Attached files

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EX-32.2 - EXHIBIT 32.2 - MJ BIOTECH, INC.exhibit322_ex32z2.htm
EX-31.2 - EXHIBIT 31.2 - MJ BIOTECH, INC.exhibit312_ex31z2.htm
EX-31.1 - EXHIBIT 31.1 - MJ BIOTECH, INC.exhibit311_ex31z1.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-Q




 

X

QUARTERLY REPORT UNDER TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED  JUNE 30, 2015

 

 

OR

 

¨

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

 


Commission File Number 000-54616

 

[bnbiq22015_10q001.jpg]

BullsnBears.com, Inc.

(Exact name of registrant as specified in its charter)

 



 

 

DELAWARE

45-2282672

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)



 

 

6586 W. ATLANTIC AVE. UNIT 103

DELRAY BEACH, FL

33446

(Address of principal executive offices)

(Zip Code)


 

(561) 692-2800

(Registrant's telephone number, including area code)

Not applicable

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


Indicate by check mark whether the issuer (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 last 90 days.   YES þ     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 (SS 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 þ     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.  






Large Accelerated Filer

¨

 

Accelerated Filer

¨

Non-accelerated Filer

¨

 

Smaller Reporting Company

þ


Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   YES ¨     NO þ

APPLICABLE ONLY TO CORPORATE ISSUERS:

As of October 14, 2015, there were 12,803,270 shares of the registrants $0.0001 par value common stock issued and outstanding.




1


TABLE OF CONTENTS





 

 

Page

 

PART I.  FINANCIAL INFORMATION

 

                      

 

                      

ITEM 1.

FINANCIAL STATEMENTS (unaudited)

4

 

 

 

 

Balance Sheets

4

 

Statements of Operations

5

 

Statements of Cash Flows

6

 

Notes to the Unaudited Financial Statements

7

 

 

 

ITEM 2.

MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

11

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

         14

ITEM 4.

CONTROLS AND PROCEDURES.

14

 

 

 

 

PART II.  OTHER INFORMATION

 

 

 

 

ITEM 1.

LEGAL PROCEEDINGS.

15

ITEM 1A.

RISK FACTORS.

15

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

15

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES.

16

ITEM 4.

MINE SAFETY DISCLOSURES.

16

ITEM 5.

OTHER INFORMATION.

16

ITEM 6.

EXHIBITS.

17












2


CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION


Various statements in this report contain or may contain forward-looking statements that are subject to known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These forward-looking statements were based on various factors and were derived from utilizing numerous assumptions and other factors that could cause our actual results to differ materially from those in the forward-looking statements. These factors include, but are not limited to:

·

our recent exit from shell status, lack of profitable operations and risk we will ever generate revenues or profits,

·

need for additional capital, including our ability to repay $360,000 in notes to non-related parties, a substantial portion of which are presently past due,

·

our ability to continue as a going concern,

·

the limited operating history of our business,

·

our inability to manage our growth,

·

potential infringement of third party intellectual property rights,

·

our ability to effectively compete,

·

our ability to timely and effectively scale our technology,

·

the limited trading market for our common stock which is quoted on the OTC Markets,

·

anti-takeover aspects of our certificate of incorporation and bylaws and the ability of our Board to issue preferred stock without stockholder consent,

·

the application of penny stock rules to trading in our common stock, and

·

the dilutive impact of outstanding convertible notes and warrants.


You should read thoroughly this report and the documents that we refer to herein with the understanding that our actual future results may be materially different from and/or worse than what we expect. We qualify all of our forward-looking statements by these cautionary statements including those made in Part I. Item 1A. Risk Factors appearing elsewhere in this report. Other sections of this report include additional factors which could adversely impact our business and financial performance. New risk factors emerge from time to time and it is not possible for our management to predict all risk factors, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Except for our ongoing obligations to disclose material information under the Federal securities laws, we undertake no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events. These forward-looking statements speak only as of the date of this report, and you should not rely on these statements without also considering the risks and uncertainties associated with these statements and our business.


OTHER PERTINENT INFORMATION


We maintain our web site at www.bullsnbears.com. Information on this web site is not a part of this report.


