FORWARD-LOOKING STATEMENTS
This quarterly report contains forward-looking statements. These statements
relate to future events or our future financial performance. In some cases, you
can identify forward-looking statements by terminology such as "may", "should",
"expects", "plans", "anticipates", "believes", "estimates", "predicts",
"potential" or "continue" or the negative of these terms or other comparable
terminology. These statements are only predictions and involve known and unknown
risks, uncertainties and other factors that may cause our or our industry's
actual results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance or
achievements expressed or implied by these forward-looking statements. Although
we believe that the expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, levels of activity, performance
or achievements. Except as required by applicable law, including the securities
laws of the United States, we do not intend to update any of the forward-looking
statements to conform these statements to actual results.
Our financial statements are prepared in accordance with United States Generally
Accepted Accounting Principles. The following discussion should be read in
conjunction with our financial statements and the related notes that appear
elsewhere in this quarterly report. The following discussion contains
forward-looking statements that reflect our plans, estimates and beliefs. Our
actual results could differ materially from those discussed in the
forward-looking statements. Factors that could cause or contribute to such
differences include, but are not limited to, those discussed below and elsewhere
in this quarterly report.
In this quarterly report, unless otherwise specified, all dollar amounts are
expressed in United States dollars and all references to "common shares" refer
to the common shares in our capital stock.
As used in this quarterly report, the terms "we", "us", "our" and "our company"
mean Lingerie Fighting Championships, Inc., unless otherwise indicated.
General Overview
We were incorporated under the laws of the State of Nevada on November 29, 2006
under the name "Sparking Events, Inc.". Our name was changed to Xodtec Group
USA, Inc. in June 2009, Xodtec LED, Inc. in May 2010, Cala Energy Corp. in
September 2013 and Lingerie Fighting Championships, Inc. on April 1, 2015.
We are a media company focused on the development, production, promotion and
distribution of original entertainment which we plan to make commercially
available predominantly through live entertainment events, as well as through
digital home video, broadcast television networks, video-on-demand and digital
media channels.
Our business and corporate address is 6955 North Durango Drive, Suite 1115-129,
Las Vegas NV 89149. Our corporate website is http://LFCfights.com/.
We do not have any subsidiaries.
We have never declared bankruptcy nor have we ever been in receivership.
Our Current Business
Our LFC business and brand is focused on building and establishing a sports
entertainment league that utilizes wrestling and mixed martial arts ("MMA")
fighting techniques for purposes of providing entertainment. We seek to promote
and market our brand, our programming, our events and our products.
Our mission is to establish the popularity of our LFC league and brand based on
holding live events and to promote our athletes via a reality series and
merchandise such a t-shirts and calendars. Our uniqueness is derived from our
predominantly all female league structure, where a vast array of beautiful,
attractive and unique women engage in wrestling and MMA fighting techniques
against one another for purposes of delivering high quality entertainment to
mature audiences.
Our management believes that the LFC league and our unique approach in applying
a predominantly all female league structure to wrestling and mixed martial arts
gives us a substantial competitive advantage to build the popularity of the LFC
league in general.
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Recent Business Development
On May 5, 2021, we have been booked to perform three events at the Sturgis
Buffalo Chip during the closing weekend of the 2021 Sturgis Motorcycle Rally in
Sturgis, SD.
On May 17, 2021, we have inked a deal with Johnny Cafarella who will oversee the
creation of a brand new television series about the controversial MMA league.
Cafarella is best known as the co-founder and producer of GLOW which saw a
resurgence in popularity recently with the success of the GLOW series on
Netflix.
On June 15, 2021, we have added Christopher Crotte (aka The SuperBeast) to their
ranks as a trainer and coach for the upcoming events at the Sturgis Motorcycle
Rally.
On June 21, 2021, we have partnered with Agape Impetus Dunamis Ministries (AIDM)
as one of the league's principal sponsors at their 3 upcoming events at the
Sturgis Motorcycle Rally. The California-based ministry created an inspirational
design which will adorn the LFC ring during the league's events on the closing
weekend of the Rally which is expected to draw as many as 750,000 bike
enthusiasts.
