ALDS 10-K & 10-Q changes, risk factors and insider trading
APPlife Digital Solutions Inc · OTC · Retail-Auto & Home Supply Stores · CIK 1755101 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
An investment in our common stock involves a high degree of risk. You should carefully consider the following risks and all of the other information contained in this Annual Report before deciding whether to invest in our common stock. If any of the following risks are realized, our business, financial condition and results of operations could be materially and adversely affected. In that event, the trading price of our common stock could decline, and you could lose all or part of your investment in our common stock. Additional risks of which we are not presently aware or that we currently believe are immaterial may also harm our business and results of operations. Some statements in this Annual Report, including such statements in the following risk factors, constitute forward-looking statements. See the section entitled “Cautionary Note Regarding Forward-Looking Statements.”
Largest changes
“An investment in our common stock involves a high degree of risk. You should carefully consider the following risks and all of the other information contained in this Annual Report before deciding whether to invest in our common stock. If any of the following risks are realized, our business, financial condition and results of operations could be materially and adversely affected. In that event, the trading price of our common stock could decline, and you could lose all or part of your investment in our common stock. …”see in full comparison
Full comparison: every changed paragraph (1)
An investment in our common stock involves a high degree of risk. You should carefully consider the following risks and all of the other information contained in this Annual Report before deciding whether to invest in our common stock. If any of the following risks are realized, our business, financial condition and results of operations could be materially and adversely affected. In that event, the trading price of our common stock could decline, and you could lose all or part of your investment in our common stock. Additional risks of which we are not presently aware or that we currently believe are immaterial may also harm our business and results of operations. Some statements in this Annual Report, including such statements in the following risk factors, constitute forward-looking statements. See the section entitled “Cautionary Note Regarding Forward-Looking Statements.”
Management's Discussion & Analysis (MD&A)
New heading “Reverse Merger with Sugar Auto Parts, Inc.”
New heading “Business combination”
Removed heading “Professional Fees”
Largest changes
“Lollipop NFT will have a new name and will now be known as Valida. We have changed the model initially presented for Lollipop. Formerly an online marketplace, consignment store, creator platform, and wallet, it is now intended to be what we call a super wallet. It is non-custodial and will be able to be connected through API directly to various marketplaces of the user’s choice. We will focus on storing and sharing of NFTs that represent practical use. For example, we will focus on Driver’s licenses, Diplomas, Real Estate escrow documents and title. …”see in full comparison
“The Company applies the provisions of ASC 805, “Business Combination” and allocates the fair value of purchase consideration to the tangible assets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Goodwill generated from a business combination is primarily attributable to synergies.”see in full comparison
“Professional fees were $223,103 and $226,783 for the years ended June 30, 2024 and 2023, respectively. The Company generally expects professional fee costs to increase as the Company is a public reporting company with the Securities and Exchange Commission, which requires that it maintain relationships with both PCAOB registered audit firms and securities counsel to assist with the SEC reporting requirements.”see in full comparison
“Our marketing and business management/executive team operates from both Shanghai China, New York, and in San Francisco. Matt Reid is technically the only employee of the Company, and he resides in Shanghai, China, Matt Reid manages the independent contractor teams of developers the Company hires. We have engaged an attorney in Shanghai engaged to help us with the contracts and negotiations with developers and other similar items. We have multiple independent contractor team members for the Company that live and work in the US who make up our business management and executive teams. …”see in full comparison
Full comparison: every changed paragraph (51)
The following discussion of our plan of operation should be read in conjunction with the financial statements and related notes that appear elsewhere in this prospectus. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those discussed in “Risk Factors” beginning on page 18 of this prospectus. All forward-looking statements speak only as of the date on which they are made. We undertake no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they are made.
APPlife Digital Solutions, Inc. (the “Company” or “Applife”) was formed March 5, 2018, in Nevada. The Company’s main operating subsidiary, Sugar Auto Parts, Inc. (“SAP”) is a Nevada corporation formed on January 6, 2025, by Mammoth Crest Capital, LLC, a Wyoming corporation that is 50% owned by Michael Hill and Barrett Evans. The Company is headquartered at 701 Anacapa St., Suite C, Santa Barbara, CA 93101. SAP operates primarily as an aftermarket automotive parts e-commerce business, specializing in online sales of suspension lift systems and related accessories through its flagship ecommerce platform. The Company serves customers across the United States, offering a wide selection of products for Jeep, truck, and SUV owners.
Reverse Merger with Sugar Auto Parts, Inc.
On June 13, 2025, SAP became a wholly-owned subsidiary of Applife.
