UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended March 31, 2017 and March 31, 2016

Commission File No. 000-54741

THE PULSE NETWORK, INC.

(Exact name of registrant as specified in its charter)

Nevada		45-4798356
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

10 Oceana Way

Norwood, Massachusetts 02062

(Address of principal executive offices, zip code)

(781) 688-8000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

None

Securities registered pursuant to section 12(g) of the Act:

Common Stock, $.001 par value

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 not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ No x

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 Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T 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 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. (Check one):

Large accelerated filer	¨	Non-accelerated filer	¨
Accelerated filer	¨	Smaller reporting company	x
(Do not check if a smaller reporting company)

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

As of September 30, 2016, the aggregate market value of Company’s common stock held by non-affiliates of the registrant was $58,299 based on the closing sale price ($.0001) reported on the OTC Pink.

At March 31, 2017, the end of the Registrant’s most recently completed fiscal year, there were 720,544,746 shares of common stock, par value $0.001 per share; 1,000 shares of Series A Preferred Stock, par value $0.001 per share (convertible into 1,000 shares of common stock);15,000,000 shares of Series B Preferred Stock, par value $0.001 per share (convertible into 75,000,000 shares of common stock); and 500,000 shares of Series C Preferred Stock, par value $0.001 per share; issued and outstanding.

THE PULSE NETWORK, INC.

TABLE OF CONTENTS

		Page No.

PART I

Item 1.	Business	4
Item 1A.	Risk Factors	7
Item 2.	Properties	7
Item 3.	Legal Proceedings	7

PART II

Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	8
Item 6.	Selected Financial Data	9
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	9
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	10
Item 8.	Financial Statements and Supplementary Data	11
Item 9A.	Controls and Procedures	41

PART III

Item 10.	Directors, Executive Officers and Corporate Governance	42
Item 11.	Executive Compensation	44
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	46
Item 13.	Certain Relationships and Related Transactions, and Director Independence	47
Item 14.	Principal Accounting Fees and Services	48

PART IV

Item 15.	Exhibits and Financial Statement Schedules	49
	Signatures	50

FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K of The Pulse Network, Inc., a Nevada corporation, contains “forward-looking statements,” as defined in the United States Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by terminology such as “may”, “will”, “should”, “could”, “expects”, “plans”, “intends”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of such terms and other comparable terminology. These forward-looking statements include, without limitation, statements about our market opportunity, our strategies, competition, expected activities and expenditures as we pursue our business plan, and the adequacy of our available cash resources. 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. Actual results may differ materially from the predictions discussed in these forward-looking statements. The economic environment within which we operate could materially affect our actual results.

Our management has included projections and estimates in this Form 10-K, which are based primarily on management’s experience in the industry, assessments of our results of operations, discussions and negotiations with third parties and a review of information filed by our competitors with the SEC or otherwise publicly available. We caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

All references in this Form 10-K to the “Company”, “The Pulse Network, Inc.”, “The Pulse Network”, “TPNI”, “we”, “us,” or “our” are to The Pulse Network, Inc.

Table of Contents

PART I

ITEM 1. BUSINESS

Our Corporate History and Background

We were incorporated as iSoft International, Inc. on March 9, 2011, in the State of Nevada. Effective March 14, 2013, under the laws of Nevada, we amended our Articles of Incorporation to change our name from “iSoft International, Inc.” to “The Pulse Network, Inc.” From inception until we completed our reverse acquisition of The Pulse Network, the principal business of the Company was the development and operation of online games for social networking websites. Prior to March 29, 2013 we had never had any revenues and had a limited operating history.

Organization & Subsidiaries

We have one operating subsidiary, The Pulse Network, Inc., a Massachusetts corporation.

Overview of The Pulse Network

Through our wholly owned subsidiary, The Pulse Network was incorporated on December 24, 2008, in Massachusetts. The business of The Pulse Network was originally developed at Exgenex, Inc., a New York corporation (“Exgenex”), formed in April 2002. Exgenex changed its name to “CrossTech Group, Inc.” (“CrossTech New York”) in February 2008. On December 24, 2008, The Pulse Network was formed in Massachusetts under the name of “CrossTech Group, Inc.”, merged (as the surviving corporation) with CrossTech New York on December 31, 2009, and changed its name to “The Pulse Network Inc.” on June 2, 2011.

The business of The Pulse Network is now the principal business of the Company. The Pulse Network provides a cloud-based platform focused on content marketing and event solutions. The Pulse Network helps clients ranging from Fortune 500 companies, to small and mid-size companies, boost awareness, drive lead generation, and enhance client engagement through content marketing, campaign management and event registration with a social and digital backbone. With over 20 years of experience delivering online and offline marketing programs, state of the art video production studio, and a highly skilled team, The Pulse Network has become the partner of choice for numerous B2B and B2C brands.

Table of Contents

The Pulse Network was established in June 1994 and currently operates from offices located at 10 Oceana Way, Norwood, Massachusetts 02062. The Pulse Network’s website is www.tpni.com.

On January 31, 2014, The Pulse Network launched a cloud-based comprehensive content marketing platform which empowers corporate marketers and event groups in their campaign efforts. The platform solution addresses the challenges consumers face when seeking information and content surrounding a company well as the corporate content marketing problems that businesses face in trying to ensure that their content is seen by the right audience.

The new platform incorporates flat design, an enhanced layout, new icons and more typography, all of which can be translated to any language, significantly benefiting The Pulse Network’s international clients. In addition to the new design, the platform is highly organized for both event marketers and content marketers and combines the registration technology with asset creation, curation, distribution, and management to be used by all types of businesses and consumers. By bringing all the modules together under one platform, The Pulse Network is releasing a completely unique and powerful tool that will be used for hundreds of global programs on six continents. The fully integrated platform is comprised of three chief features: Event Management, Online Broadcast, and Content Marketing Tools.

ICTG Platform

On October 6, 2014, The Pulse Network acquired You Everywhere Now, LLC, VoiceFollowUp, LLC and Traffic Geyser, LLC (collectively, “ICTG”) which are collectively a marketing technology services business. ICTG is complete marketing and follow up automation software. Customers of ICTG set up a lead database and direct an “Instant Customer” on what to do. The instant customer will then automatically follow up with email, SMS/text, direct to voicemail, video, postcards and letters, and even simulated live webinars. Instant Customer does all the follow up automatically, offers a dashboard to monitor how well business is doing, what areas need focus, what areas are strong, and which methods are working most effectively to cut down unneeded marketing costs and increase profit margins.

