Net Savings Link, Inc./DE - Annual Report: 2013 (Form 10-K)
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-K
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[X]
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED NOVEMBER 30, 2013
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Commission File Number: 000-53346
NET SAVINGS LINK, INC.
(Exact name of registrant as specified in its charter)
NEVADA
(State or other jurisdiction of incorporation or organization)
140 Island Way, Suite 280
Clearwater, Florida 33767
(Address of principal executive offices, including zip code)
727-442-2600
(Registrant’s telephone number, including area code)
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Securities registered pursuant to Section 12(b) of the Act:
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Securities registered pursuant to section 12(g) of the Act:
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NONE
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Common Stock
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Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES [ ] NO [X]
Indicate by check mark if the registrant is required to file reports pursuant to Section 13 or Section 15(d) of the Act: YES [X] NO [ ]
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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
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Large Accelerated Filer
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[ ]
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Accelerated Filer
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[ ]
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Non-accelerated Filer (Do not check if a smaller reporting company)
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[ ]
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Smaller Reporting Company
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[X]
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). YES [ ] NO [X]
State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was sold, or the average bid and asked price of such common equity, as of March 14, 2014: $180,000.
At March 14, 2014, 135,870,536 shares of the registrant’s common stock were outstanding.
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Page
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Business.
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3
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Risk Factors.
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5
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Unresolved Staff Comments.
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5
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Properties.
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5
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Legal Proceedings.
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6
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Mine Safety Disclosures.
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6
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Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
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6
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Selected Financial Data.
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7
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Management’s Discussion and Analysis of Financial Condition and Results of Operation.
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7
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Quantitative and Qualitative Disclosures About Market Risk.
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10
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Financial Statements and Supplementary Data.
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10
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Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.
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27
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Controls and Procedures.
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27
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Other Information.
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28
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Directors, Executive Officers and Corporate Governance.
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28
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Executive Compensation.
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31
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Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
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32
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Certain Relationships and Related Transactions, and Director Independence.
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33
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Principal Accountant Fees and Services.
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33
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Exhibits and Financial Statement Schedules.
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34
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35
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36
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Certain statements contained in this Annual Report on Form 10-K constitute “forward-looking statements.” These statements, identified by words such as “plan,” “anticipate,” “believe,” “estimate,” “should,” “expect,” and similar expressions include our expectations and objectives regarding our future financial position, operating results and business strategy. These statements reflect the current views of management with respect to future events and are subject to risks, uncertainties and other factors that may cause our actual results, performance or achievements, or industry results, to be materially different from those described in the forward-looking statements. Such risks and uncertainties include those set forth under the caption “Management’s Discussion and Analysis or Plan of Operation” and elsewhere in this Annual Report. We advise you to carefully review the reports and documents we file from time to time with the Securities and Exchange Commission (the “SEC”), particularly our Quarterly Reports on Form 10-Q and our Current Reports on Form 8-K.
As used in this Annual Report, the terms “we,” “us,” “our,” “Net Savings” and the “Company” means Net Savings Link, Inc., unless otherwise indicated. All dollar amounts in this Annual Report are expressed in U.S. dollars, unless otherwise indicated.
Our current business model has evolved to the aggregating and delivery of discounted services, products and deals that are supplied by our formidable merchant base. These discounted services are then packaged in the form of a savings certificate which offers substantial savings value to the end user or consumer, and are purchased in quantity by high volume retailers, and offered as an incentive to attract new customers and upgrade current customer sales.
Here is an example of how our savings certificates are used.
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1)
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An auto dealer buys 100 Savings Certificates for $15 each. Each certificate provides the end user $1,000 in discounts, deals, and coupon savings on everyday items such as groceries, travel and shopping consumables, by using all the benefits provided at the Net Savings Link exclusive website.
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2)
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The auto dealer advertises “Test Drive One of Our Auto’s & receive a $1,000 Grocery Savings Certificate at the Grocery Store of Your Choice.
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3)
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A person would visit the auto dealership, test drive a car and subsequently receive a $1,000 Savings Certificate from the auto dealer.
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4)
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The holder of the certificate may toss out the certificate, put it in their desk, give it to a friend or go online to www.thesavingssystem.com, sign up for FREE, and begin using their savings benefits.
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5)
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They might go to the Grocery Section, find the grocery store at which they shop and select from the items on sale at their grocery store for the upcoming week.
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6)
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For example, let’s say their grocery store has Hellman’s Mayonnaise on sale with a “buy one at $4 and get a second one free”. Their particular grocery store would never put out a coupon at the same time as the buy one – get one offer, nor would any of the other 139,000 grocery stores in the U.S.
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7)
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However, a recipient or holder of one of our savings certificates using our site could find a free Hellman’s mayonnaise coupon, or they could go to one of our recommended outside coupon clipping services and purchase coupons direct from the clipping service. Say, for example, they print two free 75 cent Hellman’s mayonnaise coupons.
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8)
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They would take the two coupons to their grocery store, buy the one jar of mayonnaise for $4, getting the second jar for free. They would then hand the cashier the two $0.75 cent coupons, which in this case their grocery store doubles to $1.50 each.
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9)
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The shopper walks out of the store paying $1 for $8 worth of Hellman’s mayonnaise.
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10)
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The math: $4 for the first one, $0 for the second, two 75 cent coupons doubled to $1.50 each = $4 + $0 -$1.50 - $1.50 = $1.00 total spent.
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11)
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The holder of the certificate just saved $7.00.
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12)
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We believe that the holder of our $1,000 savings certificate can save $1,000 and more, in a year, using our system.
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It’s simple, works in all 139,000 grocery stores including every Walmart, Target, Walgreen & CVS nationwide.
Thus, we have positioned ourselves in the multi-billion dollar premium and incentive marketplace where retailers spend billions each year for products such as our savings certificates to attract customers.
General
We were incorporated in the State of Nevada on February 21, 2007 and began doing business as a mining and exploration company. During November 2010, we changed our business plan from mining and exploration to a membership based Internet Company that provides members with links to predominantly other 3rd party websites that offer savings and discount deals.
The membership model did not produce high volume sales, which led us to the development of a product that could be sold as a premium or incentive to large organizations who constantly require more customers and higher sales.
We have reduced operations to slightly more than nominal.
We have no plans to change our current business plan, combine with any other business entities, and are not currently aware of any conditions that might bring about a change in our current plans. We have no plans to be acquired, nor do we, or our shareholders, have plans to enter into a change of control or similar transaction or to change our management.
Our plan of operations is forward looking and there is no assurance that we will ever achieve profitability.
Offices
We maintain a presence at 140 Island Way #280, Clearwater, Florida 33767, however, normal business functions are performed via virtual access from shared space and home office locations which are provided at no charge to us in order to reduce overhead.
Products
We offer premium and incentive certificates that provide denominations of $1,000 and $3,000 in aggregated savings, discounts and deals to the end user (and are sold as a premium incentive to businesses to promote their product or service.
The Savings Certificate can be employed as an incentive to generate additional prospects, a closing gift (gift with purchase), a referral gift (refer your friend and receive a membership free), and a value added gift to the club or union to justify payment or as an employee benefit (the employee saves money by using the membership that they received from their employer).
Customer Service
The redemption website for our Guaranteed Savings Certificates is located at www.thesavingssystem.com and customer service is offered at the website. We provide email access to our customer service department with a commitment of prompt response time, and a guaranteed satisfactory resolution to any customer issue. In addition, we provide a voice mail phone service 24/7 at 727-442-3200.
Revenue
Revenue is generated from selling our Savings Certificates to companies and organizations that use the membership as a premium or gift incentive. For example, a potential customer could receive a Savings Certificate valued at $1000 in savings for test driving a car or for purchasing $1,000 worth of carpeting. Or a Church or other organization wanting to raise money could offer a Savings Certificate for receiving a $30 donation. In each case, Net Savings Link would receive an average of $15 per Savings Certificate sold.
At present we have reduced our operations to slightly more than nominal.
Competition
There are thousands of companies that sell promotional offers or fund raising products. The competition is intense.
Marketing
Net Savings Link calls known users of promotional incentives and or fund raising products and offers one or our Guaranteed Savings Certificates for the company or organization to try.
Our Strategy
To call existing users of promotional products or fundraising products and offer our Guaranteed Savings Certificates as an alternative that out performs what they are currently using. The potential customers know the market and they are completely educated on using gifts & incentives. Our job is to put our product in front of as many potential users as possible.
Operations
Customer Service – minimal customer service is needed because the redemption website at www.thesavingssystem.com is user friendly. Customer service can be reached via email 24 hours a day, 7 days a week or by leaving a voice mail.
Programming – Our websites are set up so that our President can make any changes and maintain the website completely using a customized Administrative panel.
Sales – Sales are coordinated by our President calling know users of incentives and fund raising products.
Employees
We have no employees. Our President handles all aspects of sales, programming and customer service.
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.
None.
We currently own minimal real property in the form of software and computers.