In July 2021, we were approached by a company called Scuffle LLC who specialize
in launching Roku channels. We have partnered with them to launch our own
channel we'll be calling "LFC Network". The channel will carry our past events,
our reality series and several new series we plan to create. It will be similar
in scope to WWE Network. It will be funded by a combination of subscription
fees, advertisers and sponsors, both self generated and placed by Roku itself.
On August 27, 2021, we announced LFC35: Booty Camp 3D which would take place
Halloween in Las Vegas and would be shot using 360 degree virtual reality
cameras.
On September 1, 2021, we announced the launch of LFC Madness 2, a follow-up to
our first LFC Madness bracket style virtual tournament. Once again the two
prospects with the most votes would fight each other at LFC35 and each would
receive a $1200 diamond bracelet courtesy Boston Diamonds & Bling.
On October 1, 2021, LFC Network was launched on schedule on Roku.
On October 19, 2021, we launched our own branded CBD pain relief cream called
'LFC True Relief'. The product is available for sale on our site.
Results of Operations
Three months ended September 30, 2022 as compared to the three months ended
September 30, 2021
Our operating results for the three months ended September 30, 2022 and 2021,
and the changes between those periods for the respective items are summarized as
follows:
Three Months Ended
September 30, Changes
Statement of Operations Data: 2022 2021 Amount %
Revenue $ 25,393 $ 41,837 $ (16,444 ) (39 %)
Cost of Services (9,700 ) (40,628 ) 30,928 (76 %)
Total operating expenses (73,728 ) (83,782 ) 10,054 (12 %)
Other income (expense) (613,243 ) (4,523,635 ) 3,910,392 (86 %)
Net Income (loss) $ (671,278 ) $ (4,606,208 ) $ 3,934,930 (85 %)
Revenues
We generated revenues of $25,393 and $41,837 for the three ended September 30,
2022 and 2021, respectively. The Company's revenue derives from the development,
promotion and distribution of our live events, televised entertainment
programming and site subscription. The decrease in revenues was attributed to an
decrease in live event revenue during the quarter.
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Cost of Services
We incurred total cost of services of $9,700 and $40,628 for the three months
ended September 30, 2022 and 2021, respectively. The cost of services incurred
consist of labor, material, equipment and subcontractor expenses.
Operating Expenses
We incurred total operating expenses of $73,728 and $83,782 for the three months
ended September 30, 2022 and 2021, respectively. The decrease in operating
expenses was primarily due to the decrease in e-commerce, taxes, license and
travel expense.
Other Income (Expenses)
We recognized total other expense of $613,243 and $4,523,635 for the three
months ended September 30, 2022 and 2021, respectively. The increase in other
expense was mainly attributed to an decrease in loss on changes in fair value of
derivatives from the convertible notes and warrants and a decrease in accrued
interest expenses from convertible notes and promissory notes during the three
months ended September 30, 2022.
Net Income (Loss)
We recognized net loss of $671,278 and $4,606,208 during the three months ended
September 30, 2022 and 2021, respectively. The decrease in our net loss was
mainly attributed to the decrease in other expense and the decrease in operating
expense during the three months ended September 30, 2022.
Nine months ended September 30, 2022 as compared to the nine months ended
September 30, 2021
Our operating results for the nine months ended September 30, 2022 and 2021, and
the changes between those periods for the respective items are summarized as
follows:
Nine Months Ended
September 30, Changes
Statement of Operations Data: 2022 2021 Amount %
Revenue $ 78,831 $ 76,339 $ 2,492 3 %
Cost of services (24,657 ) (66,660 ) 42,003 (63 %)
Gross profit (loss) 54,174 9,679 44,495 460 %
Total operating expenses (204,240 ) (216,486 ) 12,246 (6 %)
Other income (expense) 1,223,095 (11,291,887 ) 12,514,982 (111 %)
Net income (loss) $ 1,073,029 $ (11,498,694 ) $ 12,571,723 (109 %)
Revenues
We generated revenues of $78,831 and $76,339 for the nine months ended September
30, 2022 and 2021, respectively. The Company's revenue derives from the
development, promotion and distribution of our live events, televised
entertainment programming and site subscription. The increase in revenues was
attributed to an increase in live event revenue.