Event Management

The Pulse Network's event management solution is a global, end-to-end tool for event groups all over the world. This solution allows event groups to store all data related to each individual tradeshow or conference they organize. The platform allows event groups to manage and house their lead database, communicate with customers, and perform registration services both online and onsite. Event groups can seamlessly execute events using the platform from the beginning stages through post-conference campaigns by leveraging the tools of the platform, bringing events to life year-round. This solution helps event groups increase verification rates, increase attendance, and improve attendee satisfaction.

Created by the team that developed the Exgenex (a company formerly operated by Nicholas Saber, Stephen Saber, and John Saber) registration system, The Pulse Network’s event management solution was built from the ground up. The single platform approach allows a client to run their entire suite of events, both domestic and international, produced in English or foreign languages in the same master database.

In addition, The Pulse Network’s capabilities include full event management support – including show production, a comprehensive speaker management system, with the ability to manage complete speaker processing through the system, from call for papers, to ranking proposals and managing sessions, and Continuing Education Unit (CEU) session tracking and reporting, with full scheduling / tracking of CEU credits, online access for attendees, and email updates.

For lead management, The Pulse Network offers HostMyLeads.com, along with extensive event marketing and mobile capabilities, including lead retrieval, session surveys, product locator, exhibitor layout, and reporting. Since 1994, The Pulse Network team has been providing event technologies, registration and lead generation services to businesses, event organizers and associations of all sizes. Today these solutions include web services and lead management programs to help clients engage with their community across all channels – online, mobile or face to face.

The Pulse Network’s Event Database Solutions include a comprehensive multi-channel SaaS platform for marketing support, registration, housing, management reporting, lead retrieval, online production, event websites, and CEU tracking, along with services for marketing and event management used at events worldwide ranging in size from 50 to 200,000 participants.

Table of Contents

Content Marketing Tools

The content marketing tools which support the cloud-based platform include a content curation tool, syndication and distribution tools, social sharing, newsletter creation, analytics and reporting, and prospect management among many others. These tools benefit corporate marketers by simplifying processes for sharing content related to products and service, communicating with consumers and implementing lead nurturing campaigns.

The Pulse Network’s content curation tool is a one-click option that allows anyone across the web to tag an article for use in a content marketing effort. With the loading of a simple plug-in on any browser, customers can allow anyone connected to the organization to click, categorize, and tag an article for use on a digital publication, in a newsletter, or for social sharing and engagement.

The Pulse Network’s newsletter creation tool creates a newsletter with 5 simple clicks. No longer does a marketer need to wait for a developer or HTML programmer to program an email newsletter for distribution. Simply choose the content from the content library (content that was curated or loaded into the platform) and in an instant a newsletter has been created and is ready for distribution.

Early Customer Engagement Platform

On June 9, 2014, the Pulse Network announced the release of its Cloud-Based Integrated Platform for Early Customer Engagement. The Pulse Network’s platform helps clients create a digital publication, original video centric content, curate content, and build a powerful content marketing program. No longer do clients have to outsource content marketing, The Pulse Network’s platform can now do it for them. They can create entire newsletters with just a few clicks, pulling content elements from multiple sources, delivering fresh content each week. With TPNI's new tool, delivering content has never been easier.

The Pulse Network’s platform now consists of four modules: Content Marketing, Digital Publication, Webcast Production, and Event Management. These allow clients to engage their current and prospective customers with relevant content and consistent touch points through seamless experiences.

The Pulse Network’s Content Marketing Platform provides newsletters for outreach and engagement, a one touch curation tool for curation by multiple authors with the click of a button, and easy and personalized engagements through email, SMS, and social channels.

The Pulse Network’s Digital Publication Platform Creator develops digital publications for clients helping generate new prospects with content and programs, increases brand awareness through thought leadership, and nurture prospects into leads through consistent quality engagement.

The Pulse Network’s Video Webcast Production Platform engages the audience with live video production, increasing participation with live polls and chats, while tailoring the event with real-time analytics.

The Pulse Network’s Event Management Platform creates interactive customer experiences through registration and online engagement, increases registration counts through engagement and social sharing, and increases verification counts through connecting with the audience.

Intellectual Property

We rely on a combination of trademark laws, trade secrets, confidentiality provisions and other contractual provisions to protect our proprietary rights, which are primarily our brand names, product designs and marks. We do not own patents.

Government Regulation and Approvals

We are not aware of any governmental regulations or approvals required for any of our products.

Table of Contents

Employees

As of the date hereof, we have 10 employees who work full-time.

Our Executive Offices

Our executive offices are located at 10 Oceana Way, Norwood, Massachusetts 02062.

ITEM 1A. RISK FACTORS

As a “smaller reporting company,” as defined in Rule 12b-2 of the Exchange Act, we are not required to provide the information called for by this Item.

ITEM 2. PROPERTIES

Our executive offices are currently located at 10 Oceana, Norwood, Massachusetts 02062.

We operate our business from approximately 10,000 square feet of leased space, 32.5% of which is beneficially owned by Stephen Saber and Nicholas Saber collectively, two of our officers and directors. The Company leases its office space under a non-cancelable lease agreement with the related party which expires September 15, 2024.

On March 1, 2017, the Company subleased approximately 500 square feet of its premises at 10 Oceana Way Norwood, Massachusetts 02062. The lease agreement states the Company will receive $1,146 per month for rent. The term of the lease expires on February 28, 2020.

ITEM 3. LEGAL PROCEEDINGS

On August 17, 2016, the Company was subject to claim of $181,300 for breached terms of a written consulting agreement from Kashwise Global Funding, Inc. Litigation was entered in the Circuit Court of the 17^th Judicial Circuit in and for Broward County, Florida under Case#12-14834 (2). That Complaint was, upon motion and hearing, dismissed on October 25, 2016, with the Plaintiff being afforded the opportunity to replead its claims. That Complaint was, upon motion and hearing, dismissed on October 25, 2016, with the Plaintiff being afforded the opportunity to replead its claims. An Amended Complaint was thereinafter filed, in response to which an Answer and Affirmative Defenses were filed on December 20, 2016. Management has aggressively responded to the claims being asserted, and is vigorously defending against same. A motion seeking a Summary Judgment in favor of the client has been filed and is scheduled for hearing on August 8, 2017. It is the opinion of counsel that there is a substantial probability of success upon the Motion for Summary Judgment above referenced.

