 were $748 and 2017 were $525, and $2,119 and $787 and $3,093, respectively. Revenues for both periods were derived primarily from the sale of sports apparel and health and fitness products. These revenues are derived from a legacy business.

 

Cost of revenue normally includes our cost of products sold and amounts paid for articles, photography, editorial and production cost ofThere were no costs associated with the magazine. In the future we will incur direct cost related to revenue such as webhosting and direct cost for our customer support. For the foreseeable future we anticipate outsourcing such costs.


Cost of revenue for the quarters resulting in gross profits for the three and nine months ended September 30, 2019 and 2018 of $748 and 2017 was $- and $- and $- and $49,$525 (100%), respectively. This resulted in a gross profit for three and nine months ended September 30, 2018 and 2017 of $525 and $2,119 and $787 and $3,044, respectively. Costs were primarily the cost of products sold.

 

We had net losses of $(258,619)$1,106,026 and $(47,164) and $(637,453) and $(169,447)$258,619 for the three and nine months ended September 30, 20182019 and 2017,2018, respectively.

 

The following is a breakdown of our selling, general and administrative expenses for the three and nine months ended September 30, 20182019 and 2017:2018:

 

 Three months Ended September 30, Nine months Ended September 30, Three months Ended September 30, 
 2018  2017  Difference  2018  2017  Difference  2019  2018  Difference  % Change 
Personnel costs $85,412  $37,500  $47,912  $297,238  $112,500  $184,738  $119,608  $85,412  $34,196   40.0%
Professional fees  79,797   6,500   73,297   105,030   38,500   66,530   36,606   79,797   (43,191)  (54.1)%
Travel and entertainment  428   200   228   10,827   2,810   8,017   58,197   428   57,769   * 
Marketing expense              3,495   (3,495)
Consulting expense  52,460      52,460   147,813      147,813   336,300   52,460   283,840   541.1%
Stock related expenses     2,437   (2,437)  500   7,311   (6,811)  38,741   -   38,741   * 
Marketing and promotion  31,989   -   31,989   * 
Rent     363   (363)  255   3,975   (3,720)  13,670   -   13,670   * 
Other expenses  891   726   165   3,161   3,225   (64)  46,800   891   45,909   * 
 $218,988  $47,726  $171,262  $564,824  $171,816  $393,008  $681,911  $218,988  $462,923   211.4%

*Denotes an amount greater than 1,000%

 

Personnel costs during the threequarter ended September 30, 2019 consisted principally of $76,295 of salaries paid or accrued for our executive officers and nine months$43,313 of amortization of deferred compensation. Personnel costs during the quarter ended September 30, 2018 consisted principally of $43,500 and $130,500 of salaries accrued for our chief executive officer and president, and $41,912 and $166,738 of amortization of deferred compensation. Personnel costs during the three and nine months ended September 30, 2017 consisted of the accrual of $37,500 per quarter of executive compensation for our former president.

 

Professional fees increased from $6,500 and $38,500 for the three and nine months ended September 30, 2017decreased primarily due to $79,797 and $105,030 for the three and nine months ended September 30, 2018. The increase is a result of the timing of audit related costs and fees associated with our filings with the services provided for auditingUS Securities and legal services and additional legal services related to changes in the Company’s planned operations.Exchange Commission.

 

Travel expenses increased by $228 and $8,017 for the three and nine months ended September 30, 2018 compared to the three and nine months ended September 30, 2017 as a result of the change in our proposedcosts associated with increased business operations.activity and financing efforts.

 

Consulting expenseexpenses during the three and nine monthsquarter ended September 30, 2019 consisted principally of costs paid or accrued pursuant to development of the LGBTQ Loyalty Preference Index. Consulting expenses during the quarter ended September 30, 2018 consisted principally of $37,500 and $112,500 of costs accrued for our former chief executive officer, $7,326 and $21,978 of amortization of deferred compensation. Additionally we had $-compensation and $44,100outside contractor costs of costs associated with common stock issued in connection with consulting contracts with third parties.

Rent expense decreased by $363 and $3,720 from $363 and $3,975 for the three and nine months ended September 30, 2017 to $- and $255 for the three and nine months ended September 30, 2018. The decrease is a result of the change in our principal office location.

There was no marketing expense recorded during the three and nine months Ended September 30, 2018 due to the proposed change in our business operation.$7,633.

 

All of our other operating costs were not significant in the aggregate.

 

We had operating losses of $(218,463)$681,263 and $(562,855)$218,463 for the three months ended September 30, 2019 and 2018, respectively.