Unless specifically set forth to the contrary, when used in this report the terms BullsNBears, the Company, "we", "us", "our" and similar terms refer to BullsNBears.com, Inc., a Delaware corporation formerly known as Spicy Gourmet Manufacturing, Inc. In addition, the second quarter of 2015 refers to the three months ended June 30, 2015, the second quarter of 2014 refers to the three months ended June 30, 2014.



3


PART I - FINANCIAL INFORMATION


ITEM 1. FINANCIAL STATEMENTS.


BULLSNBEARS.COM, INC.

 Balance Sheets


Unaudited



June 30,

December 31,


2015

2014

ASSETS

 

 

CURRENT ASSETS



Cash

$

26

$

-

Other current assets

596

593

Total Current Assets

622

593




Property and equipment, net of accumulated depreciation of $19,242 and $15,553

8,077

11,767

Intangible asset, net of accumulated amortization of 81,250 and $66,250

68,750

83,750

TOTAL ASSETS

$

77,449

$

96,110




LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)



CURRENT LIABILITIES



Accounts payable

$

39,165 

 $

33,676 

Accounts payable related party

414,399 

375,799 

Note payable related party

179,296 

180,927 

Convertible notes payable - related party

21,716 

21,716 

Bridge notes Payable

17,500 

Convertible notes payable

360,000 

659,200 

Accrued interest payable

38,097 

39,643 

Accrued interest payable - related party

18,542 

12,492 

Total Current Liabilities

1,088,715 

1,323,453 




Total Liabilities

1,088,715 

1,323,453 




STOCKHOLDERS' EQUITY (DEFICIT)



Preferred stock; $0.0001 par value, 20,000,000 shares authorized, 4,000 shares issued and outstanding

Common stock; $0.0001 par value, 100,000,000 shares authorized, 12,803,270 and 12,228,650 shares issued and outstanding, respectively

1,280 

1,223 

Additional paid-in capital

1,224,241 

882,313 

Accumulated deficit

(2,236,788)

(2,110,880)

Total Stockholders' Equity (Deficit)

(1,011,266)

(1,227,343)

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

$

77,449 

$

96,110 



The accompanying notes are an integral part of these unaudited financial statements.




 

 



4



                     



 BULLSNBEARS.COM, INC.

Statements of Operation

(Unaudited)









For the Three Months endedJune 30,

For the Six Months endedJune 30,


2015

2014

2015

2014


 

 

 

 

REVENUES

$

10,000 

$

40,780 

$

12,610 

$

44,183 






OPERATING EXPENSES





Subscription content expense

1,335 

7,984 

Depreciation and amortization expense

9,344 

9,343 

18,688 

18,686 

General and administrative

47,468 

129,454 

95,043 

360,475 






Total Operating Expenses

56,812 

140,132 

113,731 

387,145 






OPERATING LOSS

(46,812)

(99,352)

(101,121)

(342,962)






OTHER INCOME (EXPENSE)





Gain on Conversion of Interest

12,160 

17,296 

Interest expense

(12,265)

(115,232)

(29,922)

(142,018)






Total Other Income (Expense)

(105)

(115,232)

(12,626)

(142,018)






NET LOSS

$

(46,917)

$

(214,584)

$

(113,747)

$

(484,980)






BASIC NET LOSS PER COMMON SHARE

$

(0.00)

$

(0.02)

$

(0.01)

$

(0.04)






BASIC WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING

12,500,007 

11,680,000 

12,384,165 

11,680,000 


The accompanying notes are an integral part of these unaudited financial statements.


 



5



 

BULLSNBEARS.COM, INC.

 Statements of Cash Flows

(unaudited)


For the


Six Months ended


June 30,


2015

2014

CASH FLOWS FROM OPERATING ACTIVITIES



Net loss

$

(113,747)

$

(484,980)

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



Depreciation and amortization

18,688 

18,686 

Gain on conversion of Interest

(17,296)

Amortization of debt discount


80,600 

Changes in operating assets and liabilities



Other assets

(3)

139 

Accounts payable and accrued liabilities

29,365 

60,043 

Accounts payable and accrued liabilities - related party

67,150 

97,076 

Net Cash Used in Operating Activities

(15,843)

(228,436)