We are not a party to any material legal proceedings and, to our knowledge; no such proceedings are threatened or contemplated.
Not applicable.
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MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
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Our shares of common stock are quoted on the Bulletin Board operated by the Financial Industry Regulatory Authority (“FINRA”) under the symbol “NSAV”, the high and low bid information for our common stock has been as follows:
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Fiscal Year – 2013
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High Bid
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Low Bid
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Fourth Quarter:
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09/01/13 to 11/30/13
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$0.0024
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$0.0010
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Third Quarter:
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06/01/13 to 8/31/13
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$0.0070
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$0.0012
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Second Quarter:
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03/01/13 to 5/31/13
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$0.0190
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$0.0110
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First Quarter:
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12/01/12 to 2/28/13
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$0.0225
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$0.0030
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Fiscal Year – 2012
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High Bid
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Low Bid
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Fourth Quarter:
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9/01/12 to 11/30/12
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$0.0045
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$0.0004
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Third Quarter:
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6/01/12 to 8/31/12
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$0.0290
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$0.0022
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Second Quarter:
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3/01/12 to 5/31/12
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$0.0700
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$0.0101
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First Quarter:
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12/01/11 to 2/29/12
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$0.0900
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$0.0120
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Quotations provided by the OTC Bulletin Board reflect inter-dealer prices, without retail mark-up, markdown or commission and may not represent actual transactions
Dividends
We have not declared any cash dividends on our common stock since our inception. There are no dividend restrictions that limit our ability to pay cash dividends on our common stock in our Articles of Incorporation or Bylaws. Our governing statute, Chapter 78 – “Private Corporations” of the Nevada Revised Statutes (the “NRS”), does provide limitations on our ability to declare cash dividends. Section 78.288 of Chapter 78 of the NRS prohibits us from declaring cash dividends where, after giving effect to the distribution of the dividend:
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(a)
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we would not be able to pay our debts as they become due in the usual course of business; or
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(b)
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our total assets would be less than the sum of our total liabilities plus the amount that would be needed, if we were to be dissolved at the time of distribution, to satisfy the preferential rights upon dissolution of stockholders who may have preferential rights and whose preferential rights are superior to those receiving the distribution (except as otherwise specifically allowed by our Articles of Incorporation).
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On November 4, 2010, the Company and its Board of Directors approved a 1.4:1 dividend of all issued and outstanding common shares. The effect of the dividend increased the number of issued and outstanding common shares from 77,400,000 shares to 185,760,000 shares. Effective March 15, 2013, we executed at 15-for-1 reverse split of the Company’s common stock. As at November 30, 2013 and November 30, 2012, we have 108,591,412 and 28,555,576, respectively shares issued and outstanding.
Recent Sales of Unregistered Securities
None.
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.
RESULTS OF OPERATIONS - NOVEMBER 30, 2013 COMPARED TO NOVEMBER 30, 2012
Working Capital
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November 30,
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November 30,
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2013
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2012
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Current Assets
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$
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4,332
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$
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22,168
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Current Liabilities
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560,509
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363,179
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Working Capital (Deficit)
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$
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(556,177)
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$
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(341,011)
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Cash Flows
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For the Year Ended
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November 30,
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2013
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2012
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Cash Flows used in Operating Activities
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$
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(120,231)
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$
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(393,792)
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Cash Flows used in Investing Activities
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-
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-
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Cash Flows provided by Financing Activities
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104,900
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237,000
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Net Increase (Decrease) in Cash During the Year
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$
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(15,331)
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$
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(156,792)
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Income Statement
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For the Year Ended
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November 30,
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2013
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2012
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Revenues
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$
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17,132
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$
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101,968
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Operating Loss
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$
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362,201
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$
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960,867
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Total Other Expense
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$
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265,488
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$
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292,016
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Net Loss
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$
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627,689
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$
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1,252,883
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Balance Sheet
As at November 30, 2013, the Company had total assets of $9,560 compared with total assets of $96,913 as at November 30, 2012. The assets are comprised of cash balances in the Company’s bank account and property and equipment. The decrease is mainly attributed to a decrease in the net book value of property and equipment and impairment of website development of $56,960, as well as a $15,331 decrease in cash as a result of proceeds from debt financing received during the year ended November 30, 2013 being greater than proceeds from debt financing received during the year ended November 30, 2012.
The Company had total liabilities of $560,509 as at November 30, 2013 compared with $363,179 as at November 30, 2012. The increase in total liabilities is mainly attributed to the increase of accrued wages payable to the Company’s officers in the amount of $189,500 and an increase in the valuation of derivative liabilities from convertible notes payable at November 30, 2013 compared to November 30, 2012 of $36,637, partially offset by decreases in convertible notes payable, related accrued interest and accounts payable as a result of debt conversion of $28,807.
During the year ended November 30, 2013, the Company issued 80,035,836 shares of common stock to the holders of convertible promissory notes payable, converting principal of $131,300 and interest of $6,584.
During the year ended November 30, 2012, the Company issued 13,475,799 shares of common stock to the holders of convertible promissory notes payable, converting principal of $156,800 and interest of $6,468.
During the year ended November 30, 2012, the Company issued 1,500,000 shares of Series A preferred stock to two of its officers and directors for a total of $2,500 in accrued wages. Each share of Series A preferred stock has 1,000 votes. The Series A preferred stock and the common stock vote as a single class on all matters submitted to the stockholders.
Operating Revenues
During the year ended November 30, 2013, the Company received $17,132 in commissions revenue, compared to $101,968 in the same periods ended November 30, 2012.
Operating Expenses
During the year ended November 30, 2013, the Company incurred operating expenses totaling $379,333 compared with $1,062,835 for the year ended November 30, 2012. The decrease in operating expenses is attributed to a decrease in overall operating activity as the Company had minimal operations during fiscal 2013 compared to fiscal 2012, inclusive of $446,571 in common stock issued for services in fiscal 2012, compared to $0 in fiscal 2013.
Net Loss
During the year ended November 30, 2013, the Company incurred a net loss of $627,689 compared with a net loss of $1,252,883 for the year ended November 30, 2012. The decrease in net loss was primarily due to a decrease in overall operating activity as the Company had minimal operations during fiscal 2013 compared to fiscal 2012, as well as an increase $150,045 increase in loss on derivatives, partially offset by $45,175 related to impairment of intangible website development costs, $176,573 decrease of interest expense related to issuances of convertible debt at a discount in fiscal 2013 compared to fiscal 2012.
Liquidity and Capital Resources
As at November 30, 2013, the Company had a cash balance of $2,800 and working capital deficit of $556,177 compared with a cash balance of $18,131 and a working capital deficit of $341,011 at November 30, 2012. The decrease in working capital is mainly due to the increase in related party payables of $189,500 related to accrued wages to officers and an increase of $36,637 in the valuation of derivative liabilities related convertible debt.
Cash Flows from Operating Activities
During the year ended November 30, 2013, the Company used $120,231 of cash flow from operating activities compared with use of $393,792 of cash flow during the year ended November 30, 2012. The decrease in the use of cash flow from operating activities is mainly due to the increase in unpaid related party liabilities for the period as well as a decrease in overall operating expenses from fiscal 2012 as a result of a decrease in overall operating activity during fiscal 2013.
Cash Flows from Investing Activity
During the years ended November 30, 2013 and 2012, the Company did not expend any money on capital purchases.
Cash Flows from Financing Activities
During the year ended November 30, 2013, the Company received proceeds of $110,900 from four convertible promissory notes payable compared to $247,500 from the issuance of six convertible promissory notes payable in fiscal 2012.
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 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.
Critical Accounting Policies
We have identified certain accounting policies, described below, that are most important to the portrayal of our current financial condition and results of operations. Our significant accounting policies are disclosed in the notes to the audited financial statements included in this Annual Report.
Revenue Recognition
We derive revenue principally from the marketing of memberships and subsequent generation of commissions. The timing of revenue recognition and the amount of revenue actually recognized in each case depends upon a variety of factors, including the specific terms of each arrangement and the nature of our deliverables and obligations. Determination of the appropriate amount of revenue recognized involves judgments and estimates that we believe are reasonable, but actual results may differ from our estimates. We record reductions to revenue for customer incentive programs, including special pricing agreements and other volume-related rebate programs. Certain reductions to revenue for customer incentives are based on estimates, including our assumptions related to historical and projected customer sales volumes, market share and inventory levels.
We use estimates of fair value to value derivative instruments. Fair value is defined as the price to sell an asset or transfer a liability in an orderly transaction between willing and able market participants. In general, our policy in estimating fair values is to first look at observable market prices for identical assets and liabilities in active markets, where available. When these are not available, other inputs are used to model fair value such as prices of similar instruments, yield curves, volatilities, prepayment speeds, default rates and credit spreads (including for our liabilities), relying first on observable data from active markets. Additional adjustments may be made for factors including liquidity, credit, bid/offer spreads, etc., depending on current market conditions. Transaction costs are not included in the determination of fair value. When possible, we seek to validate the model’s output to market transactions. Depending on the availability of observable inputs and prices, different valuation models
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.