Interest expense of $199,170 is primarily related to the increase in our Convertible Debenture issued to a lender that was obtained during the quarter ended September 30, 2019 amounting to $57,149. Additionally, recorded amortization of discounts during the period amounting to $121,569.

Nine months ended September 30, 2019, compared with the nine months ended September 30, 2018 compared to $(47,164) and $(169,447)

Revenues for the three and nine months ended September 30, 2017.2019 and 2018 were $2,812 and $2,119, respectively. Revenues for both periods were derived primarily from the sale of sports apparel and health and fitness products. These revenues are derived from a legacy business.

There were no costs associated with the revenue for the quarters resulting in gross profits for the nine months ended September 30, 2019 and 2018 of $2,812 and $2,119 (100%), respectively.

We had net losses of $4,183,007 and $637,453 for the nine months ended September 30, 2019 and 2018, respectively.

The following is a breakdown of our selling, general and administrative expenses for the nine months ended September 30, 2019 and 2018:

  Nine months Ended September 30, 
  2019  2018  Difference  % Change 
Personnel costs $1,017,275  $297,238  $720,037   242.2%
Professional fees  215,967   105,030   110,937   105.6%
Travel and entertainment  88,377   10,827   77,550   716.3%
Consulting expense  413,755   147,813   265,942   179.9%
Stock related expenses  65,307   500   64,807   * 
Merger costs  388,675   -   388,675   * 
Marketing and promotion  41,739   -   41,739   * 
Rent  17,894   255   17,639   * 
Other expenses  59,547   3,161   56,386   * 
  $2,308,536  $564,824  $1,743,712   308.7%

*Denotes an amount greater than 1,000%

Personnel costs during the nine months ended September 30, 2019 consisted principally of $240,500 of salaries paid or accrued for our executive officers, $152,644 of amortization of deferred compensation and $624,150 related to the value of shares issued and accrued for director compensation. Personnel costs during the nine months ended September 30, 2018 consisted principally of $130,500 of salaries accrued for our chief executive officer and president, $166,738 of amortization of deferred compensation.

Professional fees increased primarily due to the timing of audit related costs and fees associated with the Securities Exchange Agreement with LGBT Loyalty LLC and completion of debt financing agreements.

Travel expenses increased as a result of costs associated with Securities Exchange Agreement with LGBT Loyalty LLC., increased business activity and financing agreements.

Consulting expenses during the nine months ended September 30, 2019 consisted principally of $18,750 of costs paid or accrued for our former chief executive officer, $22,705 of amortization of deferred compensation and of $226,000 costs paid or accrued pursuant to development of the LGBTQ Loyalty Preference Index. Consulting expenses during the nine months ended September 30, 2018 consisted principally of $112,500 of costs accrued for our former chief executive officer, $21,978 of amortization of deferred compensation. Additionally, we had $44,100 of costs associated with cash payments and common stock issued in connection with consulting contracts with third parties.

We incurred $388,675 of merger costs associated with the Securities Exchange Agreement with LGBT Loyalty LLC as a result of the issuance of 129,558,574 shares of our common stock.

All of our other operating costs were not significant in the aggregate.

We had operating losses of $2,305,824 and $562,855 for the nine months ended September 30, 2019 and 2018, respectively.

Interest expense includes $688,400 related to our Convertible Debenture and Warrants issued to a lender that was secured during the nine months ended September 30, 2019. Additionally, we accrued interest related to service contracts of $7,200 and $8,300 related to our Series B preferred stock. We recorded additional interest expense of $680,800 related to our convertible note payable to a third party. This note was fully converted to common stock during February 2019.

 

Interest and derivative expenses in 2018 are primarily related to a convertible note payable to a third-party lender that was secured during the quarternine months ended March 31, 2018 and interest accrued pursuantSeptember 30, 2018. The note was fully converted to employment and consulting contracts..common stock during the nine months ended September 30, 2019.

 

Liquidity and Capital Resources

 

We wereHistorically, we have been financed primarily by capital contributionsthrough advances from membersrelated parties, issuances of LifeApps LLC,convertible debt, and the predecessor to LifeApps, from short term loans, and through salessale of our securities.common and preferred stock. Our existing sources of liquidity maywill not be sufficient for us to implement our business plans. There are no assurances that we will be able to raise additional capital as and when needed. As of September 30, 2019, we had $14,093 in cash on hand. Our cash on hand as of September 30, 2019, together with the proceeds received and to be received from the Pride Second Amendment, will be sufficient to cover operating expenses and debt service requirements through December 2019.