CASH FLOWS FROM FINANCING ACTIVITIES



Proceeds  from bridge notes payable

17,500 

Proceeds  from convertible notes payable

215,000 

Proceeds from notes payable, related party

4,455 

45,075 

Payments to notes payable and convertible notes payable, related party

(6,086)

(32,468) 

Net Cash Provided by Financing Activities

15,869 

227,607 




(DECREASE) INCREASE IN CASH

26 

(829)

CASH AT BEGINNING OF PERIOD

829 

CASH AT END OF PERIOD

$

26 

$


CASH PAID FOR:



Interest

$

$

31,141 

Income Taxes

$

$




NON-CASH INVESTING AND FIANANCING TRANSACTIOAN



Convertible notes and interest - converted to common stock

$

324,620

$

--

Accounts payable related party transfer to accounts payable and settled with common stock

$

22,500

$

-

Debt Discount

$

-

$

80,600


The accompanying notes are an integral part of these unaudited financial statements.



6


 

 

 

BULLSNBEARS.COM, INC.

Notes to the Unaudited Financial Statements


1.

Nature of Operations and Continuance of Business


The unaudited interim financial statements included herein have been prepared by BullsnBears.com, Inc. (the Company) in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (the SEC). We suggest that these interim financial statements be read in conjunction with the audited financial statements and notes thereto included in our Form 10-K for the year ended December 31, 2014, as filed with the SEC. We believe that all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein and that the disclosures made are adequate to make the information not misleading. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosure contained in the audited financial statements for the most recent fiscal year as reported in Form 10-K have been omitted.



2.

Going Concern


These financial statements have been prepared on a going concern basis, which implies that the Company will continue to realize its assets and discharge its liabilities in the normal course of business. During the period from inception through June 30, 2015, the Company has generated minimal revenues and has an accumulated deficit of ($2,236,788). The continuation of the Company as a going concern is dependent upon the continued financial support from its management, its ability to generate profits from the Companys future operations identify future investment opportunities and obtain the necessary debt or equity financing. These factors raise substantial doubt regarding the Companys ability to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.


 

7

 

 

3. Related Party Transactions


Notes and Convertible Notes Payable

On October 31, 2012, the Company and an officer and director of the Company entered into a one year, 10% Senior Convertible Note for office equipment totaling $20,955 and supplies totaling $761, or a total of $21,716. The principal amount of the Senior Convertible Note can be convertible, at the sole option of the holder and in whole or in part, into shares of common stock of the Company at a conversion price to be determined by the Board of Directors of the Company. The company borrows funds from an officer and director as needed, they are unsecured and there are no defined terms of repayment at this time, the loans are to be considered Senior convertible debt.

The Senior Convertible Note and the payment of the principal thereof and interest thereon shall at all times and in all respects constitute the Senior Indebtedness of the Company and shall not be junior or subordinate in right of payment to any other indebtedness of the Company. Accrued interest on the Senior.

During the year ended December 31, 2014, the Company borrowed a total of $63,062 in unsecured short-term loans from an officer and director of the Company and repaid $2,925. At December 31, 2014 and June 30, 2015, $180,927 and $179, 296 of the short-term loans was outstanding and are accruing interest at 6% per annum.  Accrued interest on unsecured short term loans totaled $18,542 and 12,492 at June 30, 2015 and December 31, 2014, respectively

In April, 2015, an affiliate of the Company assigned an Account Payable balance in the principal amount of $22,500 to an unrelated party. The Note is due in June, 2015, and is convertible at the option of the holder into shares of Common Stock at market price. The note was converted in June of 2015 into 250,000 shares of common stock


Consulting Expense

At June 30, 2015 and December 31, 2014, the Company owes an officer $414,399 and $375,799, respectively, for consulting expense which is included in accounts payable, related party. Consulting expense for the year ended December 31, 2014 was $168,000. Consulting expenses for the three and six months ended June 30, 2015 were $24,360 and 54,860 respectively.

 

8


4.  Convertible Notes Payable

During the year ended December 31, 2013, the Company issued Convertible Promissory Notes (the Notes) for cash totaling $977,200. The Notes bear interest at 10% per annum, are unsecured and due in one year from the date of issuance. At the maturity date, the holders of the Notes have the right to convert the unpaid principal and accrued interest into shares of common stock of the Company at a price of $1.00 per share. Accrued interest on the Notes was $32,199 at December 31, 2013.