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F-1
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F-2
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F-3
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F-4
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F-5
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F-6
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To the Board of Directors
Net Savings Link, Inc
Clearwater Beach, FL
We have audited the accompanying balance sheets of Net Savings Link, Inc (the “Company”) as of November 30, 2013 and 2012 and the related statements of operations, stockholders’ equity (deficit), and cash flows for the years ended November 30, 2013 and 2012. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of November 30, 2013 and 2012 and the related results of its operations and its cash flows for the years ended November 30, 2013 and 2012 in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company has incurred losses from operation since inception. This factor raises substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to this matter are described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ MALONEBAILEY, LLP
www.malone-bailey.com
Houston, Texas
March 14, 2014
F-1
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NET SAVINGS LINK, INC.
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November 30,
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November 30,
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ASSETS
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2013
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2012
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Current assets
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Cash
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$ | 2,800 | $ | 18,131 | ||||
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Prepaid expenses and other current assets
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1,532 | 4,037 | ||||||
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Total Current Assets
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4,332 | 22,168 | ||||||
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Property and equipment, net of accumulated depreciation of $32,444 and $19,887, respectively
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5,228 | 17,785 | ||||||
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Website development, net of accumulated amortization of $0 and $21,605, respectively
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- | 56,960 | ||||||
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TOTAL ASSETS
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$ | 9,560 | $ | 96,913 | ||||
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LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
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Current Liabilities:
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Accounts payable and other liabilities
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$ | 36,362 | $ | 48,281 | ||||
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Due to related parties
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317,755 | 128,255 | ||||||
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Derivative liability
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90,699 | 54,062 | ||||||
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Convertible notes payable, net of debt discount of $0 and $8,119, respectively
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115,693 | 132,581 | ||||||
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Total Current Liabilities
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560,509 | 363,179 | ||||||
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Total Liabilities
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560,509 | 363,179 | ||||||
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STOCKHOLDERS’ EQUITY (DEFICIT)
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Series A Preferred stock, $0.0001 par value, 100,000,000 shares authorized, 1,500,000 and 1,500,000 shares issued and outstanding, respectively
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15 | 15 | ||||||
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Common stock, $0.001 par value, 1,000,000,000 shares authorized, 108,591,412 and 28,555,576 shares issued and outstanding, respectively
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108,591 | 28,556 | ||||||
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Additional paid-in capital
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3,710,954 | 3,447,983 | ||||||
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Deficit accumulated during the development stage
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(4,370,509 | ) | (3,742,820 | ) | ||||
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Total Stockholders’ Equity (Deficit)
|
(550,949 | ) | (266,266 | ) | ||||
|
|
||||||||
|
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFECIT)
|
$ | 9,560 | $ | 96,913 | ||||
The accompanying notes are an integral part of these financial statements.
F-2
NET SAVINGS LINK, INC.
|
For the Years Ended
November 30,
|
||||||||
|
2013
|
2012
|
|||||||
|
|
||||||||
|
REVENUES
|
$ | 17,132 | $ | 101,968 | ||||
|
|
||||||||
|
OPERATING EXPENSES
|
||||||||
|
|
||||||||
|
Depreciation and amortization expense
|
24,342 | 28,270 | ||||||
|
|
||||||||
|
Bad debt expense
|
- | 25,000 | ||||||
|
|
||||||||
|
Impairment of website development
|
45,175 | - | ||||||
|
|
||||||||
|
General and administrative
|
309,816 | 1,009,565 | ||||||
|
|
||||||||
|
Total Operating Expenses
|
379,333 | 1,062,835 | ||||||
|
|
||||||||
|
OPERATING LOSS
|
(362,201 | ) | (960,867 | ) | ||||
|
|
||||||||
|
OTHER INCOME (EXPENSE)
|
||||||||
|
|
||||||||
|
Gain (loss) on derivative
|
(138,359 | ) | 11,686 | |||||
|
|
||||||||
|
Interest expense
|
(127,129 | ) | (303,702 | ) | ||||
|
|
||||||||
|
|
||||||||
|
Total Other Income (Expense)
|
(265,488 | ) | (292,016 | ) | ||||
|
|
||||||||
|
NET INCOME (LOSS)
|
$ | (627,689 | ) | $ | (1,252,883 | ) | ||
|
|
||||||||
|
BASIC NET INCOME (LOSS) PER COMMON SHARE
|
$ | (0.01 | ) | $ | (0.08 | ) | ||
|
|
||||||||
|
BASIC WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
|
64,521,207 | 15,714,450 | ||||||
The accompanying notes are an integral part of these financial statements.
F-3
NET SAVINGS LINK, INC.
|
For the Years Ended
|
||||||||
|
November 30,
|
||||||||
|
2013
|
2012
|
|||||||
|
CASH FLOWS FROM OPERATING ACTIVITIES
|
||||||||
|
Net loss
|
$ | (627,689 | ) | $ | (1,252,883 | ) | ||
|
Items to reconcile net loss to net cash used in operating activities:
|
||||||||
|
Depreciation and amortization
|
24,342 | 28,270 | ||||||
|
Debt discount amortization
|
106,912 | 278,552 | ||||||
|
Debt offering cost amortization
|
5,705 | 9,263 | ||||||
|
Bad debt expense
|
- | 25,000 | ||||||
|
(Gain) loss on derivative
|
138,359 | (11,686 | ) | |||||
|
Impairment of website development
|
45,175 | - | ||||||
|
Common stock issued for services
|
- | 446,571 | ||||||
|
Changes in operating assets and liabilities:
|
||||||||
|
Increase in accounts receivable
|
- | (25,000 | ) | |||||
|
(Increase) decrease in prepaid and other assets
|
2,800 | - | ||||||
|
Decrease in accounts payable and accrued liabilities
|
(5,335 | ) | 21,409 | |||||
|
Increase in related party accounts payable
|
189,500 | 86,712 | ||||||
|
Net Cash Used in Operating Activities
|
(120,231 | ) | (393,792 | ) | ||||
|
|
||||||||
|
CASH FLOWS FROM INVESTING ACTIVITIES
|
- | - | ||||||
|
|
||||||||
|
CASH FLOWS FROM FINANCING ACTIVITIES
|
||||||||
|
Proceeds from note payable
|
- | - | ||||||
|
Proceeds from convertible note payable
|
110,900 | 247,500 | ||||||
|
Cash paid for debt offering costs
|
(6,000 | ) | (10,500 | ) | ||||
|
Common stock issued for cash
|
- | - | ||||||
|
Net Cash Provided by Financing Activities
|
104,900 | 237,000 | ||||||
|
|
||||||||
|
DECREASE IN CASH
|
(15,331 | ) | (156,792 | ) | ||||
|
CASH AT BEGINNING OF PERIOD
|
18,131 | 174,923 | ||||||
|
CASH AT END OF PERIOD
|
$ | 2,800 | $ | 18,131 | ||||
|
|
||||||||
|
CASH PAID FOR:
|
||||||||
|
Interest
|
$ | - | $ | - | ||||
|
Income taxes
|
$ | - | $ | - | ||||
|
|
||||||||
|
NON-CASH FINANCING ACTIVITIES:
|
||||||||
|
Common stock issued for convertible notes and interest
|
$ | 137,884 | $ | 163,268 | ||||
|
Discount on convertible notes payable from derivative instrument
|
$ | 103,400 | $ | 217,266 | ||||
|
Reclass of derivative to additional paid-in capital from debt conversion
|
$ | 205,122 | $ | 190,340 | ||||
|
Discount on convertible notes due to legal fees
|
$ | - | $ | 50,000 | ||||
|
Derivative liability due to warrants
|
$ | - | $ | 38,825 | ||||
|
Debt discount for warrants
|
$ | - | $ | 19,405 | ||||
|
Preferred stock issued for related party receivable
|
$ | - | $ | 2,500 | ||||
The accompanying notes are an integral part of these financial statements.
F-4
NET SAVINGS LINK, INC.
Years ended November 30, 2013 and 2012
|
Common Stock
|
Preferred Stock
|
Additional
Paid-in
|
Accumulated
|
Total
Stockholders’
|
||||||||||||||||||||||||
|
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Deficit
|
Equity (Deficit)
|
||||||||||||||||||||||
|
Balance, November 30, 2011
|
13,322,634 | $ | 13,323 | - | $ | - | $ | 2,679,972 | $ | (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
|
1,757,143 | 1,757 | 444,814 | 446,571 | ||||||||||||||||||||||||
|
Common stock issued for debt
and interest
|
13,475,799 | 13,476 | - | - | 149,792 | - | 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
|
28,555,576 | 28,556 | 1,500,000 | 15 | 3,447,983 | (3,742,820 | ) | (266,266 | ) | |||||||||||||||||||
|
Common stock issued for debt and interest
|
80,035,836 | 80,035 | - | - | 57,849 | - | 137,884 | |||||||||||||||||||||
|
Reclassification of derivative
liability to additional paid-in capital
|
- | - | - | - | 205,122 | - | 205,122 | |||||||||||||||||||||
|
Net loss for the year ended
November 30, 2013
|
(627,689 | ) | (627,689 | ) | ||||||||||||||||||||||||
|
Balance, November 30, 2013
|
108,591,412 | $ | 108,591 | 1,500,000 | $ | 15 | $ | 3,710,954 | $ | (4,370,509 | ) | $ | (550,949 | ) | ||||||||||||||
The accompanying notes are an integral part of these financial statements.