Cost of Services
We incurred total cost of services of $24,657 and $66,660 for the nine months
ended September 30, 2022 and 2021, respectively. The cost of services incurred
consist of labor, material, equipment and subcontractor expenses. The decrease
in cost of services during the nine months ended September 30, 2022 was due to a
decrease in cost of subcontractors.
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Operating Expenses
We incurred total operating expenses of $204,240 and $216,486 for the nine
months ended September 30, 2022 and 2021, respectively. The decrease in
operating expenses was primarily due to the decrease in e-commerce, taxes and
travel expense.
Other Income (Expenses)
We recognized total other income of $1,223,095 and incurred other expenses of
$11,291,887 for the nine months ended September 30, 2022 and 2021, respectively.
The increase in other income was mainly attributed to an increase in gain on
changes in fair value of derivatives during the nine months ended September 30,
2022.
Net Income (Loss)
We recognized net income of $1,073,029 and incurred net loss of $11,498,694
during the nine months ended September 30, 2022 and 2021, respectively. The
increase in our net income was mainly attributed to an increase in gross profit,
the decrease in operating expense and the increase in other income during the
nine months ended September 30, 2022.
Liquidity and Capital Resources
September 30, December 31, Changes
Working Capital Data: 2022 2021 Amount %
Current Assets $ 20,086 $ 41,981 $ (21,895 ) (52 %)
Current Liabilities $ 5,745,865 $ 6,840,790 (1,094,925 ) (16 %)
Working Capital (16
Deficiency $ (5,725,779 ) $ (6,798,809 ) 1,073,030 %)
At September 30, 2022 we had a working capital deficiency of $5,725,779 and an
accumulated deficit of $10,648,112. The Company intends to fund future
operations through equity financing arrangements, which may be insufficient to
fund its capital expenditures, working capital and other cash requirements for
the year ending December 31, 2022.
The ability of the Company to realize its business plan is dependent upon, among
other things, obtaining additional financing to continue operations, and
development of its business plan. In response to these problems, management
intends to raise additional funds through public or private placement offerings.
These factors, among others, raise substantial doubt about the Company's ability
to continue as a going concern. The accompanying financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
The following table sets forth certain information about our cash flow during
the nine months ended September 30, 2022 and 2021:
Nine Months Ended
September 30, Changes
Cash Flows Data: 2022 2021 Amount %
Cash Flows used in Operating
Activities $ (66,895 ) $ (203,013 ) $ 136,118 (67 %)
Cash Flows provided by Financing (83
Activities 45,000 265,000 (220,000 ) %)
Net increase (decrease) in cash (135
during period $ (21,895 ) $ 61,987 $ (83,882 ) %)
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Cash Flows from Operating Activities
We have not generated positive cash flows from operating activities.
During the nine months ended September 30, 2022, net cash flows used in
operating activities was $66,895, consisting of a net income of $1,073,029,
decreased by gain on change in fair value of derivative liabilities of
$1,480,510, increased by amortization of debt discount of $100,669 and net
changes in operating assets and liabilities of $239,917.
During the nine months ended September 30, 2021, net cash flows used in
operating activities was $170,513, consisting of a net loss of $11,498,694,
decreased by loss on change in fair value of derivative liabilities of
$10,821,246, amortization of debt discount of $359,470, note conversion fee of
$1,500 and net changes in operating assets and liabilities of $145,956.
Cash Flows from Investing Activities
There were no investing activities during the nine months ended September 30,
2022 and 2021.
Cash Flows from Financing Activities
During the nine months ended September 30, 2022, net cash provided by financing
activities was $45,000 through proceeds from issuance of a convertible note.
During the nine months ended September 30, 2021, net cash provided by financing
activities was $265,000 through the proceeds from issuance of promissory notes.
Off-Balance Sheet Arrangements
As of September 30, 2022, we had no off-balance sheet arrangements.
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