APPlife Digital Solutions, Inc. (the “Company”) was formed March 5, 2018, in Nevada and has offices in San Francisco, California and Shanghai, China. Our office in San Francisco, California allows us to take advantage of the marketing opportunities available in the United States as well as keeping close proximity to sources of capital whether it is debt or equity. Our offices in Shanghai, China allows us to take advantage of a high concentration of skilled tech coders and developers at lower capital costs than in more developed countries such as the United States or Europe. The Company’s mission is using digital technology to create and invest in eCommerce and Cloud based businesses that make life, business and living easier, more efficient, and just smarter.
Applife operates with a streamlined executive team led by Michael Hill and Barrett Evans, with all management and business operations based in the United States. We rely on its executive leadership and a network of independent contractors and professional service providers for business management, accounting, legal, and investor relations functions. All executive and management functions are located in Nevada and California, and there are no employees or contractors located internationally. We generate all of our revenue from our ecommerce platform serving U.S. customers. We have no current plans to develop operations outside the United States.
Our business model is focused on expanding our ecommerce operations, strengthening our product offerings, and pursuing strategic acquisitions that align with our vision for growth. We will continue to explore new opportunities to invest in projects and partnerships that can enhance our market position and revenue streams. Capital raised will be allocated to marketing, acquisitions, and revenue generation initiatives.
We are committed to building value through operational efficiency, targeted marketing, and strategic partnerships. We seek acquisition targets that fit our vision and areas of interest, are currently generating revenue with room for growth, and have strong management teams that will remain in place post-acquisition.
Our marketing and business management/executive team operates from both Shanghai China, New York, and in San Francisco. Matt Reid is technically the only employee of the Company, and he resides in Shanghai, China, Matt Reid manages the independent contractor teams of developers the Company hires. We have engaged an attorney in Shanghai engaged to help us with the contracts and negotiations with developers and other similar items. We have multiple independent contractor team members for the Company that live and work in the US who make up our business management and executive teams. We generate no revenue in China. Our independent contractors fill positions such as Chief Legal Officer, Executive Project Director, Accountant and Investor relations manager and are all located in New York. Our Director of Marketing, PR agent and multiple lower-level independent contractors reside and work in California. Currently 100% of our revenue comes from an ecommerce platform servicing US customers and there are no current plans to buy or develop any new Chinese based business models.
We will continue to explore new concepts and opportunities to invest in projects that meet our criteria We have incurred expenses and operating losses, as part of our activities in developing e-commerce platforms, B2BCHX, OFFICEHOP, ROOSTER ESSENTIALS, Valida and Global Hemp Service LLC. The capital we raise will go into marketing, acquisitions, and revenue generation. We believe this will take our vision forward and to the next level.
The APPlife Digital Solutions business model is two-fold. First, is to market our current in-house developed projects ecommerce and cloud based business over the next year, work to add partnerships and to add additional in-house developed projects. We plan to engage multiple resources such as adding staff, create partnerships, and as capital becomes available, to market and grow revenue.
The second, but equally important part of our business model is to target acquisitions and projects that can be assisted by our marketing and capitalization capabilities where we can play an active role in the project’s success and make the acquisitions to add to our revenue stream. We seek acquisition targets that have a model that fits our vision and area of interest, is currently generating revenue with room for growth and a strong management team that will stay on board and continue to operate the entity post-acquisition. We have signed an asset purchase agreement to buy the assets around the operations of an online beauty company with revenue.
Our current projects:
B2BCHX is our first fully developed app that is available in Google Play and a functioning ecommerce and mobile website. B2BCHX allows business owners around the world to order three levels of background checks in English on Chinese companies to prevent fraudulent business transactions, to gather information in order to gain confidence when doing business with a Chinese entity or to pursue legal remedy against fraudulent Chinese Company. The reports are researched and written by a licensed law firm in Shanghai China in a partnership agreement with B2BCHX. These reports are not auto generated and are carefully researched to give our users the most accurate information. The retail price for each report is $79, $399 and $1299. The partnership with the law firm is on a 20% revenue share, which leaves B2BCHX an 80% per report profit margin to cover development expenses, maintenance and profit. We are waiting for a temporary law change that will allow the attorney to send information on Chinese entities overseas.
ROOSTER ESSENTIALS ecommerce website, has been operations in the third quarter of fiscal year 2020 and launched its full commercial operations in the second quarter of 2022. ROOSTER ESSENTIALS is an online men’s grooming supply store, and it allows men to fully customize which products they receive and set up an auto-delivery schedule for each product for automatic recurring delivery. ROOSTER ESSENTIALS currently carries over 200 products from over 80 brands. We anticipate the sources of revenue will come from purchases, advertising and sponsorships.