Table of Contents

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS MARKET INFORMATION

Since May 3, 2012, our shares of common stock have been quoted on the OTC Bulletin Board and the OTCQB tier of OTC Markets. Since April 12, 2013, our shares of common stock were quoted under the stock symbol “TPNI,” and from May 3, 2012 until April 11, 2013, our shares of common stock were quoted under the stock symbol “ISNN.” The following table shows the reported high and low closing bid prices per share for our common stock based on information provided by the OTCQB. The over-the-counter market quotations set forth for our common stock reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.

	BID PRICE PER SHARE
	HIGH		LOW

Fiscal year ended March 31, 2017
Quarter ended March 31, 2017	$	0.00	$	0.00
Quarter ended December 31, 2016	$	0.00	$	0.00
Quarter ended September 30, 2016	$	0.00	$	0.00
Quarter ended June 30, 2016	$	0.00	$	0.00

Fiscal year ended March 31, 2016
Quarter ended March 31, 2016	$	0.00	$	0.00
Quarter ended December 31, 2015	$	0.01	$	0.00
Quarter ended September 30, 2015	$	0.01	$	0.00
Quarter ended June 30, 2015	$	0.01	$	0.00

TRANSFER AGENT

Our transfer agent is Empire Stock Transfer of Henderson, Nevada. Their address is 1859 Whitney Mesa Dr., Henderson, Nevada 89014 and their telephone number is (702) 818-5898.

HOLDERS

As of March 31, 2017, the end of the Registrant’s most recently completed fiscal year, there were 720,544,746 shares of common stock, par value $0.001 per share, held by approximately 26 holders of record; 1,000 shares of Series A Preferred Stock, par value $0.001 per share (convertible into 1,000 shares of common stock) held by 3 holders of record; 15,000,000 shares of Series B Preferred Stock, par value $0.001 per share (convertible into 75,000,000 shares of common stock) held by 3 holders of record, and 500,000 shares of Series C Convertible Preferred Stock, par value $0.001 per share held by one holder.

DIVIDENDS

Historically, we have not paid any dividends to the holders of our common stock and we do not expect to pay any such dividends in the foreseeable future as we expect to retain our future earnings for use in the operation and expansion of our business.

RECENT SALES OF UNREGISTERED SECURITIES

There were no unregistered sales of equity securities during the year ended March 31, 2017.

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS.

Effective March 29, 2013, the Company adopted the 2013 Stock Option Plan which provides for the grant of options to acquire shares of common stock of the Company. Stock options granted under this Plan that qualify under Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), are referred to in this Plan as “Incentive Stock Options.” Incentive Stock Options and stock options that do not qualify under Section 422 of the Code (“Non-Qualified Stock Options”) granted under this Plan are referred to collectively as “Options.”

This Plan shall be administered initially by the Board of Directors of the Company (the “Board”), except that the Board may, in its discretion, establish a committee composed of two (2) or more members of the Board or two (2) or more other persons to administer the Plan, which committee (the “Committee”) may be an executive, compensation or other committee, including a separate committee especially created for this purpose.

Incentive Stock Options may be granted to any individual who, at the time the Option is granted, is an employee of the Company or any Related Corporation.

The Plan Administrator is authorized to grant Options to acquire up to a total of fifteen million (15,000,000) shares of the Company’s authorized but unissued, or reacquired, Common Stock.

Table of Contents

PURCHASES OF EQUITY SECURITIES BY THE REGISTRANT AND AFFILIATED PURCHASERS

We did not purchase any of our shares of common stock or other securities during the year ended March 31, 2017.

ITEM 6. SELECTED FINANCIAL DATA

As a “smaller reporting company,” as defined in Rule 12b-2 of the Exchange Act, we are not required to provide the information called for by this Item.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of the results of operations and consolidated financial condition for the fiscal years ended March 31, 2017, and 2016, should be read in conjunction with our consolidated financial statements, and the notes to those consolidated financial statements that are included elsewhere in this Annual Report on Form 10-K. References in this section to “we,” “us,” “our” or “The Pulse Network” are to the consolidated business of The Pulse Network. Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors, including those set forth under the Risk Factors, Cautionary Notice Regarding Forward-Looking Statements and Business sections in this Form 10-K. We use words such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “could,” and similar expressions to identify forward-looking statements.

Critical Accounting Policies and Estimates

The Company’s consolidated financial statements have been prepared in accordance with U.S. GAAP. In connection with the preparation of the consolidated financial statements, the Company is required to make assumptions and estimates about future events, and apply judgments that affect the reported amounts of assets, liabilities, revenue, expenses and related disclosures. It based assumptions, estimates and judgments on historical experience, current trends and other factors that management believes to be relevant at the time the consolidated financial statements are prepared. On a regular basis, management reviews accounting policies, assumptions, estimates and judgments to ensure that the consolidated financial statements are presented fairly and in accordance with U.S. GAAP. However, because future events and their effects cannot be determined with certainty, actual results could differ from assumptions and estimates, and such differences could be material.

Results of operations for 2017 compared to 2016.

Revenues and Cost of Revenues

During 2017 and 2016 the Company generated revenues from 2 primary business segments, being:

	·	Revenues earned from usage of the ICTG Platform for software marketing tools.

	·	Revenues earned from usage of the Pulse Network Platform for management and support of client events or conferences.

Total revenues for 2017 decreased by 39.1% to $2,337,222 from $3,834,949 in 2016. The decrease is mainly attributable to the decrease in customers using the ICTG Platform for software marketing tools.

Cost of revenues for 2017 decreased by 43.0% to $422,574 from $741,598 in 2016. The decrease is mainly attributable to the decrease in customers using the ICTG Platform for software marketing tools, client services payroll and outside contractors.

Selling and Marketing

Selling and Marketing expenses for 2017 decreased by 69.5% to $25,306 this was down from $82,902 for 2016. The decrease in selling and marketing expenses is attributable to a reduction in sales employees.

General and Administrative

General and administrative expenses for 2017 decreased by 25.9% to $2,815,654 down from the amount $3,801,940 for 2016. The decrease in general and administrative expenses is attributable to a decrease in costs related to financing the acquisition of You Everywhere Now, LLC., computer expenses, client fees, and customer service payroll.

Table of Contents

Net Loss Attributable to the Company

The net loss to the Company for 2017 was $1,398.988 compared to $2,098,266 for 2016. The decrease was mainly attributable to the impairment loss recognized in 2016.

