Net Savings Link, Inc./DE - Annual Report: 2012 (Form 10-K)

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[X]	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED NOVEMBER 30, 2012

Securities registered pursuant to Section 12(b) of the Act:	Securities registered pursuant to section 12(g) of the Act:
NONE	Common Stock

	Large Accelerated Filer	[   ]	Accelerated Filer	[   ]
	Non-accelerated Filer	[   ]	Smaller Reporting Company	[X]
	(Do not check if a smaller reporting company)

		Page
	PART I
Item 1.	Business.	3
Item 1A.	Risk Factors.	5
Item 1B.	Unresolved Staff Comments.	5
Item 2.	Properties.	5
Item 3.	Legal Proceedings.	6
Item 4.	Mine Safety Disclosures.	6
	PART II
Item 5.	Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.	6
Item 6.	Selected Financial Data.	7
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operation.	7
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk.	12
Item 8.	Financial Statements and Supplementary Data.	12
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.	28
Item 9A.	Controls and Procedures.	29
Item 9B.	Other Information.	31
	PART III
Item 10.	Directors, Executive Officers and Corporate Governance.	31
Item 11.	Executive Compensation.	34
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.	36
Item 13.	Certain Relationships and Related Transactions, and Director Independence.	37
Item 14.	Principal Accountant Fees and Services.	37
	PART IV
Item 15.	Exhibits and Financial Statement Schedules.	38
Signatures		39
Exhibit Index		40

 

ITEM 7.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION.

		November 30,		November 30,
		2012		2011
Current Assets	$	22,168	$	177,723
Current Liabilities		363,179		77,381
Working Capital (Deficit)	$	(341,011)	$	100,342

		For the Year Ended
		November 30,
		2012		2011
Cash Flows used in Operating Activities	$	(393,792)	$	(720,338)
Cash Flows used in Investing Activities		-		(76,237)
Cash Flows provided by Financing Activities		237,000		950,132
Net Increase (Decrease) in Cash During the Year	$	(156,792)	$	153,557

		For the Year Ended
		November 30,
		2012		2011
Revenues	$	101,968	$	5,032
Operating Loss	$	960,867	$	687,698
Total Other Expense	$	292,016	$	1,612,429
Net Loss	$	1,252,883	$	2,295,095

		November 30,		November 30,
		2011		2010
Current Assets	$	177,723	$	21,366
Current Liabilities		77,381		178,476
Working Capital (Deficit)	$	100,342	$	(157,110)

		For the Year Ended
		November 30,
		2011		2010
Cash Flows used in Operating Activities	$	(720,338)	$	(55,795)
Cash Flows used in Investing Activities		(76,237)		(40,000)
Cash Flows provided by Financing Activities		950,132		113,453
Net Increase in Cash During the Year	$	153,557	$	17,658

	INDEX
Report of Independent Registered Public Accounting Firm	F-1
Balance Sheets	F-2
Statements of Operations	F-3
Statements of Cash Flows	F-4
Statements of Stockholders’ Equity (Deficit)	F-5
Notes to the Financial Statements	F-6

	November 30,			November 30,
ASSETS	2012			2011
Current assets
Cash	$	18,131		$	174,923
Other current assets		4,037			2,800
Total Current Assets		22,168			177,723
Property and equipment, net of accumulated depreciation of $19,887 and $7,329, respectively		17,785			30,343
Website development, net of accumulated amortization of $21,605 and $5,892, respectively		56,960			72,673
TOTAL ASSETS	$	96,913		$	280,739
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current Liabilities:
Accounts payable and other liabilities	$	48,281		$	35,838
Due to related parties		128,255			41,543
Derivative liability		54,062			-
Convertible notes payable, net of debt discount of $8,119		132,581			-
Total Current Liabilities		363,179			77,381
Total Liabilities		363,179			77,381
STOCKHOLDERS’ EQUITY (DEFICIT)
Series A Preferred stock, $0.0001 par value, 100,000,000 shares authorized, 1,500,000 and 0 shares issued and outstanding, respectively		15			-
Common stock, $0.001 par value, 1,000,000,000 shares authorized, 428,333,637 and 199,839,513 shares issued and outstanding, Respectively		428,334			199,840
Additional paid-in capital		3,048,205			2,493,455
Accumulated deficit		(3,742,820)			(2,489,937)
Total Stockholders’ Equity (Deficit)		(266,266)			203,358
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)	$	96,913		$	280,739