OFFICE HOP entered beta testing in the fourth quarter of 2021 and is now fully functional. We believe OFFICE HOP fits perfectly into the needs of the post Covid working world, where short-term offices and meeting rooms will be in high demand. The OFFICE HOP model is like Airbnb for short term shared or private office space and meeting rooms. Those offices that have an extra office, shared desk, an empty meeting room or conference room may list the space and act as a host for a user. Those users in need of a short-term shared desk, meeting room or private office may locate one on our platform and rent it out for use as needed by the hour, half day, full day, week or month. We will also offer access to creative spaces such as photo studios and pop-up art galleries and will offer restaurants with private rooms a way to rent out the space with a menu included for group or lunch meetings. The revenue is expected to come from the 10-15% service fee charged to Users for finding and making a transaction with one of our listed properties. The platform is global. We will begin operations in North America and Europe and then eventually operate in South America and Asia.
Global Hemp Services LLC is a low risk and low-cost participation in the fast growing Hemp and CBD market space. We have licensed out our fully functional ecommerce platform in exchange for a 15% equity position and 2.5% revenue share, with exclusive rights to purchase an additional 36% of the equity (for a total of 51%) upon reaching revenue benchmarks. Global Hemp Service LLC distributes Hemp and CBD products globally, including Hemp based building materials, textiles, plastics, paper, personal care items and various CBD products. They will distribute wholesale to shops and stores and retail directly to consumers.
Lollipop NFT will have a new name and will now be known as Valida. We have changed the model initially presented for Lollipop. Formerly an online marketplace, consignment store, creator platform, and wallet, it is now intended to be what we call a super wallet. It is non-custodial and will be able to be connected through API directly to various marketplaces of the user’s choice. We will focus on storing and sharing of NFTs that represent practical use. For example, we will focus on Driver’s licenses, Diplomas, Real Estate escrow documents and title. The storage and ability to reference these valuable NFT documents as well as collections of NFT for storage will be available as the core model. The wallet will be a digital wallet, with cold storage for security. Once completed the system code will be audited by a third-party auditor and there will be multiple security daemons to monitor account login and asset transfers to protect the user. We have completed the design and preliminary development phase of this project, but have not yet begun writing the code. We plan to use the Polygon blockchain to create the wallet and have also lined up tech support with Polygon. We anticipate having a cold wallet system that allows the users to transfer between storage and active modes and plan to include 2FA, fingerprint and/or facial recognition technology. We plan to have multiple additional security daemons that review account holdings and prevent unauthorized transfers and withdrawals, however we may be liable for any cybersecurity breach resulting in the loss of customer assets. We plan to have multiple additional security daemons that review account holdings and prevent unauthorized transfers and withdrawals. The main focus of our user base will be practical use NFTs. We believe this is the future best use scenario for NFTs. This is what we believe will set us apart from those systems designed to buy and sell digital art and items that may be considered securities. We expect users to store their important documents and certifications in files. An example is we will allow universities to bulk upload diplomas into the system that will be an image of the certificate with the graduate’s name in place. The Meta Data will show in a border area that discloses the name of the University, the degree, date of issue and an official University stamp. The User will have the option of receiving the NFT version by registering and then using a code provided by the school to download the diploma NFT into the wallet. This would also apply to Driver’s licenses issued by State DMVs, Real Estate Broker licenses, Wills and other important legal documents, Escrow or Title paperwork. We are not intending on blocking people from storing other types of NFTs, but our format and storage UI is not appealing to those collecting digital art. Our interface will resemble a windows filing system. It is tailored to cater to file storage for the practical use type.
Our DRINX project is in early stage of development and we believe the beta version will be ready by the second quarter of fiscal year 2024. DRINX app allows anyone to purchase a virtual drink ticket anywhere and at any time for friends and colleagues. We anticipate the sources of revenue will come from advertising and sponsorships from alcohol companies promoting products on the app, user fee of $0.99 to send each drink and discounts provided by the bars and restaurants for purchases made by the app.
For the yearsperiod beginning with inception and ended June 30, 2024 and 2023,2025, we generatedhad revenues of $6,976 and $46,879, respectively.$315,130. The Company has been in the process of marketing and developing its apps, hiring developers and coders, incurring professional fees for registering its common stock and identifying other apps and partnerships to generate revenues as the Company expands its operations. Costs of sales were $270,891 which were approximately 86% of revenue. Gross margin was $44,239.
For the period beginning with inception and ended June 30, 2025, we had operating expenses of $246,137. This loss was primarily attributable to cost of goods sold, payments to contractors, and other operating expenses, including marketing and advertising.