Going Concern

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. The Company has limited resources and operating history. As shown in the accompanying consolidated financial statements, as of March 31, 2017, the Company has an accumulated deficit of $10,099,456 and has negative working capital of $6,918,994. The future of the Company is dependent upon its ability to obtain financing and upon future profitable operations from the development of its new business opportunities. Management has plans to seek additional capital through private placements and public offerings of its common stock. There can be no assurance that the Company will be successful in accomplishing its objectives. Without such additional capital, the Company may be required to cease operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence.

Liquidity and Capital Resources

As of March 31, 2017, the Company’s total current assets were $189,036 and total current liabilities were $7,108,030 resulting in a working capital deficit of $6,918,994. On March 31, 2017, the Company had an accumulated deficit of $10,099,456.

For the fiscal year ended March 31, 2017 the Company’s accrued payroll balance increased $806,166 as a result of officers deferring receipt of their contractual compensation to help provide cash for operations. In addition, the Company received net advances from stockholders of $224,964 to pay down payables, and $20,000 in proceeds from debt purchase agreement.

Cash and cash equivalents on March 31, 2017 were $62,658 an increase of $18,836 from March 31, 2016.

Operating activities provided cash of $111,963 in the fiscal year ended March 31, 2017 compared to providing cash of $238,149 during the fiscal year ended March 31, 2016.

There was no investing activity in the fiscal year end March 31, 2017 and 2016.

Financing activities used cash of $93,127 during the year ended March 31, 2017, compared to using cash of $221,851 during the year ended March 31, 2016. Financing activities during fiscal 2017 include proceeds from debt purchase agreement of $20,000, and net of advances from stockholders of $224,964, less payments of $331,651 to revolving loan and $6,440 to capital leases.

Off-Balance Sheet Arrangements

As of March 31, 2017, the Company had no off balance sheet arrangements that have had or that would be expected to be reasonably likely to have a future material effect on the Company’s consolidated financial condition, changes in consolidated financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Outlook

The Company believes that its future success will depend upon its ability to enhance and grow its business. The Company’s current anticipated levels of revenues and cash flow are subject to many uncertainties and cannot be assured. In order to have sufficient cash to meet anticipated requirements for the next twelve months, the Company requires additional financing. The inability to generate sufficient cash from operations or to obtain required additional funds could require the Company to curtail its operations. There can be no assurance that acceptable financing to fund ongoing operations can be obtained on suitable terms, if at all. If the Company is unable to obtain the financing necessary to support its operations, it may be unable to continue as a going concern. In that event, the Company may be forced to cease operations.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a “smaller reporting company,” as defined in Rule 12b-2 of the Exchange Act, we are not required to provide the information called for by this Item.

Table of Contents

ITEM 8. FINANCIAL STATEMENTS

THE PULSE NETWORK, INC.

Index to Consolidated Financial Statements

			Page

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM			12

CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED March 31, 2017 and 2016:			13

CONSOLIDATED BALANCE SHEETS			13

CONSOLIDATED STATEMENT OF OPERATIONS			14

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIENCY			15

CONSOLIDATED STATEMENT OF CASH FLOWS			16

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS			17

Table of Contents

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors

The Pulse Network, Inc.

We have audited the accompanying consolidated balance sheets of The Pulse Network, Inc. (the “Company”) as of March 31, 2017 and 2016 and the related consolidated statements of operations, changes in stockholders’ deficiency, and cash flows for the years then ended. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated 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 consolidated financial statements are free of material misstatement. The Company was not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits 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 Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits include examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. Our audits also include assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Company as of March 31, 2017 and 2016 and the consolidated results of its operations, changes in its stockholders’ deficit, and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company has recurring losses from operations, negative working capital, and a stockholders’ deficit. These conditions, among others, raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans concerning these matters are also described in the consolidated financial statements. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Anton & Chia, LLP

Newport Beach, California

February 12, 2018

Table of Contents

THE PULSE NETWORK, INC.
CONSOLIDATED BALANCE SHEETS
MARCH 31, 2017 and MARCH 31, 2016

	March 31,			March 31,
	2017			2016
ASSETS

CURRENT ASSETS:
Cash	$	62,658		$	43,822
Accounts receivable at March 31, 2017 and March 31, 2016 respectively		112,891			120,565
Prepaid expenses and deposits		13,487			6,772

Total current assets		189,036			171,159

PROPERTY AND EQUIPMENT, net		-			48,109

INTANGIBLE ASSESTS, net		-			788,323

OTHER ASSETS:
Other assets		23,714			34,077

TOTAL ASSETS	$	212,750		$	1,041,668

LIABILITIES AND STOCKHOLDERS' DEFICIENCY

CURRENT LIABILITIES:
Revolving loan	$	1,335,901		$	1,667,552
Debt purchase agreement, net discount		(360	)		1,116
Promissory note		670,000			-
Convertible debenture, net discount		105,241			-
Derivative liabilities		239,798			182,140
Accounts payable		550,316			874,071
Accrued compensation		2,719,999			1,913,833
Accrued expenses		259,065			263,051
Current portion of capital lease obligations		1,023			6,440
Deferred revenue		327,795			328,007
Client funds pass thru liability		26,924			26,594
Advances from stockholders		316,361			91,397
Current portion of note payable related party		64,813			64,813
Note Payable - stockholders		110,100			110,100
Current portion of related party loan		121,500			121,500
Advances from affiliates		193,800			193,800
Current portion of deferred compensation		65,754			64,938

Total current liabilities		7,108,030			5,909,352

DEFERRED COMPENSATION, net of current portion		689,706			706,453
PROMISSORY NOTE		-			670,000
CONVERTIBLE DEBENTURE, net discount		-			69,274
CAPITAL LEASE OBLIGATIONS, net of current portion		-			1,023
SECURITY DEPOSIT		1,146			-
RELATED PARTY LOAN, net of current portion		56,000			56,000

COMMITMENTS AND CONTINGENCIES
REDEEMABLE COMMON STOCK, 4,500,000 shares issued and outstanding at March 31, 2017 and 2016		205,160			205,160
STOCKHOLDERS' DEFICIENCY
Undesignated convertible preferred stock, authorized 25,000,000 shares
designated as follows:
Series A convertible preferred stock, $0.001 par value, authorized,
issued and outstanding 1,000		1			1
Series B convertible preferred stock, $0.001 par value, authorized,
issued and outstanding 15,000,000		15,000			15,000
Series C convertible preferred stock, $0.001 par value, authorized,
issued and outstanding 500,000		500			500
Common stock: $0.001 par value, authorized, 500,000,000 shares;
issued and outstanding, 720,544,746 and 405,391,746 shares, respectively		720,554			405,392
Additional paid-in capital		1,516,109			1,703,981
Accumulated deficit		(10,099,456	)		(8,700,468	)