 

As of September 30, 2018,2019, we had a working capital deficit of $1,188,488$672,961 as compared to a working capital deficit of $769,205$634,686 at December 31, 2017.2018.

 

During the nine months ended September 30, 20182019 and 2017,2018, operations used cash of $846,796 and $53,734, and $48,616, respectively.


No cash was expended for financing activities during the nine months ended September 30, 2018 and 2017.

 

During the nine months ended September 30, 20182019 we purchased $2,000 of office furniture and 2017,equipment and expended $47,500 for website development.

During the nine months ended September 30, 2019 and 2018, net cash provided by financing activities was $869,481 and $53,599, and $48,510, respectively.

We received $32,000 as$125,000 in proceeds from a convertible note payable to a third-party lenderthe issuance of Series B Convertible Preferred Stock (Note 7) and $700,000 in proceeds from the issuance of Convertible Debentures during the nine months ended September 30, 2018. Also we2019 (Note 6).  We also received an aggregate of $20,000$51,569 from the issuanceexercise of warrants. We received $42,000 in proceeds from notes payables and $10,000 from the sale of common stock and a note payable from an unrelated individual.during the nine months ended September 30, 2018.

 

Additionally, we received net amounts of $950 and $15,510$650 of cash advances from our chief executive officer and net amounts of $2,649 and $33,000$2,950 of cash advances from (aa director and shareholders)shareholders during the nine months ended September 30, 2018 and 2017, respectively.2018.

 

We will continue to seek out additional capital in the form of debt or equity under the most favorable terms we can find.

Going Concern

Our financial statements have been prepared on a going concern basis which assumes that we will be able to realize our assets and discharge our liabilities in the normal course of business for the foreseeable future. We have incurred losses since inception resulting in an accumulated deficit of approximately $3,682,841 as of September 30, 2018 and further losses are anticipated in the development of our business raising substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern is dependent upon our generating profitable operations in the future and/or obtaining the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they come due. Management intends to finance operating costs over the next twelve months with existing cash on hand and/or additional officer and shareholder advances. These financials do not include any adjustments relating to the recoverability and reclassification of recorded asset amounts, or amounts and classifications of liabilities that might result from this uncertainty.

Off-Balance Sheet Arrangements

 

We have no off-balance sheet arrangements.

 

ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

We are a smaller reporting company as defined by Rule 12b-2 of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”) and are not required to provide the information required under this item.

 

ITEM 4.CONTROLS AND PROCEDURES

ITEM 4. CONTROLS AND PROCEDURES

 

Evaluation of Disclosure Controls and Procedures

 

Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 (“Exchange Act”), the Company carried out an evaluation, with the participation of the Company’s management, including the Company’s Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) (the Company’s principal financial and accounting officer), of the effectiveness of the Company’s disclosure controls and procedures (as defined under Rule 13a-15(e) and Rule 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, the Company’s CEO and CFO concluded that the Company’s disclosure controls and procedures are not effective due to a lack of audit committee and segregation of duties caused by limited personnel to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including the Company’s CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.

 

Limitations on Effectiveness of Controls and Procedures

 

Our management, including our Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer), does not expect that our disclosure controls and procedures will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include, but are not limited to, the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.


Management believes that the material weakness set forth above did not have an effect on our financial results.

 

Changes in Internal Control over Financial Reporting

 

There have been no changes in the Company’s internal control over financial reporting during the three months ended JuneSeptember 30, 20182019 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

 

There are no pending, nor to our knowledge threatened, legal proceedings against us.

 

ITEM 1A. RISK FACTORS

 

For information regarding risk factors, please refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 20172018 filed with the SEC on April 20, 2018,16, 2019, which may be accessed via EDGAR through the Internet atwww.sec.gov.

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

On December 5, 2018 we issued an aggregateRecent Sales of 2,750,000 shares of our restricted common stock to one person pursuant to (i) an August 7, 2018 $10,000 promissory note, as amended, due on February 15, 2019 (750,000 shares) and (ii) a $10,000Unregistered Securities Purchase Agreement dated August 7, 2018 (2,000,000 shares). The shares were deemed to have been issued as of August 7, 2018.

 

On October 11, 2018 we issued 1,777,778 sharesOther than what has previously been disclosed in public filings, there are no new sales of our restricted common stock pursuant to the conversion of $8,000 is loan principal due on a March 6, 2018 promissory note. The shares were deemed to have been issued on September 20, 2018, the date on which we received a conversion notice.unregistered securities.