F-5
NET SAVINGS LINK, INC.
1. Nature of Operations and Continuance of Business
Net Savings Link, Inc. (“NSL”, “the Company”, or “Company”) formerly known as Calibert Explorations, Ltd. was incorporated under the laws of the State of Nevada on February 21, 2007. NSL was organized to explore mineral properties in Canada; however, the Company decided to change its business strategy during fiscal year 2010 and on November 11, 2010, changed its name to Net Savings Link, Inc from Calibert Explorations, Ltd. to reflect their business objectives of being an online provider of discount offers and savings opportunities to the mass consumer market. This was achieved by doing a reverse merger with “Net Savings Link, Inc”, and Calibert Explorations, Ltd being the surviving entity.
Going Concern
NSL’s financial statements are prepared using Generally Accepted Accounting Principles applicable to a going concern that contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, NSL has generated minimal revenue and accumulated significant losses since inception. As of November 30, 2013, company has accumulated deficit of $4,370,509 and a working capital deficit of $556,177. All of these items raise substantial doubt about its ability to continue as a going concern. Management’s plans with respect to alleviating the adverse financial conditions that caused management to express substantial doubt about the NSL’s ability to continue as a going concern are as follows:
In order to fund the start-up of operations during the year ended November 30, 2012, NSL entered into several financing transactions and continues to try to raise funds in fiscal (see Note 4). The continuation of NSL as a going concern is dependent upon its ability to generating profitable operations that produce positive cash flows. If NSL is not successful, it may be forced to raise additional debt or equity financing.
There can be no assurance that NSL will be able to achieve its business plans, raise any more required capital or secure the financing necessary to achieve its current operating plan. The ability of NSL to continue as a going concern is dependent upon its ability to successfully accomplish the plan described in the preceding paragraph and eventually attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
2. Summary of Significant Accounting Policies
a. Basis of Presentation and Accounting Methods
The financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States using the accrual method of accounting. NSL’s fiscal year-end is November 30.
b. Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. NSL regularly evaluates estimates and assumptions related to deferred income tax asset valuation allowances. NSL bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by NSL may differ materially and adversely from NSL’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.
F-6
c. Reclassification
Certain prior year amounts have been reclassified to conform to the current year presentation.
d. Cash and Cash Equivalents
NSL considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents. As of November 30, 2013 and 2012, NSL had no cash equivalents.
e. Intangible Assets
Acquired intangible assets other than goodwill are amortized over their useful lives unless the lives are determined to be indefinite. Acquired intangible assets are carried at cost, less accumulated amortization. For intangible assets purchased in a business combination or received in a non-monetary exchange, the estimated fair values of the assets received (or, for non-monetary exchanges, the estimated fair values of the assets transferred if more clearly evident) are used to establish the cost bases, except when neither of the values of the assets received or the assets transferred in non-monetary exchanges are determinable within reasonable limits. Valuation techniques consistent with the market approach, income approach and/or cost approach are used to measure fair value. Amortization of finite-lived intangible assets is computed over the useful lives of the respective assets.
f. Impairment of Intangible assets
Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. We evaluate intangible assets to determine potential impairment by comparing the carrying amount to the undiscounted estimated future cash flows of the related assets.
g. Basic and Diluted Net Loss Per Share
NSL computes net loss per share in accordance with ASC 260, Earnings Per Share, which requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net loss available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. NSL had net losses as of November 30, 2013 and 2012, so the diluted EPS excluded all dilutive potential shares in the diluted EPS because there effect is anti-dilutive.
h. Financial Instruments
ASC 820, Fair Value Measurements (ASC 820) and ASC 825, Financial Instruments (ASC 825), requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. It establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. It prioritizes the inputs into three levels that may be used to measure fair value:
Level 1 - Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.
F-7
Level 2 - Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.
Level 3 - Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.
NSL’s financial instruments consist principally of cash, accounts payable, and accrued liabilities. Pursuant to ASC 820 and 825, the fair value of cash is determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets. The recorded values of all other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations.
The following table sets forth by level with the fair value hierarchy the Company’s financial assets and liabilities measured at fair value on November 30, 2013 and 2012:
November 30, 2013:
|
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
|
Assets
|
$ | - | $ | - | $ | - | $ | - | ||||||||
|
Liabilities
|
||||||||||||||||
|
Derivative financial instruments
|
$ | - | $ | - | $ | 90,699 | $ | 90,699 | ||||||||
November 30, 2012:
|
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
|
Assets
|
$ | - | $ | - | $ | - | $ | - | ||||||||
|
Liabilities
|
||||||||||||||||
|
Derivative financial instruments
|
$ | - | $ | - | $ | 54,062 | $ | 54,062 | ||||||||
i. Revenue Recognition
NSL recognizes revenue from the sale of discount offers and savings to consumers in accordance with ASC 605, Revenue Recognition. Revenue is recognized only when the price is fixed or determinable, persuasive evidence of an arrangement exists, the service is provided, and collectability is assured. NSL’s contracts typically contain provisions for (1) sale of discount certificates (2) web-site design and (3) web-site maintenance. NSL considers the web-site design and web-site maintenance to be inconsequential and perfunctory to the total arrangement and therefore recognized revenue upon delivery of the discount certificates.
j. Recent Accounting Pronouncements
NSL has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.
k. Income Taxes
The Company accounts for income taxes using the asset and liability approach. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amounts expected to be realized.
F-8
l. Accounting for Derivative Instruments
NSL accounts for derivative instruments in accordance with ASC Topic 815, Derivatives and Hedging and all derivative instruments are reflected as either assets or liabilities at fair value in the balance sheet.
NSL uses estimates of fair value to value its derivative instruments. Fair value is defined as the price to sell an asset or transfer a liability in an orderly transaction between willing and able market participants. In general, NSL’s policy in estimating fair values is to first look at observable market prices for identical assets and liabilities in active markets, where available. When these are not available, other inputs are used to model fair value such as prices of similar instruments, yield curves, volatilities, prepayment speeds, default rates and credit spreads (including for NSL’s liabilities), relying first on observable data from active markets. Additional adjustments may be made for factors including liquidity, credit, bid/offer spreads, etc., depending on current market conditions. Transaction costs are not included in the determination of fair value. When possible, NSL seeks to validate the model’s output to market transactions. Depending on the availability of observable inputs and prices, different valuation models could produce materially different fair value estimates. The values presented may not represent future fair values and may not be realizable. NSL categorizes its fair value estimates in accordance with ASC 820 based on the hierarchical framework associated with the three levels of price transparency utilized in measuring financial instruments at fair value as discussed above. As at November 30, 2013 and 2012, company had a $90,699 and $54,062 derivative liability, respectively.
m. Share-Based Compensation
The Company accounts for share-based compensation to employees in accordance with Accounting Standards Codification subtopic 718-10, Stock Compensation (“ASC 718-10”) and share-based compensation to non-employees in accordance with ASC 505. These require the measurement and recognition of compensation expense for all share-based payment awards, including stock options based on the estimated fair values.
3. Related Party Transactions
As of November 30, 2013 and 2012, NSL owed $144,328 and $50,828 to the President and CEO of NSL for back due wages, respectively.
As of November 30, 2013 and 2012, NSL owed $173,427 and $77,427 to the Vice President and director of NSL for back due wages, respectively.
4. Convertible Promissory Notes Payable
During the year ended November 30, 2011, NSL issued four Unsecured Convertible Promissory Notes (the “2011 Convertible Promissory Notes”) to the same entity in increments of $100,000, $499,952, $249,980 and $100,000, or a total of $949,932. The 2011 Convertible Promissory Notes were unsecured, due two years from the date of issuance, accrued interest at 10% per annum and were convertible into shares of NSL’s common stock at any time at the option of the holder at fifty percent (50%) of the fair market value of one share of NSL’s common stock based on the lowest bid during the ten days prior to the conversion date.
During the year ended November 30, 2012, the holders of the 2011 Convertible Promissory Notes elected to convert all of the outstanding principal of $949,932 and interest of $31,032 on the Notes into 871,968 shares of common stock, or $1.05 per share. As the conversion price was greater than the contractually obligated conversion price of $0.45 per share, NSL recorded a gain on extinguishment of debt and an offsetting reduction in paid-in capital based on the difference of the contractually stated conversion shares required to be issued and the actual number of shares issued upon conversion at the conversion date fair market value of $0.12 per share, or $3,072,147.
F-9
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.