Total stockholders' deficiency		(7,642,132	)		(6,370,434	)

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY	$	212,750		$	1,041,668

The accompanying notes are an integral part of these consolidated financial statements

Table of Contents

THE PULSE NETWORK, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 2017 AND 2016

	2017			2016

NET SALES	$	2,337,222		$	3,834,949

COST OF SALES		422,574			741,598

GROSS PROFIT		1,914,648			3,093,351

SELLING EXPENSES		25,306			82,902
GENERAL AND ADMINISTRATIVE EXPENSES		2,815,654			3,801,940

NET LOSS FROM OPERATIONS		(926,312	)		(791,491	)

OTHER INCOME		-			550,100
IMPAIRMENT LOSS		-			(1,231,396	)
DERIVATIVE EXPENSE		(159,276	)		(211,327	)
INTEREST EXPENSE		(313,400	)		(414,152	)

NET LOSS	$	(1,398,988	)	$	(2,098,266	)

NET LOSS PER COMMON SHARE, basic and diluted	$	(0.00	)	$	(0.01	)

WEIGHTED AVERAGE SHARES USED IN PER SHARE
COMPUTATION, basic and diluted		692,370,727			173,195,939

The accompanying notes are an integral part of these consolidated financial statements

Table of Contents

THE PULSE NETWORK, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIENCY

FOR THE YEARS ENDED MARCH 31, 2017 AND 2016

						Preferred																Additional
	Redeemable Common Stock					Series A				Series B				Series C				Common				Paid-in			Accumulated
	Shares		Amount			Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Capital			Deficit			Total

Balance March 31, 2015	4,500,000		$	225,000			1,000	$	1		15,000,000	$	15,000		-	$	-		100,002,563	$	100,003	$	818,305		$	(6,602,202	)	$	(5,463,232	)

Common shares issued as compensation for consulting services	-			-			-		-		-		-		-		-		3,000,000		3,000		13,500			-			16,500
Common shares issued in private placement transactions	-			-			-		-		-		-		-		-		50,034,016		56,956		160,544			-			217,500
Redeemable common stock issued for deferred financing costs	(4,500,000	)		(19,840	)		-		-		-		-		-		-		4,500,000		4,500		15,340			-			19,840
Stock-based compensation	-			-			-		-		-		-		-		-		-		-		43,903			-			43,903
Common shares issued upon conversion of debt	-			-			-		-		-		-		-		-		6,730,769		6,731		7,269			-			14,000
Common shares issued under convertible promissory note agreement	-			-			-		-		-		-		-		-		8,542,398		8,542		38,441			-			46,983
Common shares issued under debt purchase agreement	-			-			-		-		-		-		-		-		232,582,000		225,659		(98,839	)		-			126,820
Application of derivative liabilty for conversion of debt via common stock	-			-			-		-		-		-		-		-		-		-		206,018			-			206,018
Series C converitible preferred stock issued under credit agreement	-			-			-		-		-		-		500,000		500		-		-		499,500			-			499,500
Net loss	-			-			-		-		-		-		-		-		-		-		-			(2,098,266	)		(2,098,266	)

Balance March 31, 2016	-		$	205,160			1,000	$	1		15,000,000	$	15,000		500,000	$	500		405,391,746		405,391		1,703,981			(8,700,468	)		(6,370,434	)

Stock-based compensation	-			-			-		-		-		-		-		-		-		-		40,164			-			40,164
Common shares issued under debt purchase agreement	-			-			-		-		-		-		-		-		315,163,000		315,163		(281,623	)		-			33,540
Application of derivative liabilty for conversion of debt via common stock	-			-			-		-		-		-		-		-		-		-		53,587			-			53,587
Series C converitible preferred stock issued under credit agreement	-			-			-		-		-		-		-		-		-		-		-			-			-
Net loss	-			-			-		-		-		-		-		-		-		-		-			(1,398,988	)		(1,398,988	)

Balance March 31, 2017	-		$	205,160			1,000	$	1		15,000,000	$	15,000		500,000	$	500		720,554,746		720,554		1,516,109			(10,099,456	)		(7,642,132	)

The accompanying notes are an integral part of these consolidated financial statements

Table of Contents

THE PULSE NETWORK, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED MARCH 31, 2017 AND 2016

	2017			2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(1,398,988	)	$	(2,098,266	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Stock-based compensation		40,164			43,903
Stock-based expense		-			16,500
Depreciation		48,109			39,687
Amortization of intangible assets		788,324			289,612
Non cash interest financing expense		-			325,000
Other income (expenses)		-			(550,100	)
Impairment loss		-			1,231,396
Derivative expense		159,276			211,327
Changes in operating assets and liabilities:
Accounts receivable		7,674			104,688
Prepaid expenses and deposits		(6,715	)		70,813
Other assets		10,363			846
Accounts payable		(323,755	)		217,539
Accrued compensation		806,166			726,084
Accrued expenses		(3,986	)		(226,659	)
Deferred revenue		(213	)		(128,108	)
Client funds pass thru		330			294
Security deposit		1,146			-
Deferred compensation		(15,932	)		(36,409	)

Net cash provided by operating activities		111,963			238,149

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from the issuance of common stock		-			217,500
Proceeds from related party loan		-			56,000
Net proceeds from revolving loan		(331,651	)		(623,388	)
Proceeds from debt purchase agreement		20,000			140,000
Net of advances from stockholders		224,964			-
Payments of capital lease obligations		(6,440	)		(11,963	)

Net cash used for financing activities		(93,127	)		(221,851	)

NET INCREASE IN CASH		18,836			16,298
CASH:
Beginning of period		43,822			27,524

End of period	$	62,658		$	43,822
SUPPLEMENTAL CASH FLOWS DISCLOSURE
Convertible debenture converted into common stock	$	-		$	14,000
Reduction of obligation on redeemable common stock	$	-		$	19,840
TCA revolving loan converted into common stock	$	-		$	46,983

The accompanying notes are an integral part of these consolidated financial statements

16

Table of Contents

THE PULSE NETWORK, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2017 AND 2016

1. ORGANIZATION AND NATURE OF BUSINESS

The Pulse Network, Inc. (the “Company”) was founded in 2002 as Exgenex, Inc., a New York Corporation. In 2008, the Company incorporated in Massachusetts under the name CrossTech Group, Inc. In 2011 the Company changed its name to The Pulse Network, Inc. The Company provides a cloud-based platform focused on content marketing and event solutions.