The foregoing issuances of shares were made on reliance on Section 4(a)(2) of the Securities Act of 1933, as amended.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

We are in default under a $20,000 Promissory Note dated May 20, 2017 promissory notethat became due on August 31, 2017 issued to an unrelated third party.2017. We have been paying back the note in monthly installments of $500entered into a payment plan with the intentionpayee thereunder wherein we are making monthly cash payments to pay it back in full when funds become available.reduce the outstanding balance due. At September 30, 20182019 the principaloutstanding balance due on the note was $18,500.approximately $10,986.

 

ITEM 4. MINE SAFETY DISCLOSURE

 

Not Applicable.

 

ITEM 5. OTHER INFORMATION

 

On December 5, 2018Effective April 25, 2019, we issued an aggregatefiled a Certificate of 2,750,000 shares of our restricted common stock to one person pursuant to (i) an August 7, 2018 $10,000 promissory note, as amended, due on February 15, 2019 (750,000 shares) and (ii) a $10,000 Securities Purchase Agreement dated August 7, 2018 (2,000,000 shares). The shares were deemed to have been issued as of August 7, 2018.

On December 5, 2018 we issued 10,946,688 shares of our restricted common stock to Robert Gayman pursuant to the exercise of (i) 6,000,000 stock options at an exercise price of $0.0026 per share or an aggregate of $15,600, and (ii) 4,946,688 stock options at an exercise price of $0.01 per share or an aggregate of $49,467, the payment for which was made by making a corresponding deduction to amounts owed by us to Mr. Gayman.

On December 5, 2018 Robert Gayman forgave $531,487.12 of the amount due to him by us for services rendered.

On December 5, 2018 we issued 500,000 sharesAmendment to our corporate counsel in considerationCertificate of its deferment, on a temporary basis, of legal fees due to it by us for services rendered.

On November 1, 2018 we entered into an Employment Services AgreementIncorporation (the “Roan Agreement”“Charter Amendment”) with Lawrence Roan pursuantthe Delaware Secretary of State to which Mr. Roan is serving aschange our Executive Director. The Roan Agreement has a 63-month term and is subjectname from LifeApps Brands Inc. to automatic renewal for successive periods of one year unless either we or Mr. Roan gives the other written notice of intention to not renew at least 30 days prior to the end of the existing term. The Roan Agreement provides for a base annual salary of $100,000 and a two-year severance period in the event the Roan Agreement is terminated by us without cause or by Mr. Roan for good reason. Mr. Roan’s base salary payments are payable in bi-weekly installments. The Roan Agreement contains customary termination provisions including terminations with or without cause, for good reason or voluntarily, non-competition and non-solicitation provisions, and an inventions and patents provision which provides that all of the work produced by Mr. Roan, which is created, designed, conceived or developed by Mr. Roan in the course of his employment under the Roan Agreement belongs to us.


On November 1, 2018 we entered into Amendment No. 2 to Robert Gayman’s Executive Management Consulting Agreement to extend the term thereof through January 31, 2023.

On November 1, 2018 we entered into Amendment No. 2 to Brian Neal’s Employment Services Agreement to extend the term thereof through January 31, 2023.

On November 1, 2018 we entered into Amendment No. 2 to Robert Blair’s Employment Services Agreement to extend the term thereof through January 31, 2023.

Effective October 25, 2018 we issued 1,000,000 shares of our restricted common stock to one person on consideration of $24,785 in accounting, tax and advisory services reliance during May 2017. LGBTQ Loyalty Holdings, Inc. Our trading symbol will remain “LFAP”.

 

ITEM 6. EXHIBITS

 

Exhibit
Number
 Description of Exhibit
10.131.1 Employment Services Agreement with Lawrence P. Roan entered into as of November 1, 2018.
31.1Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2 Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1* Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2* Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS XBRL Instance Document
101.SCH XBRL Taxonomy Extension Schema Document
101.CAL XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB XBRL Taxonomy Extension Labels Linkbase Document
101.PRE XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF XBRL Taxonomy Extension Definition Linkbase Document

 

*This certification is being furnished and shall not be deemed “filed” with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference.

* This certification is being furnished and shall not be deemed “filed” with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference.



SIGNATURES

 

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

 

 LIFEAPPS BRANDSLGBTQ LOYALTY HOLDINGS, INC.
  
December 31, 2018November14, 2019By:/s/ Robert A. Blair
  Robert A. Blair, Chief Executive Officer and

SIGNATURES

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

LGBTQ LOYALTY HOLDINGS, INC.
November 14, 2019By:/s/ Eric Sherb
Eric Sherb, Chief Financial Officer

 

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