During the year ended December 31, 2014, we sold an additional $210,000 principal amount of one-year notes, bearing an interest rate of 10% per annum and convertible at any time following issuance until maturity into Shares of Common Stock of the Company at a price of $1.00 per Share.

During the year ended December 31, 2014, Convertible Promissory Notes became due and convertible at a discount to the then current market price in accordance with terms of the Notes. As a result, the Company recorded a total of $127,400 in debt discount to interest expense related to the beneficial conversion feature during the year ended December 31, 2014. At December 31, 2014, the Company had no unamortized debt discount on Convertible Promissory Notes.

In February, 2015, the Company converted an aggregate of $84,200 of principal and $ 6,420 in accrued interest on 10% convertible notes into 90,620 shares of Common Stock. The Company realized a net gain of $5,136 in interest conversion. The balance of the notes matured between January 2015 and March 2015.

In June 2015 the company converted an aggregate of $234,000 of note holder debt, $215,000 of principle and accrued interest of $19,000 into 234,000 shares.   For the same period the company realized a gain on interest of $12,160.

As of June 30, 2015, $360,000 worth of Notes have matured and have not converted into common shares.  In the event one or more of the holders should elect to convert the notes, the issuance of shares of our common stock in satisfaction of the notes will be dilutive to our current stockholders. If the notes are not converted, we will be required to satisfy the notes in cash. If Note holders do not elect to convert their debt into common stock, the Company may need to raise additional capital to retire the Notes.  We do not have sufficient cash to satisfy the presently due notes, nor the balance of these notes when they become due and there are no assurances we will be able to raise the funds if necessary.

Accrued interest on the Notes was $38,097 and $39,643 at June 30, 2015 and June 30, 2014, respectively.




9


During the three months ended June 30, 2015, the Company received proceeds of $17,500 from the issuance of three promissory bridge notes. The notes bear interest at 15% per annum, are unsecured, and are due six months from the date of issuance. At maturity the notes become convertible at $0.20 subject to certain reset provisions. In addition the notes become convertible upon an equity financing transaction of at least $500,000. At Maturity the note holders will also receive two shares of restricted common stock for every dollar loaned to the company.

5. Preferred Stock

The Company has authorized a total of 20,000,000 Shares of Preferred Stock, $.001 par value, which may be issued from time to time and bearing such rights, privileges and preferences as shall be designated by the Board of Directors.  As of December 31, 2014, the Company had issued 4,000 Shares of Preferred Stock, designated as Cumulative Preference A , at a price of $1.25 per Share.     The Shares bear an annual coupon of 5%, and are convertible into Shares of Common Stock of the Company at any time commencing one (1) year from the date of issuance at a conversion price of $1.25 per Share

During the year ended December 31, 2014, we sold $5,000 principal amount of Series A 5% Cumulative Convertible Preferred Stock, at a price of $1.25 per Share.  These Shares bear annual cumulative dividends of 5%, payable at the option of the Company in cash or Shares of Common Stock.  At the option of the holder, beginning one year from the date of issuance the Shares are  convertible into Shares of Common Stock at a price of $1.25 per Share.  

In April, 2015, the Corporation authorized the issuance of up to 10,000,000 shares of Preferred Stock to be designated Series B Preferred Stock, having a conversion right at the option of the holder beginning one year from the date of issuance, and which shall be convertible into Shares of Common stock at a Conversion Price equal to the closing market Bid price of the Corporations Common Stock on the trading date immediately preceding the date of conversion, in accordance with the Certificate of Designation attached hereto and made a part hereof.  In addition, the holder of each Share of Series B Stock shall have the equivalent voting rights of two (2) Shares of Common Stock.   No Shares of Series B Preferred Stock have been issued to date.

6. Subsequent Events

On July 24, 2015, the Company extended the expiration of its 5,000,000 issued and outstanding Common Stock Purchase Warrants by an additional two years.   All of the Warrants are exercisable at a price of $.25 per Share.


On September 30, 2015, the Company formed a new wholly-owned corporation, BullsnBears Holdings, Inc., for the purpose of holding the Companys intellectual property assets.




10


ITEM 2.

MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.