For the years ended June 30, 2024 and 2023, we had an operating loss of $4,956,905 and $3,130,998, respectively. The operating loss was due primarily to stock compensation to the CEO of $3,920,685, and professional, consulting and legal fees of $491,966.
For the period beginning with inception and ended June 30, 2025, total other expenses were $195,865. This consisted of interest expense of $803,589, offset in part by a gain on extinguishment of debt of $7,724.
Net loss
We reported a net loss of $997,763 for the year ended June 30, 2025.
For the years ended June 30, 2024 and 2023, we had other expenses, net of $93,691 and $365,575, respectively. The decrease was primarily due to the $147,266 gain on change in the fair value of the derivative liability (Note 8 to the Consolidated Financial Statements) and a $417,526 gain on termination of conversion feature on debt.
We reported a net loss of $5,050,596 and $3,496,573 for the years ended June 30, 2024 and 2023, respectively. The net loss for the years ended June 30, 2024 and 2023 included noncash expenses of $4,388,498 and $2,646,230, respectively.
We anticipate generating losses and, therefore, may be unable to continue operations in the future. We expected to require additional capital, and we will have to issue debt or equity or enter into a strategic arrangement with a third party. The current liabilities of $2,254,187 include $728,351 of derivative liabilities which relate to the convertible notes payable and stock options. Upon exercise of the stock options and settlement of notes payable, the derivative liability will be reclassified as equity.
As reflected in the accompanying consolidated financial statements, the Company has minimal revenue generating operations and has an accumulated deficit of $21,925,000$3,621,781. In addition, there is a working capital deficiency of approximately $2,556,084 and $16,874,404a stockholder’s deficiency of $811,778 as of June 30, 2024 and 2023, respectively. In addition, the Company has experienced negative cash flows from operations since inception.2025. This raises substantial doubt about its ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company’s ability to raise additional capital and implement its business plan. The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
The Company anticipates additional equity and debt financing to fund operations in the future. Should management fail to adequately address the issue, the Company may have to reduce its business activities or curtail its operations.
Our cash balance was $22,894$111,397 on June 30, 2024.2025. We recorded a net loss of $5,050,596$997,763 for the yearperiod endedfrom January 6, 2025 to June 30, 2024.2025. We expect our expenses will continue to increase during the foreseeable future as a result of increased operations and the development of our apps and business operations. We anticipate generating revenues with our B2BCHX app, but only minimal revenues for our other apps over the next twelve months. Consequently, we are dependent on the proceeds from future debt or equity investments to sustain our operations and implement our business plan. If we are unable to raise sufficient capital, we will be required to delay or forego some portion of our business plan, which would have a material adverse effect on our anticipated results from operations and consolidated financial condition. There is no assurance that we will be able to obtain necessary amounts of capital or that our estimates of our capital requirements will prove to be accurate.
·Curtail the development of our apps,business,
·Seek strategic partnerships that may force us to relinquish significant rights to our apps,business, or
We anticipate generating losses and, therefore, may be unable to continue operations in the future. We expect to require additional capital, and we will have to issue debt or equity or enter into a strategic arrangement with a third party. The current liabilities of $2,690,817 include $802,589 of warrant liabilities which relate to the convertible notes payable.
Cash Flows
During the year ended June 30, 2024, cash used in the Company’s operating activities amounted to $372,225 mainly composed of the Company’s net loss amounting to $5,050,596, adding back the (1) net effect of noncash adjustments of stock compensation expense, amortization of discount from notes payable, interest expense, common stock issuances, change in fair value of derivative liability and common stock payable amounting to $4,388,498 and (2) net changes in working capital accounts of $289,873.
During the yearperiod endedfrom January 6, 2025 to June 30, 2023,2025, cash used in the Company’s operating activities amounted to $677,614$159,964, mainly composed of the Company’s net loss amounting to $3,496,573,$997,763. addingThis backamount thewas (1)adjusted netby effectnoncash items of noncashinterest adjustmentsexpense of stock$803,589 compensationand expense,a amortizationdecrease from gain on extinguishment of discountdebt fromof notes$7,724. payable, interest expense, common stock issuances, changeChanges in fairassets valueand ofliabilities derivativeinclude liability,an commonincrease stockin accounts payable and gainaccrued on settlementexpenses of debt amounting to $2,646,230 and (2) net changes in working capital accounts of $172,729.$41,934.
During the period from January 6, 2025 to June 30, 2025, the Company used $185,000 in cash for investing activities, which included $35,000 paid for the purchase of AP4L and $150,000 paid as purchase consideration for the Applife reverse merger in June 2025.