	For the Year Ended
	November 30,
		2012			2011
REVENUES	$	101,968		$	5,032
OPERATING EXPENSES
Depreciation and amortization expense		28,270			13,221
Bad debt expense		25,000			-
General and administrative		1,009,565			674,477
Total Operating Expenses		1,062,835			687,698
OPERATING LOSS		(960,867)			(682,666)
OTHER INCOME (EXPENSE)
Gain (loss) on derivative		11,686			(3,704,814)
Interest (expense)		(303,702)			(981,112)
Gain on extinguishment of debt		-			3,072,147
Other income		-			1,350
Total Other Income (Expense)		(292,016)			(1,612,429)
NET LOSS	$	(1,252,883)		$	(2,295,095)
BASIC NET LOSS PER COMMON SHARE	$	(0.01)		$	(0.01)
BASIC WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING		235,716,749			189,594,268

	For the Year Ended
	November 30,
		2012			2011
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(1,252,883)		$	(2,295,095)
Items to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		28,270			13,221
Debt discount amortization		278,552			949,932
Debt offering cost amortization		9,263			-
Bad debt expense		25,000			-
(Gain) loss on derivative		(11,686)			3,704,814
Gain on extinguishment of debt		-			(3,072,147)
Common stock issued for services		446,571			44,800
Changes in operating assets and liabilities
Decrease in accounts receivable		(25,000)			-
Increase in other assets		-			(2,800)
Increase in accounts payable and accrued liabilities		21,409			41,630
Increase (decrease) in related party accounts payable		86,712			(104,693)
Net Cash Used in Operating Activities		(393,792)			(720,338)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of equipment		-			(37,672)
Purchase of website development		-			(38,565)
Net Cash Used in Investing Activities		-			(76,237)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from convertible note payable		247,500			949,932
Cash paid for debt offering costs		(10,500)			-
Common stock issued for cash		-			200
Net Cash Provided by Financing Activities		237,000			950,132
INCREASE IN CASH		(156,792)			153,557
CASH AT BEGINNING OF PERIOD		174,923			21,366
CASH AT END OF PERIOD	$	18,131		$	174,923
CASH PAID FOR:
Interest	$	-		$	-
Income taxes	$	-		$	-
NON-CASH FINANCING ACTIVITIES:
Discount on convertible notes due to legal fees	$	50,000		$	-
Common stock issued for convertible notes and accrued interest	$	163,268		$	980,964
Derivative liability due to warrants	$	38,825		$	-
Discount on convertible notes payable from derivative instrument	$	217,266		$	949,932
Reclassification of derivative liability to additional paid in capital to note conversion	$	190,340		$	4,654,746
Debt discount for warrants	$	19,405		$	-
Preferred stock issued for settlement of accrued wages	$	2,500		$	-
Debt paid by related party contributed to capital	$	-		$	7,000

																		Total
												Additional						Stockholders’
	Common Stock					Series A Preferred Stock						Paid-in			Accumulated			Equity
	Shares			Amount		Shares			Amount			Capital			Deficit			(Deficit)
Balance, November 30, 2010	185,760,000		$	185,760		-		$	-		$	(108,028)		$	(194,842)		$	(117,110)
Common stock issued for debt and interest	13,079,513			13,080		-			-			967,884			-			980,964
Reclassification of  derivative liability to additional paid-in capital	-			-		-			-			4,654,746			-			4,654,746
Gain on extinguishment of debt	-			-		-			-			(3,072,147)			-			(3,072,147)
Common stock issued for services	1,000,000			1,000		-			-			44,000			-			45,000
Contributed capital	-			-		-			-			7,000			-			7,000
Net loss for the year ended November 30, 2011	-			-		-			-			-			(2,295,095)			(2,295,095)
Balance, November 30, 2011	199,839,513			199,840		-			-			2,493,455			(2,489,937)			203,358
Preferred stock issued for settlement of accrued wages	-			-		1,500,000			15			2,485			-			2,500
Common stock issued for services	26,357,143			26,357								420,214						446,571
Common stock issued for debt and interest	202,136,981			202,137		-			-			(38,869)			-			163,268
Reclassification of  derivative liability to additional paid-in capital	-			-		-			-			190,340			-			190,340
Warrants issued for debt discount	-			-		-			-			19,405			-			19,405
Reclassification of derivative liability from additional paid in capital	-			-		-			-			(38,825)			-			(38,825)
Net loss for the year ended November 30, 2012															(1,252,883)			(1,252,883)
Balance, November 30, 2012	428,333,637		$	428,334		1,500,000		$	15		$	3,048,205		$	(3,742,820)		$	(266,266)

a.	Basis of Presentation and Accounting Methods

b.	Use of Estimates

c.	Reclassification

d.	Cash and Cash Equivalents

e.	Intangible Assets

f.	Impairment of Intangible assets

g.	Basic and Diluted Net Loss Per Share

h.	Financial Instruments

	Level 1		Level 2		Level 3		Total
Assets	$	-	$	-	$	-	$	-
Liabilities
Derivative financial instruments	$	-	$	-	$	54,062	$	54,062