Pulse Network Management LLC (PNM) is a wholly owned subsidiary of The Pulse Network Inc. PNM’s sole function is leasing employees to the Company. The entire workforce of the Company is leased from PNM.

The Pulse Network, Inc., a Massachusetts corporation, also the beneficial owner of The Pulse Network Management, LLC, a Massachusetts limited liability company. The Pulse Network Management, LLC reports all employee and payroll related expenses for The Pulse Network, Inc., a Massachusetts corporation.

2. GOING CONCERN

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation - The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All material intercompany transactions and balances have been eliminated in consolidation.

Use of Estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported amounts of revenues and expenses. Actual results could differ from these estimates.

Reclassifications - Certain previously reported amounts have been reclassified to conform to the current year’s presentation. The reclassification had no effect on the previously reported net income.

Cash - The Company maintains its cash balances in one financial institution. The balances are insured by the Federal Deposit Insurance Corporation up to $250,000. Bank deposits at times may exceed federally insured limits. The Company has not experienced any losses in such accounts.

Accounts Receivable - Accounts receivable represent balances due from customers. Credit risk associated with these balances is evaluated by management relative to financial condition and past payment experience. Balances that remain outstanding after management has used reasonable collection efforts are written off through a charge to the allowance for doubtful accounts.

Table of Contents

Property and Equipment - Property and equipment is stated at cost. Depreciation and amortization are provided using the straight-line method over the estimated useful lives of the related assets, which range from three to five years. Repairs and maintenance costs are expensed as incurred.

Impairment of Long-Lived Assets – Long-lived assets, such as property, equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset or asset group to estimated future undiscounted net cash flows of the related asset or group of assets over their remaining lives. If the carrying amount of an asset exceeds its estimated future undiscounted cash flows, an impairment charge is recognized for the amount by which the carrying amount exceeds the estimated fair value of the asset. Impairment of long-lived assets is assessed at the lowest levels for which there are identifiable cash flows that are independent of other groups of assets. The impairment of long-lived assets requires judgments and estimates. If circumstances change, such estimates could also change.

Concentrations of Sales to Certain Customers – During 2017 the Company had sales to two customers A and B that accounted for approximately 25% of the total revenue during 2017. Accounts receivable from two customers A and C accounted for approximately 81% of total accounts receivable at March 31, 2017.

Revenue Recognition - The Company’s revenue consists principally of event platform revenue derived from management of customer events and recognized at the conclusion of the event and content marketing platform and other revenue are derived from providing ongoing solutions related to customer website content and are recognized as services are provided over the life of the contract.

Deferred Revenue - Deferred revenue consists of billings or payments received for future events in advance of revenue recognition. The Company recognizes these billings and payments as revenue when the revenue recognition criteria are met.

Income Taxes – An asset and liability approach is used for financial accounting and reporting for income taxes. Deferred income taxes arise from temporary differences between income tax and financial reporting and principally relate to recognition of revenue and expenses in different periods for financial and tax accounting purposes and are measured using currently enacted tax rates and laws. In addition, a deferred tax asset can be generated by net operating loss carry forwards (“NOLs”). If it is more likely than not that some portion or all of a deferred tax asset will not be realized, a valuation allowance is recognized.

The Company recognizes in its consolidated financial statements the impact of a tax position if that position is more likely than not of being sustained on audit, based on the technical merits of the position. The Company’s policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. The Company did not have any unrecognized tax benefits or accrued interest and penalties during the years ended March 31, 2017 and 2016 and does not anticipate having any unrecognized tax benefits over the next twelve months. The Company is subject to audit by the IRS for tax periods commencing January 1, 2011.

Derivative Financial Instruments

The Company evaluates all of its agreements to determine if such instruments have derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments, the Company uses the Black-Scholes-Merton option pricing model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. As of March 31, 2017, and 2016, the Company’s only derivative financial instrument was an embedded conversion feature associated with convertible notes payable due to certain provisions that allow for a change in the conversion price based on a percentage of the Company’s stock price at the date of conversion.

Fair Value Measurements

The Company applies the provisions of ASC 820-10, “Fair Value Measurements and Disclosures.” ASC 820-10 defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The three levels of valuation hierarchy are defined as follows:

	·	Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets.

	·	Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

	·	Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement.

Table of Contents

For certain financial instruments, the carrying amounts reported in the balance sheets for cash and current liabilities, including convertible notes payable, each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest.

The Company uses Level 2 inputs for its valuation methodology for derivative liabilities as their fair values were determined by using the Black-Scholes-Merton pricing model based on various assumptions. The Company’s derivative liabilities are adjusted to reflect fair value at each period end, with any increase or decrease in the fair value being recorded in results of operations as adjustments to fair value of derivatives.

At March 31, 2017 and 2016, the Company identified the following liabilities that are required to be presented on the balance sheet at fair value:

	Fair Value		Fair Value Measurements at
	As of		March 31, 2017
Description	March 31, 2017		Using Fair Value Hierarchy
			Level 1		Level 2		Level 3
Conversion feature on convertible notes	$	239,798	$	-	$	182,140	$	-

Total	$	239,798	$	-	$	182,140	$	-

	Fair Value		Fair Value Measurements at
	As of		March 31, 2016
Description	March 31, 2016		Using Fair Value Hierarchy
			Level 1		Level 2		Level 3
Conversion feature on convertible notes	$	239,798	$	-	$	182,140		-

Total	$	239,798	$	-	$	182,140		-

The Company did not identify any other non-recurring assets and liabilities that are required to be presented in the consolidated balance sheets at fair value in accordance with ASC 815.

4. ACQUISTION OF YOU EVERYWHERE NOW, LLC

On October 3, 2014, the Company’s wholly-owned subsidiary, The Pulse Network, Inc., a Massachusetts corporation (Pulse Massachusetts) acquired a 100% membership interest in You Everywhere Now, LLC, a California limited liability company (“You Everywhere Now”) from MikeKoenigs.com Inc. (seller). You Everywhere Now, in turn, holds 100% of the membership interests of VoiceFollowUp, LLC, a California limited liability company, and Traffic Geyser, LLC, a California limited liability company. Closing of the transaction under the Securities Purchase Agreement was conditioned upon closing and funding under the senior secured revolving credit facility agreement with TCA Global Credit Master Fund, LP as described in note 9.