During the year ended November 30, 2012, NSL issued two Unsecured Convertible Promissory Notes to Southridge Partners II, LP, a Delaware Limited Partnership (“Southridge”), a related party (the “2012 Southridge Convertible Promissory Notes”) in the amounts of $75,000 and $50,000, or a total of $125,000. The 2012 Southridge Convertible Promissory Notes are unsecured, due approximately three and nine months, respectively, from the dates of issuance, accrued interest at 8% per annum and are convertible, at the option of the holder, into shares of NSL’s common stock. The note in the amount of $75,000 is convertible into common shares at maturity and the note in the amount of $50,000 is convertible into common shares after 180 days from issuance at fifty five percent (55%) and seventy percent (70%), respectively, of the fair market value of one share of NSL’s common stock based on the average of the two lowest bid prices of NSL’s common stock during the five trading days prior to the conversion date. NSL paid $50,000 in legal fees associated with the funding of $75,000 convertible notes, these fees have been recorded as debt discount and have been amortized monthly through November 30, 2012.
During the year ended November 30, 2012, the holders of the 2012 Asher Convertible Promissory Notes and 2012 Southridge Convertible Promissory Notes elected to convert outstanding principal of $156,800 and interest of $6,467 into 13,475,799 shares of common stock, or $0.01 per share.
During the year ended November 30, 2013, the holders of the 2012 Asher Convertible Promissory Notes and 2012 Southridge Convertible Promissory Notes elected to convert outstanding principal of $131,300 and interest of $6,584 into 80,035,836 shares of common stock, or $0.0017 per share.
During the year ended November 30, 2013, NSL issued four Unsecured Convertible Promissory Notes (the “2013 Convertible Promissory Notes”) to the same entity in increments of $42,500, $10,900, $37,000 and $20,500, or a total of $110,900. The 2013 Convertible Promissory Notes were unsecured, due between eight and nine months from the date of issuance, accrue interest at 8% per annum and are convertible into shares of NSL’s common stock at any time at the option of the holder at discounts from market ranging from 35% and 41% of the fair market value of one share of NSL’s common stock based on the lowest bid during the ten days prior to the conversion date.
In addition to the $75,000 convertible note due to Southridge, NSL granted a stock warrant for 1,500,000 shares of its common stock with an exercise price of $0.05 per share on March 9, 2012. These warrants have a seven-year term and are fully vested on the grant date. On March 9, 2012, NSL determined the fair value of the warrants using the Black-Scholes pricing model for a total value of $86,100. The warrant has a relative fair market value of $19,405; this is accounted for as a discount on the convertible note. The discount was amortized over the life of loan (approx. 4 months) and was fully amortized as of November 30, 2013.
The fair value of the warrants was computed using the Black-Scholes pricing model with the following assumptions:
|
Expected Term
|
7 years
|
|||
|
Expected volatility
|
434.78 | % | ||
|
Risk free interest rate
|
1.43 | % | ||
|
Expected dividend yield
|
0.00 | % | ||
The warrants weighted average remaining contractual life for warrants outstanding as of November 30, 2013 is approximately 5.3 years; the weighted average exercise price is $0.75. The intrinsic value of the warrants is $0.00.
F-10
Due to their being no explicit limit to the number of shares to be delivered upon settlement of the above conversion options embedded in the Convertible Promissory Notes, the conversion options are deemed and classified as derivative liabilities and recorded at fair value.
A summary of changes in the above referenced convertible promissory notes payable for the year ended November 30, 2013 and 2012 is as follows:
|
Beginning balance at November 30, 2011
|
$ | - | ||
|
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 at November 30, 2012
|
$ | 132,581 | ||
|
Beginning balance at November 30, 2012
|
$ | 132,581 | ||
|
Issuance of notes payable
|
110,900 | |||
|
Less: debt discount from conversion options, warrants and fees
|
(103,400 | ) | ||
|
Add: amortization of discount
|
106,912 | |||
|
Less: conversions to common stock
|
(131,300 | ) | ||
|
Ending balance at November 30, 2013
|
$ | 115,693 |
5. Derivative Liabilities
NSL analyzed the conversion options embedded in the Convertible Promissory Notes for derivative accounting consideration under ASC 815, Derivatives and Hedging, and determined that the instruments embedded in the above referenced convertible promissory notes should be classified as liabilities and recorded at fair value due to their being no explicit limit to the number of shares to be delivered upon settlement of the conversion options. Additionally, the above referenced convertible promissory notes contain dilutive issuance clauses. Under these clauses, based on future issuances of NSL’s common stock or other convertible instruments, the conversion price of the above referenced convertible promissory notes can be adjusted downward. Because the number of shares to be issued upon settlement of the above referenced convertible promissory notes cannot be determined under this instrument, NSL cannot determine whether it will have sufficient authorized shares at a given date to settle any other future share instruments. The fair values of the instruments were determined using a Black-Scholes option-pricing model. Upon the issuance dates of the above referenced convertible promissory notes, $103,400 and $217,266 was recorded as debt discount and $94,210 and $44,356 was recorded as day one loss on derivative liability for the years ended November 30, 2013 and 2012, respectively.
During the year ended November 30, 2012, the company recorded $38,825 in derivative liability due to the warrants issued in connection with convertible promissory note.
During the year ended November 30, 2012, $156,800 of the 2012 Asher Convertible Promissory Notes and 2012 Southridge Convertible Promissory Notes were converted to common stock (see Note 5) and the related derivative liability was extinguished through a charge to paid-in capital. During the year ended November 30, 2012, NSL recognized a total gain on derivative liability of $11,686.
During the year ended November 30, 2013, $131,300 of the 2012 Asher Convertible Promissory Notes and 2012 Southridge Convertible Promissory Notes were converted to common stock (see Note 5) and the related derivative liability was extinguished through a charge to paid-in capital. During the year ended November 30, 2013, NSL recognized a total loss on derivative liability of $138,359.
NSL valued the 2012 conversion options derivatives using the Black-Scholes option-pricing model. Assumptions used include (1) risk-free interest rates between 0.07% to 0.73%, (2) lives of between 1.75 and 2.0 years, (3) expected volatility of between 628% to 688%, (4) zero expected dividends, (5) conversion prices as set forth in the Convertible Promissory notes, and (6) the common stock price of the underlying share on the valuation date.
F-11
NSL valued the 2013 conversion options derivatives using the Black-Scholes option-pricing model. Assumptions used include (1) risk-free interest rates between 0.04% to 0.11%, (2) lives of between 0.16 and 0.27 years, (3) expected volatility of between 11% to 227%, (4) zero expected dividends, (5) conversion prices as set forth in the Convertible Promissory notes, and (6) the common stock price of the underlying share on the valuation date.
The following table summarizes the derivative liabilities included in the balance sheet at November 30, 2013 and 2012:
|
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 | ||
|
|
||||
|
Conversion option derivative liabilities November 30, 2012
|
$ | 54,062 | ||
|
Addition of new conversion option derivatives
|
103,400 | |||
|
Reclassification of derivative liability to additional paid-in capital due to notes
payable conversions
|
(205,122 | ) | ||
|
Change in fair value
|
138,359 | |||
|
Balance at November 30, 2013
|
$ | 90,699 |
6. Property and Equipment
Property and equipment are carried at cost, less accumulated depreciation and includes expenditures that substantially increase the useful lives of existing assets. Maintenance and repairs are charged to current operations as incurred. Upon sale, retirement, or other disposition of these assets, the costs and related accumulated depreciation are removed from the respective accounts, and any gain or loss on the disposition is included in other income.
Depreciation expense is computed using the straight-line method over the following estimated useful lives:
|
Description
|
Useful Life
|
|
Computer equipment
|
5 years
|
|
Software
|
3 years
|
|
Furniture and fixtures
|
7 years
|
Depreciation expense for the years ended November 30, 2013 and 2012 was $12,557and $12,557, respectively.
7. Intangible Assets - Website Development Costs
NSL’s intangible website asset consist of licenses for the use of Internet domain names or Universal Resource Locators, capitalized website development costs, other information technology licenses and marketing and technology related intangibles. All such assets are capitalized at their original cost and amortized over their estimated useful of 5 years. The website was placed into service during July 2011.
During the fourth quarter of fiscal year 2013, NSL management performed an impairment review and determined that due to the lack of significant revenue generation and projected revenue generation, the website development costs should be fully impaired. As such, NSL recognized impairment expense of $45,175 during the year ended November 30, 2013.
Amortization expense for the years ended November 30, 2013 and 2012 was $11,785 and $15,713 respectively.
F-12
8. Income Taxes
NSL files income tax returns in the U.S. federal jurisdiction, and the state of Florida. NSL’s policy is to recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. Company’s income tax rate is 34% given there are no significant temporary or permanent differences between the financial statements and the income tax basis.
Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.
Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
|
Deferred tax asset
|
$ | 622,268 | 491,907 | |||||
|
Valuation allowance
|
(622,268 | ) | (491,907 | ) | ||||
|
Net deferred tax asset
|
$ | - | $ | - |
NSL had net operating losses of approximately $1,829,000 that expire 20 years from when incurred. Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carryforwards for Federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur, net operating loss carryforwards may be limited as to use in future years.
9. Equity
Common Stock
On January 17, 2012, the Company issued 133,333 shares of common stock to a consulting company for public relations services valued at $66,000, or $0.495 per share.
On March 29, 2012, the Company issued 190,476 shares of common stock to a consultant for services valued at $108,571, or $0.57 per share.
On May 12, 2012, the Company issued 333,333 shares of common stock to a consultant for services valued at $110,000, or $0.33 per share.
On June 29, 2012, the Company issued 433,333 shares of common stock to a consultant for services valued at $130,000, or $0.3 per share.
On July 20, 2012, the Company issued 74,074 shares of common stock for debt valued at $10,000, or $0.14 per share.
On July 31, 2012, the Company issued 160,000 shares of common stock for debt valued at $12,000, or $0.075 per share.
On August 9, 2012, the Company issued 400,000 shares of common stock for debt valued at $15,000, or $0.038 per share.
On August 23, 2012, the Company issued 666,667 shares of common stock to a consultant for services valued at $32,000, or $0.048 per share.
On August 23, 2012, the Company issued 1,397,384 shares of common stock for debt valued at $27,668 or $0.0198 per share.
F-13
On August 27, 2012, the Company issued 551,111 shares of common stock for debt valued at $12,660, or $0.023 per share.
On September 24, 2012, the Company issued 571,429 shares of common stock for debt valued at $12,000, or $0.021 per share.
On September 27, 2012, the Company issued 1,746,844 shares of common stock for debt valued at $25,950 and accrued interest of $2,152, or $0.016 per share.
On October 8, 2012, the Company issued 694,064 shares of common stock for debt valued at $7,600, or $0.011 per share.
On October 23, 2012, the Company issued 875,000 shares of common stock for debt valued at $6,300, or $0.0072 per share.
On November 5, 2012, the Company issued 1,415,626 shares of common stock for debt valued at $6,950 and accrued interest of $643, or $0.0054 per share.
On November 6, 2012, the Company issued 876,190 shares of common stock for debt valued at $4,600, or $0.005 per share.
On November 12, 2012, the Company issued 873,563 shares of common stock for debt valued at $3,800, or $0.0044 per share.
On November 19, 2012, the Company issued 2,045,209 shares of common stock for debt valued at $9,050 and accrued interest of $230, or $0.0045 per share.
On November 27, 2012, the Company issued 1,795,305 shares of common stock for debt valued at $6,550 and accrued interest of $115, or $0.0037 per share.
During the year ended November 30, 2012, due to conversion of convertible notes payable into common stock, the company wrote-off $190,340 in derivative liability associated with these notes.
During the year ended November 30, 2012, the company recorded $38,825 in derivative liability due to the warrants issued in connection with convertible promissory note.
On December 12, 2012, the Company issued 2,648,430 shares of common stock for $3,585 of debt and $2,970 of accrued interest, or $0.0025 per share.
On January 7, 2013, the Company issued 712,644 shares of common stock for $3,100 of debt, or $0.0043 per share.
On January 10, 2013, the Company issued 1,540,231 shares of common stock for $5,200 of debt and $1,500 of accrued interest, or $0.0043 per share.
On January 13, 2013, the Company issued 2,820,075 shares of common stock for $11,315 of debt and $318 of accrued interest, or $0.0043 per share.
On January 15, 2013, the Company issued 1,586,207 shares of common stock for $6,900 of debt, or $0.0041 per share.
On January 16, 2013, the Company issued 3,590,249 shares of common stock for $16,225 of debt and $66 of accrued interest, or $0.0043 per share.
F-14
On January 29, 2013, the Company issued 3,592,881 shares of common stock for $11,725 of debt and $132 of accrued interest, or $0.0033 per share.
On January 30, 2013, the Company issued 1,565,218 shares of common stock for $5,400 of debt, or $0.0034 per share.
On February 13, 2013, the Company issued 2,928,740 shares of common stock for $7,150 of debt and $99 of accrued interest, or $0.0025 per share.
On February 20, 2013, the Company issued 1,568,628 shares of common stock for $4,000 of debt, or $0.0025 per share.
On March 20, 2013, the Company issued 2,549,027 shares of common stock for $6,500 of debt, or $0.0026 per share.
On April 2, 2013, the Company issued 2,500,000 shares of common stock for $4,500 of debt, or $0.0018 per share.
On April 22, 2013, the Company issued 2,777,778 shares of common stock for $5,000 of debt, or $0.0018 per share.
On June 13, 2013, the Company issued 2,909,090 shares of common stock for $1,700 of debt and $1,500 of accrued interest, or $0.0011 per share.
On June 21, 2013, the Company issued 2,933,333 shares of common stock for $4,000 of debt, or $0.0014 per share.
On July 8, 2013, the Company issued 3,000,000 shares of common stock for $3,600 of debt, or $0.0012 per share.
On July 22, 2013, the Company issued 2,916,667 shares of common stock for $3,500 of debt, or $0.0012 per share.
On July 31, 2013, the Company issued 3,440,860 shares of common stock for $3,200 of debt, or $0.0009 per share.
On August 7, 2013, the Company issued 2,977,528 shares of common stock for $2,650 of debt, or $0.0009 per share.
On August 16, 2013, the Company issued 3,500,000 shares of common stock for $2,450 of debt, or $0.0007 per share.
On September 10, 2013, the Company issued 3,456,790 shares of common stock for $2,800 of debt, or $0.00081 per share.
On September 25, 2013, the Company issued 3,500,000 shares of common stock for $2,450 of debt, or $0.0007 per share.
On September 30, 2013, the Company issued 3,500,000 shares of common stock for $2,450 of debt, or $0.0007 per share.
On October 7, 2013, the Company issued 3,448,276 shares of common stock for $2,000 of debt, or $0.0006 per share.
On October 21, 2013, the Company issued 4,714,286 shares of common stock for $3,300 of debt, or $0.0007 per share.
On November 6, 2013, the Company issued 4,691,358 shares of common stock for $3,800 of debt, or $0.0008 per share.
On November 21, 2013, the Company issued 4,667,540 shares of common stock for $2,800 of debt, or $0.0006 per share.
F-15
During the year ended November 30, 2013, due to conversion of convertible notes payable into common stock, the company wrote-off $205,122 in derivative liability associated with these notes.
Effective March 15, 2013, the Company executed at 15-for-1 reverse split of its common stock. The effect of the reverse split has been shown retrospectively for all references to issuances of common stock in the financial statements and these footnotes.
Series A Preferred Stock
During June 2012, NSL amended its articles of incorporation to include 100,000,000 shares of $0.0001 par value Series A Preferred Stock. The Series A Preferred Stock has no dividend rights and in the event of liquidation, holders of Series A Preferred Stock will be entitled to receive, before any payment or distribution on the common stock or any other class of stock junior to Series A Preferred Stock upon liquidation, a distribution per share in the amount of the liquidation preference, if any, fixed or determined in accordance with the terms of such preferred stock plus, if so provided in such terms, an amount per share equal to accumulated and unpaid dividends in respect of such preferred stock (whether or not earned or declared) to the date of such distribution. Neither the sale, lease, or exchange of all or substantially all of our property and assets, nor any consolidation or merger, shall be deemed to be a liquidation.
On June 19, 2012, the Company issued a total of 300,000 shares of preferred stock for past due wages valued at $500, or $0.0017 per share.
On August 30, 2012, the Company issued a total of 1,200,000 shares of preferred stock for past due wages valued at $2,000, or $0.0017 per share.
10. Subsequent Events
On December 11, 2013, the Company issued 4,695,652 shares of common stock for $2,160 of debt, or $0.00046 per share.
On December 17, 2013, the Company issued 4,696,970 shares of common stock for $1,550 of debt, or $0.00033 per share.
On December 23, 2013, the Company issued 4,696,970 shares of common stock for $1,550 of debt, or $0.00033 per share.
On December 30, 2013, the Company issued 4,696,970 shares of common stock for $1,550 of debt, or $0.00033 per share.
On January 15, 2014, the Company issued 3,809,091 shares of common stock for $2,190 of debt and $2,000 of accrued interest, or $0.00110 per share.
On January 23, 2014, the Company issued 4,693,878 shares of common stock for $2,300 of debt, or $0.00049 per share.
On January 28, 2014, the Company issued 4,693,878 shares of common stock for $2,300 of debt, or $0.00049 per share.
On February 20, 2014, the Company issued 4,689,655 shares of common stock for $1,360 of debt, or $0.00029 per share.
F-16
There have been no changes or disagreements with our auditors during the past two years.
Evaluation of disclosure controls and procedures
Pursuant to Rule 13a-15(b) under the 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) 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 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, due to the material weaknesses identified below.