FORWARD-LOOKING STATEMENTS


This Managements Discussion and Analysis of Financial Condition and Results of Operations (MD&A) contains forward-looking statements that involve known and unknown risks, significant uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed, or implied, by those forward-looking statements.  You can identify forward-looking statements by the use of the words may, will, should, could, expects, plans, anticipates, believes, estimates, predicts, intends, potential, proposed, or continue or the negative of those terms.  These statements are only predictions. In evaluating these statements, you should consider various factors which may cause our actual results to differ materially from any forward-looking statements.  Although we believe that the exceptions reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.  Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements.  We undertake no obligation to revise or update publicly any forward-looking statements for any reason.


RESULTS OF OPERATIONS


Working Capital



June 30,

December 31,

  

2015

2014


 

 

Current Assets

 $                 622

 $                 593

Current Liabilities

          1,088,715

1,323,453

Working Capital (Deficit)

 $     (1,088,093)

 $     (1,322,860)


Cash Flows


Six months ended

June 30,

  

2015

2014


 

  

Cash Flows Used in Operating Activities

 $         (15,843)

 $          (228,434)

Cash Flows Used in Investing Activities

              -   

                        -   

Cash Flows Provided by Financing Activities

              15,869

                292,543

Net Increase (Decrease) in Cash During Period

 $                  26

 $                 (829)





11


Balance Sheet


As at June 30, 2015, the Company had total assets of $77,449 compared with total assets of $96,110 as at December 31, 2014.  The assets are mainly comprised of URL domain names and websites purchased during October 2012.


The Company had total liabilities of $1,088,715 at June 30, 2015 compared with $1,323,453 at December 31, 2014. The decrease in total liabilities is principally attributed to the conversion of debt into shares of Common Stock.


Income Statement


Revenues


Revenue decreased by $31,573 during the six month ended June 30, 2015 compared to the six months ended June 30, 2014.  The Company had minimal revenues during both periods.


Revenue decreased by $30,780 during the three months ended June 30, 2015 compared to the three months ended June 30, 2014.  The Company had minimal revenues during both periods.


Operating Expenses


During the six months ended June 30, 2015, the Company incurred operating expenses totaling $113,731 compared with $387,145 for the six months ended June 30, 2014, a decrease of approximately 71%. Due to the decrease in office personnel, sales, marketing and consulting work performed for the company during this period


During the three months ended June 30, 2015, the Company incurred operating expenses totaling $56,812 compared with $140,132 for the three months ended June 30, 2014, a decrease of approximately 50%.  The decrease in operating expenses is mainly attributed to a decrease in general and administrative expenses related to a reduction in the costs of business operations.


Total Other Income (Expense)


Interest expense decreased to $29,922 for the six month ended June 30, 2015 compared to $142,018 for the six months ended June 30, 2014Due to the conversion of notes and interest associated with the 10% convertible notes


Interest expense decreased 21% for the three month period ended June 30, 2015 compared the three months ended June 30, 2014.  The decrease is a result of the reduction in outstanding debt accumulating interest.


Net Loss


During the six months ended June 30, 2015, the Company realized net loss of $113,747 compared with a net loss of $484,980 for the six months ended June 30, 2014.  The decrease in



12


net loss was primarily due to a significant reduction in the Companys business operations and operating expenses.  

During the three months ended June 30, 2015, the Company realized net loss of  ($46,917) compared with a net loss of  ($214,584) for the three months ended June 30, 2014.  The decrease in net loss was primarily due to a significant decrease in operating expenses as a result of decreased business operations, and a decrease in interest expense related to the issuance of convertible promissory notes.  


Liquidity and Capital Resources


As of June 30, 2015, the Company had a cash balance of $26 and a working capital deficit of $1,088,093, compared with a cash balance of $0 and working capital deficit of $1,322,860 at December 31, 2014.  The decrease in working capital deficit is mainly due to the decrease in convertible promissory notes and interest due under these notes.  


We do not have sufficient capital to pay our operating expenses.  In addition, as of June 30, 2015, there was $360,000 of notes which have matured and have not converted into common shares. In addition, there are an additional $ 17,500 principal amount of Bridge notes which mature during the next 12 months.  These notes are unsecured.  We do not have sufficient working capital to repay these obligations.  In the absence of the note holders converting to common stock the Company will need to raise additional capital to satisfy these obligations. If we are unable to raise the additional capital necessary to pay our operating expenses and satisfy our obligations, we may be unable to continue as a going concern.  In that event, investors could lose their entire investment in our company.