i.	Revenue Recognition

j.	Recent Accounting Pronouncements

k.	Income Taxes

l.	Accounting for Derivative Instruments

m.	Share-Based Compensation

During the year ended November 30, 2012, NSL issued four Unsecured Convertible Promissory Notes to Asher Enterprises, Inc., a Delaware corporation (“Asher”) (the “2012 Asher Convertible Promissory Notes”) in the amounts of $47,500, $37,500, $37,500 and $50,000, or a total of $172,500.  The 2012 Asher Convertible Promissory Notes are unsecured, due approximately nine months from the dates of issuance, accrued interest at 8% per annum and are convertible, at the option of the holder, into shares of the Company’s common stock after 180 days from issuance at fifty eight percent (58%) of the fair market value of one share of NSL’s common stock based on the average of the three lowest bid prices of the Company’s common stock during the ten trading days prior to the conversion date.

 

Expected Term	7 years
Expected volatility	434.78%
Risk free interest rate	1.43%
Expected dividend yield	0.00%

Beginning balance	$	-
Issuance of notes payable		297,500
Less: debt discount from conversion options, warrants and fees		(286,671)
Add: amortization of discount		278,552
Less: conversions to common stock		(156,800)
Ending balance	$	132,581

Conversion option derivative liabilities November 30, 2011	$	-
Addition of new conversion option derivatives		261,619
Reclassification of derivative liability to additional paid-in capital due to notes payable conversions		(190,340)
Reclassification of warrant derivative liability from additional paid-in capital		38,825
Change in fair value		(56,042)
Balance at November 30, 2012	$	54,062

Excess of fair value of conversion option derivative liabilities over the related notes payable	$	44,356
Change in fair value		(56,042)
Gain on derivative liabilities	$	(11,686)

Description	Useful Life
Computer equipment	5 years
Software	3 years
Furniture and fixtures	7 years

	2012			2011
Deferred tax assets:
Net operating loss carry forward	$	2,160,221		$	2,489,937
Gain (loss) on derivative liability		11,686			(3,704,814)
Stock based compensation		(446,571)			-
Accretion expense		(278,552)			(949,932)
Gain on extinguishment of debt		-			3,072,147
Taxable loss		1,446,784			907,338
Deferred tax asset	$	491,907			308,495
Valuation allowance		(491,907)			(308,495)
Net deferred tax asset	$	-		$	-

	Amount
Year ending November 30, 2013	$	8,624

 

ITEM 9.

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

1.	The application of accounting principles to any specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on our financial statements, and neither a written report was provided to us nor oral advice was provided that Malone & Bailey, P.C.  concluded was an important factor considered by us in reaching a decision as to the accounting, auditing or financial reporting issue; or
2.	Any matter that was either subject of disagreement or event, as defined in Item 304(a)(1)(iv)(A) of Regulation S-K and the related instruction to Item 304 of Regulation S-K, or a reportable event, as that term is explained in Item 304(a)(1)(iv)(A) of Regulation S-K.

Name	Age	Position
David Saltrelli	63	CEO, CFO, President, and Director
Peter Schuster	65	Secretary, Treasurer and Director
Jon Wallen	38	Director

1.	A petition under the Federal bankruptcy laws or any state insolvency law was filed by or against, or a receiver, fiscal agent or similar officer was appointed by a court for the business or property of such person, or any partnership in which he was a general partner at or within two years before the time of such filing, or any corporation or business association of which he was an executive officer at or within two years before the time of such filing;
2.	Convicted in a criminal proceeding or is a named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses);
3.	The subject of any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from, or otherwise limiting, the following activities;
	i)	Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator,  floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity;
	ii)	Engaging in any type of business practice; or
	iii)	Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of Federal or State securities laws or Federal commodities laws;
4.	The subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described in paragraph 3.i in the preceding paragraph or to be associated with persons engaged in any such activity;
5.	Was found by a court of competent jurisdiction in a civil action or by the Commission to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated;

6.	Was found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated;
7.	Was the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of:
	i)	Any Federal or State securities or commodities law or regulation; or
	ii)	Any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order, or
	iii)	Any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or
8.	Was the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

Summary Compensation Table
						Non-Equity	Nonqualified
						Incentive	Deferred	All
Name &				Stock	Option	Plan	Compensation	Other
Principal		Salary	Bonus	Awards	Awards	Compensation	Earnings	Compensation	Total
Position	Year	($)	($)	($)	($)	($)	($)	($)	($)
David Saltrelli	2012	72,997	0	0	0	0	0	0	72,997
CEO, CFO, President	2011	96,000	0	0	0	0	0	0	96,000
	2010	73,118	0	0	0	0	0	0	73,118
Peter Schuster	2012	48,000	0	0	0	0	0	0	48,000
Secretary & Treasurer	2011	96,000	0	0	0	0	0	0	96,000
	2010	73,118	0	0	0	0	0	0	73,118