- Lack of proper segregation of duties due to limited personnel
- Lack of a formal review process that includes multiple levels of review
It should be noted that any system of controls, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system are met. In addition, the design of any control system is based in part upon certain assumptions about the likelihood of future events. Because of these and other inherent limitations of control systems, there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
Report of Management on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as that term is defined in Rule 13a-15(f) under the Exchange Act. Under the supervision and with the participation of our management, including our principal executive and principal financial officer, we assessed, as of November 30, 2013, the effectiveness of our internal control over financial reporting. This assessment was based on criteria established in the framework in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our assessment using those criteria, management concluded that our internal control over financial reporting as of November 30, 2013, was not effective.
Internal control over financial reporting is defined as a process designed by, or under the supervision of, our principal executive and principal financial officers and effected by our board of directors, management and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles, and includes those policies and procedures that:
|
-
|
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;
|
|
-
|
provide reasonable assurance that transactions are recorded as necessary to permit the preparation of financial statements in accordance with U.S. generally accepted accounting principles and that our receipts and expenditures are being made only in accordance with authorization of our management and directors; and
|
|
-
|
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.
|
A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the internal control system are met. Because of the inherent limitations of any internal control system, no evaluation of controls can provide absolute assurance that all control issues, if any, within a company have been detected.
This Annual Report on Form 10-K does not include an attestation report of the Company’s independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s independent registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this Annual Report on Form 10-K.
We are in the continuous process of improving our internal control over financial reporting in an effort to eliminate these material weaknesses through improved supervision and training of our staff, but additional effort is needed to fully remedy these deficiencies. Management has engaged a Certified Public Accountant as a consultant to assist with the financial reporting process in an effort to mitigate some of the identified weaknesses. This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting.
Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this annual report.
Changes in Internal Controls
There were no changes in our internal control over financial reporting during the quarter ended November 30, 2013 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
None.
Our executive officers and directors and his age and titles are as follows:
|
Name
|
Age
|
Position
|
|
David Saltrelli
|
64
|
CEO, CFO, President, and Director
|
|
Peter Schuster
|
66
|
Secretary, Treasurer and Director
|
|
Jon Wallen
|
39
|
Director
|
Set forth below is a brief description of the background and business experience of our officers and directors:
David Saltrelli: David Saltrelli holds a MBA from the Simon School of Business at the University of Rochester where he majored in Finance & Economics. Mr. Saltrelli has served with the Investment Firms of Merrill Lynch and Prudential Bache. Mr. Saltrelli later became a developer/marketer of Fractional Condominium Ownership as President of Pantra Investments. He went on to build direct marketing companies that provided marketing services for many companies including direct mail programs and premium/incentive programs. From August 2006 to January 2010 Mr. Saltrelli was in charge of sales at Awards & Incentives Inc., a web based
marketing and sales company located in Clearwater Beach, Fl that developed and delivered electronic premiums and incentives to large commercial entities, organizations and affiliate groups requiring high volume lead generation and sales volume. From November 2009 to present day, Mr. Saltrelli has been the President of Net Savings Link, Inc. and he handles all aspects of business, sales & reporting at the company. Mr. Saltrelli has been a member of the Board of Directors since November 2009.
Peter Schuster: Peter Schuster holds a Master’s Degree from the State University of New York. From 2006 to 2010, Mr. Schuster served as President of Awards and Incentives Inc., a web based marketing and sales company located in Clearwater Beach, Fl that developed and delivered electronic premiums and incentives to large commercial entities, organizations and affiliate groups requiring high volume lead generation and sales volume. From 2002 to 2006, Mr. Schuster served as a Commercial Realtor focused specifically on the marketing, development, entitlement and sales of large commercial marina operations, commercial land sites targeted for high-rise mixed use development and conversion of existing hospitality properties to mixed and fractional commercial use. From February 2010 to present day Mr. Schuster has served as the Secretary / Treasurer for Net Savings Link, Inc. where he handles all accounting, filings and planning for the company. Mr. Schuster has been a member of the Board of Directors since February 2010.
Jon Wallen: Since June 2012, Jon Wallen has been a member of our board of directors. Since 2005, Mr. Wallen established and has been the sole owner of Wallen Web Services located in Defiance, Ohio, a provider of custom programming, Internet and web based development services to the business and IT community markets. From 1997 to 2005, Mr. Wallen was an Independent Web Developer and Provider of Web Hosting Services Author of a popular open-source shopping cart application CF Shopkart. From August 1993 to November 1997, he was in the United States Navy. His initial training in computer based skills and basic programming provided courtesy of the United States Navy. Mr. Wallen’s skills further developed with additional training and applied in various administrative staff support functions during four year tour of duty at the Naval Recruit Training Command Base, culminating in honorable discharge.
Involvement in Certain Legal Proceedings
During the past ten years, Mssrs. Saltrelli, Schuster and Wallen have not been the subject of the following events:
|
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.
|
|
Term of Office
Our directors are appointed for a one-year term to hold office until the next annual general meeting of our stockholders or until removed from office in accordance with our Bylaws. Our officers are appointed by our board of directors and hold office until removed by the board.
Significant Employees
We have no significant employees other than our officers and directors.
Audit Committee
We are not a listed issuer and as such our Board of Directors is not required to maintain a separately-designated standing audit committee. As a result, our entire Board of Directors acts as our audit committee. Our sole director does not meet the definition of an “audit committee financial expert.” We believe that the cost related to appointing a financial expert to our Board of Directors at this time is prohibitive.
Compliance with Section 16 of the Securities Exchange Act
Section 16(a) of the Exchange Act requires our executive officers and directors, and persons who beneficially own more than 10% of our equity securities (collectively, the “reporting persons”), to file reports of ownership and changes in ownership with the SEC. Reporting persons are required by SEC regulation to furnish us with copies of all forms they file pursuant to Section 16(a). Based on our review of the copies of such forms received by us for the period ending November 30, 2012, other than as described below, no other reports were required for those persons other than Jon Wallen who was required to file a Form 3 when he was appointed to the board of directors on June 19, 2102. As of the date of this report Mr. Wallen has not filed a Form 3 and is delinquent with respect to such filing.
ITEM 11. EXECUTIVE COMPENSATION.
Summary Compensation Table
The following table sets forth total compensation paid to or earned by our named executive officers, for the last two fiscal years. Our fiscal year end is November 30.
|
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
|
($)
|
($)
|
($)
|
($)
|
($)
|
($)
|
($)
|
($)
|
|
David Saltrelli
|
2013
|
96,000
|
0
|
0
|
0
|
0
|
0
|
0
|
96,000
|
|
CEO, CFO, President
|
2012
|
72,997
|
0
|
0
|
0
|
0
|
0
|
0
|
72,997
|
|
Peter Schuster
|
2013
|
96,000
|
0
|
0
|
0
|
0
|
0
|
0
|
96,000
|
|
Secretary & Treasurer
|
2012
|
48,000
|
0
|
0
|
0
|
0
|
0
|
0
|
48,000
|
Outstanding Equity Awards at Fiscal Year End
As at our year ended November 30, 2013, we did not have any outstanding equity awards and have not had any since our inception.
Equity Compensation Plans
We have no equity compensation plans (including individual compensation arrangements) under which our equity securities are authorized for issuance.
Employment Contracts
We have no current employment contracts with any of our officers, directors or employees.
Directors Information
The following table sets forth information with respect to compensation paid by us to our directors during the 2013 completed fiscal year. Our fiscal year end is November 30.
Directors’ Compensation Table
|
Nonqualified
|
|||||||
|
Fees Earned
|
Non-Equity
|
Deferred
|
|||||
|
or
|
Stock
|
Option
|
Incentive Plan
|
Compensation
|
All Other
|
||
|
Paid in Cash
|
Awards
|
Awards
|
Compensation
|
Earnings
|
Compensation
|
Total
|
|
|
Name
|
(US$)
|
(US$)
|
(US$)
|
(US$)
|
(US$)
|
(US$)
|
(US$)
|
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
|
David Saltrelli
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|
Peter Schuster
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|
Jon Wallen
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
All compensation received by our directors has been disclosed.
There are no stock option, retirement, pension, or profit sharing plans for the benefit of our officers and directors.
We have no plans to pay any salaries to anyone until sufficient financing is available.
Long-Term Incentive Plan Awards
We not have any long-term incentive plans that provide compensation intended to serve as incentive for performance.
As of the date hereof, we have not entered into employment contracts with our sole officer and do not intend to enter into any employment contracts until such time as it profitable to do so.
Indemnification
Under our Bylaws, we may indemnify an officer or director who is made a party to any proceeding, including a law suit, because of his position, if he acted in good faith and in a manner he reasonably believed to be in our best interest. We may advance expenses incurred in defending a proceeding. To the extent that the officer or director is successful on the merits in a proceeding as to which he is to be indemnified, we must indemnify him against all expenses incurred, including attorney’s fees. With respect to a derivative action, indemnity may be made only for expenses actually and reasonably incurred in defending the proceeding, and if the officer or director is judged liable, only by a court order. The indemnification is intended to be to the fullest extent permitted by the laws of the State of Nevada.