During the year ended June 30, 2024, the Company had invested $100,000 related to the LeSalon acquisition.
During the year ended June 30, 2023, the Company had $0 net cash used in investing activities.
During the period from January 6, 2025 to June 30, 2025, the Company received $600,000 in proceeds from the issuance of promissory notes, offset by payments of $143,639 on other liabilities, resulting in net cash provided by financing activities of $456,361.
On August 1, 2025, the Company entered into a twelve-month promissory note in the amount of $187,000 with Labrys Fund II, L.P. The note carries a 12% interest rate per annum and converts at a 25% discount to market price. Market price shall mean 75% of the average of the closing prices of the Common Stock on the Principal Market during the five (5) trading day period immediately preceding the respective conversion date.
During the year ended June 30, 2024, the Company raised $370,000 from the issuance of debt, and received $67,500 of amounts due to officer.
During the year ended June 30, 2023, the Company raised $545,000 from the issuance of debt, and received $1,000 of amounts due to officer.
Professional Fees
Professional fees were $223,103 and $226,783 for the years ended June 30, 2024 and 2023, respectively. The Company generally expects professional fee costs to increase as the Company is a public reporting company with the Securities and Exchange Commission, which requires that it maintain relationships with both PCAOB registered audit firms and securities counsel to assist with the SEC reporting requirements.
In addition, the Company may also attempt to purchase other entities or assets and operations of other entities if the advantageous situation presents itself. This could require the Company to incur substantial professional fees.
Business combination
The Company applies the provisions of ASC 805, “Business Combination” and allocates the fair value of purchase consideration to the tangible assets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Goodwill generated from a business combination is primarily attributable to synergies.
When determining the fair values of assets acquired and liabilities assumed, management makes significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible assets include but are not limited to future expected cash flows from acquired technology and acquired customer relationships from a market participant perspective, useful lives and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates.
Acquisition-related expenses are recognized separately from the business combination and are expensed as incurred (Note 3 – Business Combinations).
What changed in the latest 10-Q
Risk Factors
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
Largest changes
“An investment in our common stock involves a high degree of risk. You should carefully consider the following risks and all of the other information contained in this Annual Report before deciding whether to invest in our common stock. If any of the following risks are realized, our business, financial condition and results of operations could be materially and adversely affected. In that event, the trading price of our common stock could decline, and you could lose all or part of your investment in our common stock. …”see in full comparison
Full comparison: every changed paragraph (1)
An investment in our common stock involves a high degree of risk. You should carefully consider the following risks and all of the other information contained in this Annual Report before deciding whether to invest in our common stock. If any of the following risks are realized, our business, financial condition and results of operations could be materially and adversely affected. In that event, the trading price of our common stock could decline, and you could lose all or part of your investment in our common stock. Additional risks of which we are not presently aware or that we currently believe are immaterial may also harm our business and results of operations. Some statements in this Annual Report, including such statements in the following risk factors, constitute forward-looking statements. See the section entitled “Cautionary Note Regarding Forward-Looking Statements.”
Management's Discussion & Analysis (MD&A)
Largest changes
“Our business is subject to the impact of natural catastrophic events, such as earthquakes, or floods, public health crisis, such as disease outbreaks, epidemics, or pandemics, and all these could result in a decrease or sharp downturn of economies, including our markets and business locations in the current and future periods. The outbreak of the coronavirus (COVID-19) resulted in increased travel restrictions, and shutdown of businesses, which may cause slower recovery of the economy.”see in full comparison
see in full comparisonOur business is subject to the impact of natural catastrophic events, such as earthquakes, or floods, public health crisis, such as disease outbreaks, epidemics, or pandemics, and all these could result in a decrease or sharp downturn of economies, including our markets and business locations in the current and future periods. The outbreak of the coronavirus (COVID-19) resulted in increased travel restrictions, and shutdown of businesses, which may cause slower recovery of the economy.We may experience impact from quarantines, market downturns and changes in customer behavior related to pandemic fears and impact on our workforce if the virus continues to spread. In addition, one or more of our customers, partners, service providers or suppliers may experience financial distress, delayed or defaults on payment, file for bankruptcy protection, sharp diminishing of business, or suffer disruptions in their business due to the outbreak. The extent to which the coronavirus impacts our results will depend on future developments and reactions throughout the world, which are highly uncertain and will include emerging information concerning the severity of the coronavirus and the actions taken by governments and private businesses to attempt to contain the coronavirus. It is likely to result in a potential material adverse impact on our business, results of operations and financial condition. Wider-spread COVID-19 globally could prolong the deterioration in economic conditions and could cause decreases in or delays in advertising spending and reduce and/or negatively impact our short-term ability to grow our revenues. Any decreased collectability of accounts receivable, bankruptcy of small and medium businesses, or early termination of agreements due to deterioration in economic conditions could negatively impact our results of operations.