The Company paid consideration to the seller comprised of a promissory note payable to the seller in the amount of $1,170,000 and cash of $1,047,560 financed through debt proceeds. The Company assumed liabilities of the seller totaling $244,450. The Company allocated the purchase price to intangible assets with a fair value of $1,738,750 and accounts receivable of $29,127. The excess of the consideration paid over the fair value of the assets acquires totaling $694,133 was recorded as goodwill on the Company’s balance sheet for year ended March 31, 2015. The Company estimated the useful lives of the various identifiable intangible assets acquired to be between two and fifteen years.

During the quarter ended December 31, 2015 the Company determined that circumstances indicated that the fair value of goodwill and intangible assets acquired in the You Everywhere Now acquisition was impaired. The Company determined based on its analysis of fair value of these assets at December 31, 2015 that goodwill should be written off in its entirety and the customer lists should be written down to their estimated fair value of $762,467 and amortized over their estimated remaining useful life of two years. The total amount of the impairment loss recognized of $1,231,396 consists of goodwill in the amount of $694,133, and intangible assets in the amount of $537,263.

Table of Contents

During the quarter end June 30, 2016, the Company wrote off the remaining balance of intangible assets due to the continuous decline in sales related to the assets acquired in the You Everywhere Now acquisition.

Intangible assets at March 31, 2017 and March 31, 2016 consist of the following:

	March 31,			March 31,
		2017			2016
Total customer list-active & non-active	$	762,467		$	762,467
Non-compete agreement		191,900			191,900
Trademarks		185,340			185,340
Software/database		61,779			61,779
		1,201,486			1,201,486
Accumulated amortization		(413,163	)		(1,201,486	)

Intangible assets, net	$	-		$	788,323

The Company incurred direct cost related to the acquisition of You Everywhere Now totaling $212,967 which is reported in the Company’s statement of operations for the year ended March 31, 2015 as acquisition related expenses.

5. ASSET PURCHAE AGREEMENT

On October 5, 2015, the Company entered into an Asset Purchase Agreement with MikeKoenigs.com Inc. (“Buyer”). The Company sold full ownership, intellectual property and administrative rights to all Publish and Profit courses and products, including the main product plus certification products, all Top Gun Consulting Toolkit courses and products, including the main product plus certification products, the Publish and Profit Facebook Group, the Publish and Profit Kajabi Site, all Publish and Profit digital assets on Amazon S3, Youtube or Vimeo, all Publish and Profit customer records, spreadsheets, and customer data, all You Everywhere Now “YEN” assets including the You Everywhere Now Facebook Group. The Company and Buyer agreed to decrease the Promissory Note due to Buyer from $1,170,000 to $670,000, along with $45,600 of interest accrued and payable as of June 30, 2015, $4,500 in certain outstanding miscellaneous expenses, and sublease of certain office space described in Settlement Agreement is terminated as of September 1, 2015. The forgiveness of the note payable balance in the amount of $550,100 was recorded in other expenses as of December 31, 2015. Pursuant to that certain Promissory Note, dated October 3, 2014, in the principal amount of $1,250,000, made by The Pulse Network, Inc., a Massachusetts corporation (the “Pulse Massachusetts”), to MikeKoenigs.com, Inc., a Minnesota corporation (“MikeKoenigs.com”), the Pulse Massachusetts owes $670,000 to MikeKoenigs.com as of March 31, 2017.

Table of Contents

6. PROPERTY AND EQUIPMENT

Property and equipment at March 31, 2017 and 2016 consists of the following:

	2017			2016
Computer equipment	$	197,033		$	197,033
Audio and video equipment		109,071			109,071
Furniture and fixtures		12,478			12,478
Office equipment		55,189			55,189
Event equipment		73,178			82,020
		446,949			455,791
Accumulated depreciation		(446,949	)		(407,682	)

Property and equipment, net	$	-		$	48,109

During the quarter end June 30, 2016, the Company wrote off the remaining balance of property and equipment.

7. RELATED PARTY TRANSACTIONS

Advances from stockholders at March 31, 2017 and 2016 consists of non-interest bearing advances of $316,361 and $91,397, from Stephen J. Saber and Nicholas C. Saber.

Note payable related party at March 31, 2017 and 2016 consists of a loan from John C. Saber, the father of the three majority stockholders. Under the terms of the note agreement, dated May 15, 2014, the Company borrowed $100,000 repayable in monthly principal and interest installments of $4,614 through maturity in May 2016. The note accrues interest at 10% per annum. The unpaid note payable related party balance is $64,813 and $64,813 at March 31, 2017 and 2016.

Related party loan at March 31, 2017 consists of a loan previously due to Stephen Saber in the amount of $111,500 and Nicholas C. Saber in the amount of $10,000 which were transferred to CrossTech Partners, LLC. Stephen, Nicholas and John Saber own 100% of CrossTech Partners, LLC. The loan bears interest at 6.5% and matures with all unpaid principal and interest due on September 3, 2017.

Note payable – Saber Insurance Trust consists of a note dated September 3, 2013 under the terms of which the Company borrowed $110,100 from Saber Insurance Trust, of which the three majority stockholders are primary beneficiaries. The original loan terms stated repayment of the loan was to be made in full by June 1, 2014 including interest at 8.6% per annum. During the year ended March 31, 2016 the maturity date of the loan was extended to June 30, 2016. The Company received net proceeds of $103,000 reflecting a discount in the amount of $7,100 representing the interest to be earned over the term of the note. The discount was amortized through a charge to interest expense using the interest method over the original term of the loan.

The Company leases its office space under a non-cancelable lease agreement with a related party which expires April 30, 2024. For each of the years ending March 31, 2018 through 2024 the minimal rent payment will be $131,433 and $21,906 for the year ending March 31, 2025.

Total rent expense for the existing lease, including common area, maintenance, taxes, insurance and utilities, was $199,172 and $215,743 for the years ended March 31, 2017 and 2016, respectively.

8. ACCRUED COMPENSATION

Accrued compensation at March 31, 2017 and 2016 includes $2,678,445 and $1,870,046 respectively, of amounts due to the three officers and director’s payable under the terms of their employment agreements. These officers have elected to defer receipt of these amounts until the Company is in a better liquidity position.