Cash Flows from Operating Activities


During the six months ended June 30, 2015, the Company had $( $15,843) of cash flow from operating activities compared with use of ($228,434) of cash flow during the six months ended June 30, 2014.  The significant decrease in the use of cash flow for operating activities is principally due a decrease in net loss related to the reduction of general and administrative expenses, offset by increases in certain current liabilities.


Cash Flows from Investing Activity


During the six months ended June 30, 2015 and 2014, the Company has not used any cash in investing activities.  


Cash Flows from Financing Activities


During the six months ended June 30, 2015, the Company received $15,869 of cash flow from financing activities compared to $292,543 of cash flow from financing activities during the three months ended June 30, 2014.  The decrease in cash provided by financing activities is mainly due to proceeds from the issuance of convertible promissory notes during the six months ended June 30, 2014.






13


Cash Flows from Operating Activities


During the six months ended June 30, 2014, the Company used $228,436 of cash flow from operating activities compared with use of $502,063 of cash flow during the six months ended June 30, 2013.  The decrease in the use of cash flow for operating activities is mainly due a decrease in net loss related to the reduction of general and administrative expenses, offset by increases in certain current liabilities.


Going Concern


We have not attained profitable operations and are dependent upon obtaining financing to pursue any extensive acquisitions and activities. For these reasons, our auditors stated in their report on our audited financial statements that they have substantial doubt that we will be able to continue as a going concern without further financing. 


Off-Balance Sheet Arrangements


We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.


Future Financings


We will continue to rely on the issuance of debt and equity sales of our common shares in order to continue to fund our business operations. Issuances of additional shares will result in dilution to existing stockholders. There is no assurance that we will achieve any additional sales of the equity securities or arrange for debt or other financing to fund planned acquisitions and exploration activities.





ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.


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


ITEM 4.

CONTROLS AND PROCEDURES.


Evaluation of disclosure controls and procedures




14


Our management, with the participation of our chief executive who also serves as our chief financial officer, evaluated the effectiveness of our disclosure controls and procedures as defined in Rule 13a-15(e) under the Exchange Act as of the end of the period covered by this Quarterly Report on Form 10-Q.  In designing and evaluating the disclosure controls and procedures, our management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.  In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.  The design of any disclosure controls and procedures 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.


Based on that evaluation, our chief executive officer who also serves as our chief financial officer concluded that, as of June 30, 2015, our disclosure controls and procedures were not effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules, regulations and forms, and that such information is accumulated and communicated to our management, including our chief executive officer who also serves as our chief financial officer, as appropriate, to allow timely decisions regarding required disclosure as a result of continuing weaknesses in our internal control over financial reporting as described in our Annual Report on Form 10-K for the year ended December 31, 2014.


Changes in internal control over financial reporting


There were no changes in internal control over financial reporting during the last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.


PART II - OTHER INFORMATION


ITEM 1.

LEGAL PROCEEDINGS.



A lawsuit was filed against the Company on November 13, 2014, in the Third Circuit Court of the 15th Judicial Circuit in and for Palm Beach County, Florida entitled Thinspace Technology, Inc. v. BullsnBears.com, Inc. The complaint alleges that BullsnBears failed to provide certain services it was contractually committed to provide and seeks damages in excess of $15,000.  The Company believes that this claim is without merit and is vigorously defending this action.  


On September 1, 2015, the Company received notice of an Administrative Complaint filed by the State of Florida Office of Financial Regulation (OFR) concerning certain private placement investments received by the Company during the period from 2011 to 2013 and the applicability of the registration exemption provisions of the Florida Statutes to said investments.  The



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Company vigorously disputes the legal basis for this Administrative Complaint and is presently conducting mitigating discussions with the OFR.




ITEM 1A.

RISK FACTORS.


We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.



ITEM 2.