Results of Operations for Three Months Endedsee in full comparisonDecemberMarch 31, 2026 versus Period Ended January 6, 2025 to March 31, 2025
For the three months endedsee in full comparisonDecemberMarch 31,2025,2026, we had revenues of$894,309.$716,661 compared to revenues of $0 for the period January 6, 2025 to March 31, 2025. This growth was primarily driven by the successful completion of key technical enhancements to our ecommerce platform during the quarter. These improvements helped us to significantly broaden our product inventory selection, making a wider array of high-demand items available to customers. At the same time, we accelerated our media and marketing initiatives, leveraging expanded reach and more targeted campaigns to drive higher traffic and conversion rates. Together, these strategic advancements directly contributed to the uplift in sales volume and overall revenue performance. Costs of sales were$667,455$586,537 for the three months ended March 31, 2026 versus $0 for the period January 6, 2025 to March 31, 2025 which were approximately75%82% ofrevenue.revenue for 2026. Gross margin was$226,854.$130,124 and $0 for the three months ended March 31, 2026 and period ended January 6, 2025 to March 31, 2025, respectively.
During thesee in full comparisonsixnine months endedDecemberMarch 31,2025,2026, cash used in the Company’s operating activities amounted to$489,667,$685,912 versus $0 for the period January 6, 2025 to March 31, 2025, which mainly consisted of the Company’s net loss amounting to$902,544.$1,345,106 and $0, respectively. This amount was adjusted by noncash items in 2026 of financing expense of$451,307$474,518 and a decrease from change in fair value of derivative liabilities of$614,132,$862,010, and common and preferred shares issued for services of$119,667.$223,667. Changes in assets and liabilities include an increase in prepaid expenses and other assets, decrease in inventories, increases in accounts payable and accrued expenses, and decrease in other liabilities of$267,427.$374,096. In 2025, there was no activity.
We anticipate generating losses and, therefore, may be unable to continue operations in the future. We expect to require additional capital, and we will have to issue debt or equity principally through the ELOC or enter into a strategic arrangement with a third party. The current liabilities ofsee in full comparison$3,418,288$3,662,448 include$1,641,566$1,634,079 of assumed liabilities,$828,707$797,765 of derivative liabilities, and$429,446$485,118 in convertible promissory notes, net of discounts. In addition, accounts payable and accrued expenses $524,120 due to outstanding amounts due to consultants increasing due to cash flow shortages.
Full comparison: every changed paragraph (27)
AppLife Digital Solutions, Inc. (the “Company” or “Applife”) was formed March 5, 2018, in Nevada. The Company’s main operating subsidiary, Sugar Auto Parts, Inc. (“SAP”) is a Nevada corporation formed on January 6, 2025, by Mammoth Crest Capital, LLC, a Wyoming corporation that is 50% owned by Michael Hill and Barrett Evans, who are related parties. The Company is headquartered at 701 Anacapa St., Suite C, Santa Barbara, CA 93101. SAP operates primarily as an aftermarket automotive parts e-commerce business, specializing in online sales of suspension lift systems and related accessories through its flagship ecommerce platform. The Company serves customers across the United States, offering a wide selection of products for Jeep, truck, and SUV owners. SAP had no activity for the period January 6, 2025 through March 31, 2025.
Results of Operations for SixNine Months Ended DecemberMarch 31, 20252026
For the sixnine months ended DecemberMarch 31, 2025,2026, we had revenues of $1,358,481.$2,075,142. This growth was primarily driven by the successful completion of key technical enhancements to our ecommerce platform during the quarter. These improvements helped us to significantly broaden our product inventory selection, making a wider array of high-demand items available to customers. At the same time, we accelerated our media and marketing initiatives, leveraging expanded reach and more targeted campaigns to drive higher traffic and conversion rates. Together, these strategic advancements directly contributed to the uplift in sales volume and overall revenue performance. Costs of sales were $1,026,603$1,613,140 which were approximately 76%78% of revenue. Gross margin was $331,878.$462,002.
For the sixnine months ended DecemberMarch 31, 2025,2026, we had operating expenses of $1,242,667.$1,746,130. This expense was primarily attributable to payments to contractors, employees and other operating expenses, including marketing and advertising.