Regarding indemnification for liabilities arising under the Securities Act of 1933, which may be permitted to directors or officers under Nevada law, we are informed that, in the opinion of the Securities and Exchange Commission, indemnification is against public policy, as expressed in the Act and is, therefore, unenforceable.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
|
Equity Compensation Plans
We have no equity compensation plans (including individual compensation arrangements) under which our equity securities are authorized for issuance.
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth, as of the date of this report, the total number of shares owned beneficially by our officers, directors, both individually and as a group, and the beneficial owners of 5% or more of our total outstanding shares on February 28, 2014. The stockholder listed below has direct ownership of his/her shares and possess voting and dispositive power with respect to the shares.
|
Name and Address
|
Number of
|
Percentage of
|
Number of
|
Percentage of
|
|
Beneficial Owner
|
Common Shares
|
Ownership
|
Preferred Shares
|
Ownership
|
|
David Saltrelli
|
3,600,000
|
7.04%
|
750,000
|
50.00%
|
|
Peter Schuster
|
3,600,000
|
7.04%
|
750,000
|
50.00%
|
|
Jon Wallen
|
0
|
0.00%
|
0
|
0.00%
|
|
All officers and directors as a group
(3 individuals)
|
7,200,000
|
14.08%
|
1,500,000
|
100.00%
|
On August 6, 2012, we filed a Certificate of Designation with the Nevada Secretary of State, which designated 100,000,000 shares of preferred stock as “Series A Preferred Stock”. Each share of Series A Preferred Stock has 1,000 votes. During August 2012, we issued a total of 1,500,000 shares of Series A Preferred Stock to Messrs. Saltrelli and Schuster. Accordingly, with 766,633,114 shares of common stock outstanding as of March 15, 2013, Messrs. Saltrelli and Schuster have 1,608,000,000 votes on any issued presented to the shareholders and accordingly have the ability to control the outcome of any issue presented to shareholders. The Company shall not, without the affirmative vote or written consent of the holders of at least a majority of the outstanding Series A Preferred Stock (i) authorize or create any additional series of stock ranking prior to or on a parity with the Series A Preferred Stock as to dividends, voting rights, or the distribution of assets upon liquidation, or (ii) change any of the rights, privileges or preferences of the Series A Preferred Stock. Further, the holders of the Series A Preferred Stock and the Company’s common stock shall vote as a single class on all matters submitted to stockholders, subject to the common shares having 1 vote per share and the Series A Preferred shares, each having 1,000 votes per share.
Except as described below, none of the following parties has, since our date of incorporation, had any material interest, direct or indirect, in any transaction with us or in any presently proposed transaction that has or will materially affect us, other than noted in this section:
|
(i)
|
Any of our directors or officers;
|
|
|
(ii)
|
Any person proposed as a nominee for election as a director;
|
|
|
(iii)
|
Any person who beneficially owns, directly or indirectly, shares carrying more than 10% of the voting rights attached to our outstanding shares of common stock;
|
|
|
(iv)
|
Any of our promoters; and
|
|
|
(v)
|
Any relative or spouse of any of the foregoing persons who has the same house as such person.
|
We issued 3,000,000 total shares of common stock at a price of $0.001 per share to Andre Benard, who was our executive officer and director for the sum of $3,000. The shares were transferred to incoming President and Director David Saltrelli, and then split on the basis of 15 for 1. Mr. Satrelli subsequently distributed the total shares equally with incoming Secretary/Treasurer and Director, Peter Schuster.
The shares were issued pursuant to Section 4(a)(2) of the Securities Act and are restricted shares as defined in the Securities Act.
Audit Fees
The aggregate fees billed for the two most recently completed fiscal years ended November 30, 2011 and 2010 for professional services rendered by the principal accountant for the audit of our annual financial statements and review of the financial statements included our Quarterly Reports on Form 10-Q and services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for these fiscal periods were as follows:
|
Year Ended November 30, 2013
|
Year Ended November 30, 2012
|
|
|
Audit Fees
|
$30,000
|
$35,000
|
|
Audit Related Fees
|
0
|
0
|
|
Tax Fees
|
0
|
0
|
|
All Other Fees
|
0
|
0
|
|
TOTAL
|
$30,000
|
$35,000
|
PART IV
|
Incorporated by reference
|
Filed
|
||||
|
Exhibit
|
Document Description
|
Form
|
Date
|
Number
|
herewith
|
|
3.1
|
Articles of Incorporation.
|
S-1
|
6/09/08
|
3.1
|
|
|
3.2
|
Bylaws.
|
S-1
|
6/09/08
|
3.2
|
|
|
3.3
|
Amended Articles of Incorporation.
|
8-K
|
8/06/12
|
3.1
|
|
|
4.1
|
Specimen Stock Certificate.
|
S-1
|
6/09/08
|
4.1
|
|
|
10.1
|
Employment Agreement with David Saltrelli.
|
8-K
|
3/10/10
|
10.1
|
|
|
10.2
|
Employment Agreement with Peter Schuster.
|
8-K
|
3/10/10
|
10.2
|
|
|
10.3
|
Equity Purchase Agreement with Southridge Partners II, LP.
|
10-Q
|
4/23/12
|
10.3
|
|
|
14.1
|
Code of Ethics.
|
S-1
|
6/09/08
|
14.1
|
|
|
23.1
|
Consent of MaloneBailey, LLP.
|
X
|
|||
|
31.1
|
Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
X
|
|||
|
32.1
|
Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
X
|
|||
|
99.1
|
Certificate of Designation.
|
8-K
|
8/06/12
|
99.1
|
|
|
101.INS
|
XBRL Instance Document.
|
X
|
|||
|
101.SCH
|
XBRL Taxonomy Extension – Schema.
|
X
|
|||
|
101.CAL
|
XBRL Taxonomy Extension – Calculations.
|
X
|
|||
|
101.DEF
|
XBRL Taxonomy Extension – Definitions.
|
X
|
|||
|
101.LAB
|
XBRL Taxonomy Extension – Labels.
|
X
|
|||
|
101.PRE
|
XBRL Taxonomy Extension – Presentation.
|
X
|
|||
Pursuant to the requirements of Section 13 or 15(d) 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 on this 17th day of March, 2014.
|
NET SAVINGS LINK, INC.
|
||
|
BY:
|
DAVID SALTRELLI
|
|
|
David Saltrelli
|
||
|
President, Principal Executive Officer, Principal Financial Officer, Principal Accounting Officer and a member of the Board of Directors
|
||
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
|
Signature
|
Title
|
Date
|
|
DAVID SALTRELLI
|
President, Principal Executive Officer, Principal
|
March 17, 2014
|
|
David Saltrelli
|
Financial Officer, Principal Accounting Officer, and a member of the Board of Directors.
|
|
|
PETER SCHUSTER
|
Secretary, Treasurer and a member of the Board
|
March 17, 2014
|
|
Peter Schuster
|
of Directors
|
|
|
JON WALLEN
|
Member of the Board of Directors
|
March 17, 2014
|
|
Jon Wallen
|
|
Incorporated by reference
|
Filed
|
||||
|
Exhibit
|
Document Description
|
Form
|
Date
|
Number
|
herewith
|
|
3.1
|
Articles of Incorporation.
|
S-1
|
6/09/08
|
3.1
|
|
|
3.2
|
Bylaws.
|
S-1
|
6/09/08
|
3.2
|
|
|
3.3
|
Amended Articles of Incorporation.
|
8-K
|
8/06/12
|
3.1
|
|
|
4.1
|
Specimen Stock Certificate.
|
S-1
|
6/09/08
|
4.1
|
|
|
10.1
|
Employment Agreement with David Saltrelli.
|
8-K
|
3/10/10
|
10.1
|
|
|
10.2
|
Employment Agreement with Peter Schuster.
|
8-K
|
3/10/10
|
10.2
|
|
|
10.3
|
Equity Purchase Agreement with Southridge Partners II, LP.
|
10-Q
|
4/23/12
|
10.3
|
|
|
14.1
|
Code of Ethics.
|
S-1
|
6/09/08
|
14.1
|
|
|
23.1
|
Consent of MaloneBailey, LLP.
|
X
|
|||
|
31.1
|
Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
X
|
|||
|
32.1
|
Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
X
|
|||
|
99.1
|
Certificate of Designation.
|
8-K
|
8/06/12
|
99.1
|
|
|
101.INS
|
XBRL Instance Document.
|
X
|
|||
|
101.SCH
|
XBRL Taxonomy Extension – Schema.
|
X
|
|||
|
101.CAL
|
XBRL Taxonomy Extension – Calculations.
|
X
|
|||
|
101.DEF
|
XBRL Taxonomy Extension – Definitions.
|
X
|
|||
|
101.LAB
|
XBRL Taxonomy Extension – Labels.
|
X
|
|||
|
101.PRE
|
XBRL Taxonomy Extension – Presentation.
|
X
|
|||
-36-