Between January 2013 and December 2013 we issued and sold 10% convertible promissory notes in the principal amount of $977,200 in a private offering. These notes mature one year from the date of issuance, and on the maturity date were convertible into Shares of Common Stock of the Company at a price of $1.00 per Share. During the year ended December 31, 2014, we sold an additional $210,000 principal amount of one-year notes, bearing an interest rate of 10% per annum and convertible at any time following issuance into Shares of Common Stock of the Company at a price of $1.00 per Share. During the year ended December 31, 2014, we sold an additional $5,000 principal amount of Series A 5% Cumulative Convertible Preferred Stock, at a price of $1.25 per Share.  These Shares bear annual cumulative dividends of 5%, payable at the option of the Company in cash or Shares of Common Stock.  At the option of the holder, beginning one year from the date of issuance the Shares are convertible into Shares of Common Stock at a price of $1.25 per Share.  


In February, 2015, we converted $90,620 of these notes and accrued interest into 90,620 shares of Common Stock.  The balance of the notes matured between January 2015 and March 2015 and are now presently due.   In the event one or more of the holders should elect to convert the notes, the issuance of shares of our common stock in satisfaction of the notes will be dilutive to our current stockholders. If the notes are not converted, we will be required to satisfy the notes in cash. We do not have sufficient cash to satisfy the presently due notes, nor the balance of these notes when they become due and there are no assurances we will be able to raise the funds if necessary.


During the three months ended March 31, 2015, the Company received proceeds of $10,000 from the issuance of two convertible promissory notes, and in April, 2015 received $7,500 from the issuance of one convertible promissory note.  The notes bear interest at 15% per annum, are unsecured, and are due six months from the date of issuance. At maturity, the holders of the notes will receive any unpaid principal and accrued interest.   The note holders will also receive two shares of restricted common stock for every $1.00 borrowed by the company into shares of the common stock of the Company at a conversion price of $ 0.00 per share.


In June, 2015, we converted $215,000 of the principal amount of these notes and $19,000 of accrued interest into 234,000 shares of Common Stock.  




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In April, 2015, an affiliate of the Company assigned a Note in the principal amount of $22,500 to an unrelated party. The Note was converted by the holder in June, 2015 into 250,000 Shares of Common Stock at market price, and resulted in a reduction of $22,500 from Accounts Payable- Related Party.  


The notes were sold directly by the Company to accredited investors in private offerings exempt from registration under the Securities Act of 1933 in reliance on an exemption provided by Section 4(a)(2) and Regulation D of that act.  We did not pay any commissions or finders fee and used the net proceeds for working capital.



ITEM 3.

DEFAULTS UPON SENIOR SECURITIES.


None.


ITEM 4.

MINE SAFETY DISCLOSURES.


Not applicable to our companys operations.



ITEM 5.

OTHER INFORMATION.


From May, 2013 through June 30, 2015,the Company borrowed a total of $188,975 and repaid $55,578 from James Palladino, an officer and director of the Company. At June 30, 2015 and December 31, 2014, $ and $375,799 of the short-term loans were outstanding, respectively, and are accruing interest at 6% per annum. During the three months ended June 30, 2015, the Company received $0 and repaid $0 in principal and interest.


ITEM 6.

EXHIBITS.


The following exhibits are filed as part of this Quarterly Report:





Exhibit

Number

 

Description

31.1

 

Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer *

31.2

 

Rule 13a-14(a)/15d-14(a) Certification of principal financial and accounting officer*

32.1

 

Section 1350 Certification of Chief Executive Officer and principal financial and accounting officer*

101.INS

 

XBRL INSTANCE DOCUMENT **

101.SCH

 

XBRL TAXONOMY EXTENSION SCHEMA **

101.CAL

 

XBRL TAXONOMY EXTENSION CALCULATION LINKBASE **

101.DEF

 

XBRL TAXONOMY EXTENSION DEFINITION LINKBASE **

101.LAB

 

XBRL TAXONOMY EXTENSION LABEL LINKBASE **

101.PRE

 

XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE **

*

filed herewith.

**

In accordance with Regulation S-T, the XBRL-formatted interactive data files that comprise Exhibit 101 to this report shall be deemed furnished and not filed.











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SIGNATURES


Pursuant to the requirements of the Securities Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized on this 15 day of October, 2015.





 

BullsnBears.com, Inc.

  

(the Registrant)

  

 

 

 

BY:

/s/ James M. Palladino

 

 

James M. Palladino, Chief Executive Officer, Chief Financial Officer





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