For the sixnine months ended DecemberMarch 31, 2025,2026, other expenses include finance expense of $421,307,$500,868, amortization of debt discounts on Series B Preferred Stock and convertible promissory notes of $152,341,$407,113, other expenses of $1,239,$22,207, a loss on disposal of fixed assets of $1,000, offset by other income which is the change in the fair value of the derivative liabilities of $614,132.$862,010.
We reported a net loss of $902,544$1,345,106 for the sixnine months ended DecemberMarch 31, 2025.2026.
Results of Operations for Three Months Ended DecemberMarch 31, 2026 versus Period Ended January 6, 2025 to March 31, 2025
For the three months ended DecemberMarch 31, 2025,2026, we had revenues of $894,309.$716,661 compared to revenues of $0 for the period January 6, 2025 to March 31, 2025. This growth was primarily driven by the successful completion of key technical enhancements to our ecommerce platform during the quarter. These improvements helped us to significantly broaden our product inventory selection, making a wider array of high-demand items available to customers. At the same time, we accelerated our media and marketing initiatives, leveraging expanded reach and more targeted campaigns to drive higher traffic and conversion rates. Together, these strategic advancements directly contributed to the uplift in sales volume and overall revenue performance. Costs of sales were $667,455$586,537 for the three months ended March 31, 2026 versus $0 for the period January 6, 2025 to March 31, 2025 which were approximately 75%82% of revenue.revenue for 2026. Gross margin was $226,854.$130,124 and $0 for the three months ended March 31, 2026 and period ended January 6, 2025 to March 31, 2025, respectively.
For the three months ended DecemberMarch 31, 2026 and period January 6, 2025 to March 31, 2025, we had operating expenses of $774,701.$503,463 and $0, respectively. This expense was primarily attributable to payments to contractors, employees and other operating expenses, including marketing and advertising.
For the three months ended DecemberMarch 31, 2025,2026, other expenses include finance expense of $404,883,$49,561, amortization of debt discounts on Series B Preferred Stock and convertible promissory notes of $152,341, a loss on disposal of fixed assets of $1,000, offset by other income which includes other income of $9,460$254,772, and thea change in the fair value of the derivative liabilities of $96,751.$247,878.
For the period January 6, 2025 to March 31, 2025 there was no other income (expense).
We reported a net loss of $998,866$442,562 and $0 for the three months ended DecemberMarch 31, 2025.2026 and period January 6, 2025 to March 31, 2025, respectively.
As reflected in the accompanying condensed consolidated financial statements, the Company has revenue generating operations and has an accumulated deficit of $4,644,325.$4,966,887. In addition, there is a working capital deficiency of approximately $3,385,749$3,543,173 and a stockholder’s deficiency of $1,811,140$2,011,183 as of DecemberMarch 31, 2025.2026. This raises substantial doubt about its ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company’s ability to raise additional capital and implement its business plan. The condensed consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
Our cash balance was $137,330$16,305 on DecemberMarch 31, 2025.2026. We recorded a net loss of $1,022,544$1,345,106 for the sixnine months ended DecemberMarch 31, 2025.2026. We expect our expenses will continue to increase during the foreseeable future as a result of increased operations and the development of our business operations. Consequently, we are dependent on the proceeds raised in the convertible notes which generated $515,600$565,820 in cash, $25,000 in proceeds from related party advances as well as the new ELOC entered into during the sixnine months ended DecemberMarch 31, 20252026 to continue to fund our operations and implement our business plan. If we are unable to raise sufficient capital, we will be required to delay or forego some portion of our business plan, which would have a material adverse effect on our anticipated results from operations and consolidated financial condition. There is no assurance that we will be able to obtain necessary amounts of capital or that our estimates of our capital requirements will prove to be accurate.
∙·Curtail the development of our business,
∙·Seek strategic partnerships that may force us to relinquish significant rights to our business, or ∙Explore potential mergers or sales of significant assets of our Company.
·Explore potential mergers or sales of significant assets of our Company.
We anticipate generating losses and, therefore, may be unable to continue operations in the future. We expect to require additional capital, and we will have to issue debt or equity principally through the ELOC or enter into a strategic arrangement with a third party. The current liabilities of $3,418,288$3,662,448 include $1,641,566$1,634,079 of assumed liabilities, $828,707$797,765 of derivative liabilities, and $429,446$485,118 in convertible promissory notes, net of discounts. In addition, accounts payable and accrued expenses $524,120 due to outstanding amounts due to consultants increasing due to cash flow shortages.
During the sixnine months ended DecemberMarch 31, 2025,2026, cash used in the Company’s operating activities amounted to $489,667,$685,912 versus $0 for the period January 6, 2025 to March 31, 2025, which mainly consisted of the Company’s net loss amounting to $902,544.$1,345,106 and $0, respectively. This amount was adjusted by noncash items in 2026 of financing expense of $451,307$474,518 and a decrease from change in fair value of derivative liabilities of $614,132,$862,010, and common and preferred shares issued for services of $119,667.$223,667. Changes in assets and liabilities include an increase in prepaid expenses and other assets, decrease in inventories, increases in accounts payable and accrued expenses, and decrease in other liabilities of $267,427.$374,096. In 2025, there was no activity.
During the sixnine months ended DecemberMarch 31, 2026 and period January 6, 2025 to March 31, 2025, the Company used $0 in cash for investing activities.
During the sixnine months ended DecemberMarch 31, 2026 and period January 6, 2025 to March 31, 2025, the Company received $515,600$565,820 and $0 in proceeds from the issuance of convertible promissory notes. In 2026, we also received $25,000 in proceeds from related party advances.
The preparation of the company’s condensed consolidated financial statements and related disclosures are in conformity with U.S. generally accepted accounting principles (“GAAP”). The Company’s discussion and analysis of its financial condition and operating results require the Company’s management to make judgments, assumptions and estimates that affect the amounts reported in its condensed consolidated financial statements and accompanying notes. Note 1, “Summary of Significant Accounting Policies,” of the Notes to Financial Statements included in this Form 10-K,10-Q, describes the significant accounting policies and methods used in the preparation of the Company’s condensed consolidated financial statements. Management bases its estimates on historical experience and on various other assumptions 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. Actual results may differ from these estimates, and such differences may be material.
Revenue is disaggregated by major product line and timing (point in time vs. over time) in the notes to the condensed consolidated financial statements.
The Company accounts for share-based compensation in accordance with the fair value recognition provision of FASB ASC 718, Compensation – Stock Compensation (“ASC 718”), prescribes accounting and reporting standards for all share-based payment transactions in which employee services are acquired. Transactions include incurring liabilities, or issuing or offering to issue shares, options, and other equity instruments such as employee stock ownership plans and stock appreciation rights. Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the condensed consolidated financial statements based on the estimated grant date fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period).
FASB ASC 815, Derivatives and Hedging, requires all derivatives to be recorded on the condensed consolidated balance sheet at fair value. As of DecemberMarch 31, 2025,2026, we used the Black-Scholes-Merton (BSM) model to estimate the fair value of the conversion feature of the convertible note. Key assumptions of the BSM model include the market price of our stock, the conversion price of the debt, applicable volatility rates, risk-free interest rates and the instrument’s remaining term. These assumptions require significant management judgment. In addition, changes in any of these variables during a period can result in material changes in the fair value (and resultant gains or losses) of this derivative instrument.
Our business is subject to the impact of natural catastrophic events, such as earthquakes, or floods, public health crisis, such as disease outbreaks, epidemics, or pandemics, and all these could result in a decrease or sharp downturn of economies, including our markets and business locations in the current and future periods. The outbreak of the coronavirus (COVID-19) resulted in increased travel restrictions, and shutdown of businesses, which may cause slower recovery of the economy.
Our business is subject to the impact of natural catastrophic events, such as earthquakes, or floods, public health crisis, such as disease outbreaks, epidemics, or pandemics, and all these could result in a decrease or sharp downturn of economies, including our markets and business locations in the current and future periods. The outbreak of the coronavirus (COVID-19) resulted in increased travel restrictions, and shutdown of businesses, which may cause slower recovery of the economy. We may experience impact from quarantines, market downturns and changes in customer behavior related to pandemic fears and impact on our workforce if the virus continues to spread. In addition, one or more of our customers, partners, service providers or suppliers may experience financial distress, delayed or defaults on payment, file for bankruptcy protection, sharp diminishing of business, or suffer disruptions in their business due to the outbreak. The extent to which the coronavirus impacts our results will depend on future developments and reactions throughout the world, which are highly uncertain and will include emerging information concerning the severity of the coronavirus and the actions taken by governments and private businesses to attempt to contain the coronavirus. It is likely to result in a potential material adverse impact on our business, results of operations and financial condition. Wider-spread COVID-19 globally could prolong the deterioration in economic conditions and could cause decreases in or delays in advertising spending and reduce and/or negatively impact our short-term ability to grow our revenues. Any decreased collectability of accounts receivable, bankruptcy of small and medium businesses, or early termination of agreements due to deterioration in economic conditions could negatively impact our results of operations.
ALDS insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 0 filings. Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
No Form 4 stock transactions in this period.
Well-known investors holding ALDS (13F)
None of the 59 investors we track reported a position in their latest 13F.