Table of Contents

9. DEFERRED COMPENSATION

In September 2004, the Company entered into a deferred compensation arrangement with a former stockholder. Under the terms of the arrangement, beginning in January 2005, the former stockholder receives semi-monthly payments of $4,167 through December 2024. The amount included on the Company’s balance sheets at March 31, 2017 and 2016 represents the net present value of the remaining payments calculated using a discount rate of 5%. The amount of deferred compensation expected to be paid within twelve months of the balance sheet date is classified as a current liability with the remainder classified as non-current. Future maturities of this obligation are as follows:

Year ending March 31:
2018		65,754
2019		69,121
2020		72,662
2021		76,383
2022		80,295
Thereafter		391,245
Total	$	755,460

10. REVOLVING LOAN

On October 6, 2014, the Company borrowed $2,400,000 from TCA Global Credit Master Fund, LP (the “Lender”) pursuant to the terms of a Senior Secured Revolving Credit Facility Agreement, dated September 30, 2014 (the “Credit Agreement”), among the Company, as borrower, and certain of its subsidiaries (the “Subsidiary Guarantors”) as joint and several guarantors, and the Lender. The funds have been and will be used for general corporate purposes, including repayment of certain obligations of the Company. Under the Credit Agreement, the Company may borrow an amount equal to the lesser of 80% of the amount in a certain Lock Box Account (as defined in the Credit Agreement) and the revolving loan commitment, which initially is $1,400,000. The Company may request that the revolving loan commitment be raised by various specified amounts at specified times, up to a maximum of $5,000,000. In each case, the decision to grant any such increase in the revolving loan commitment is at the Lender’s sole discretion. The loan matures on the earlier of March 30, 2015, subject to a six-month extension at the request of the Company, or upon 60 days written notice by the Lender. The Company may prepay the Revolving Loan (as defined in the Credit Agreement), without penalty, provided it is repaid more than 180 days prior to maturity date. If Company prepays more than eighty percent (80%) of the Revolving Loan Commitment within 9 days following the effective date, there is a prepayment penalty equal to 2.5% of the Revolving Loan Commitment (as defined in the Credit Agreement).

The loan bears interest at the rate of 11% per annum, and the Company will pay certain fees, as set forth in the Credit Agreement. In addition, the Company paid an additional advisory fee of $450,000 to Lender as of December 31, 2014.

On October 30, 2014, the Company issued to the Lender 4,500,000 shares of redeemable common stock in payment of the advisory fee as stated in the credit agreement. The lender could require the Company to redeem these shares for an amount up to $450,000 one year from the effective date of the agreement. On December 16, 2014, the Company and the lender entered into the first amendment to the credit agreement under which the available borrowing amount was increased and the original advisory fee in the amount of $450,000 was added to the outstanding loan amount with the lender and the shares issued on October 30, 2014 were deemed to be in settlement of a new advisory fee in the amount of $225,000. Under the terms of the amendment these shares are redeemable at the option of the lender for an amount up to $225,000 as defined in the agreement. As the redemption option is outside the control of the Company the redemption value of these shares has been recorded in temporary equity on the Company’s balance sheet at December 31, 2014. In addition to the advisory fee described above the Company incurred fees totaling $896,350 in order to obtain this debt financing. These fees are included in general and administrative expense as of March 31, 2015.

On September 14, 2015, TCA sold the 4,500,000 redeemable common shares to a third party for net proceeds of $19,840. As a result of the sale of the redeemable common shares by TCA the Company is obligated to issue additional redeemable common shares to TCA which have a fair value of $205,160 or to settle this obligation in cash. As the redemption option is outside the control of the Company the redemption value of these shares has been recorded in temporary equity on the Company’s balance sheet at March 31, 2017 and 2016.

In addition to the advisory fee described above the Company incurred fees totaling $896,350 in order to obtain this debt financing. These fees were included in general and administrative expense as of March 31, 2015.

On April 1, 2015, the Company and the lender entered into a second amendment to the Credit Agreement under which additional financing fees totaling $325,000 were added to the balance of the revolving loan and the maturity date was extended to November 1, 2016. The additional financing fee is included in general and administrative expenses for the year ended March 31, 2016.

Table of Contents

On October 1, 2015, TCA Global Credit Master Fund, LP, elected to convert $46,983 of outstanding principle due under the convertible promissory note agreement into 8,542,398 shares of the Company's common stock at a conversion price of $.0055 per share.

Effective December 3, 2015, the Company and the lender entered into a third amendment to the Credit Agreement under which the Company and lender agreed to modify and revise the estimated over-advance payment from $4,500 per day to $1,667 per day for the remainder of the term of the Credit Agreement. The Company also agreed to pay the lender a $500,000 advisory fee by issuing the lender shares of Series C Convertible Preferred Stock. The advisory fee is included in general and administrative expenses for the year ended March 31, 2016.

Pursuant to that certain Senior Secured Credit Facility Agreement dated as of September 30, 2014, but made effective as of October 3, 2014, by and among, The Pulse Network, Inc., a Nevada corporation (the “Company”), The Pulse Network Management, LLC, a Massachusetts limited liability company, and TCA Global Credit Master Fund, LP, a Cayman Islands limited partnership (“TCA Global Credit Master Fund”), as amended, the Company owes $1,335,901 to TCA Global Credit Master Fund as of March 31, 2017.

11. DEBT PURCHASE AGREEMENT

The Company entered into that certain Debt Purchase Agreement (the "Debt Purchase Agreement"), dated December 31, 2015, by and among the Company, TCA and Rockwell Capital Partners ("Rockwell"), pursuant to which TCA assigned to Rockwell $300,000 of debt (the "Assigned Debt") evidenced by that certain Second Replacement Revolving Note, dated as of April 1, 2015, in the principal amount of $2,828,037.03 made by the Company to TCA. Under the Debt Purchase Agreement, the Assigned Debt will be assigned from TCA to Rockwell in six tranches of $50,000 each, with the first tranche having been assigned with the execution of the Debt Purchase Agreement, and tranches two though six, taking place 30 days after the assigned of the prior $50,000 tranche assignment.

On January 25, 2016, pursuant to the terms and conditions of the Debt Purchase Agreement, the Company made that certain Fourth Replacement Revolving Note A, dated January 21, 2016, in the principal sum of $50,000 (the "Third Replacement Revolving Note A") that certain Fourth Replacement Revolving Note A, dated January 21, 2016, in the principal sum of $1,867,589.48 (collectively, the "Two Fourth Replacement Revolving Notes"). Two Fourth Replacement Revolving Notes replace the Two Third Replacement Revolving Notes.

The Two Fourth Replacement Revolving Notes pay interest at a rate of 11% per annum. At any time while either of the Two Fourth Replacement Revolving Notes are outstanding, upon the occurrence of an Event of Default (as defined in the Two Fourth Replacement Revolving Notes), TCA or any other holder of either of the Two Fourth Replacement Revolving Notes, may convert all or any portion of the outstanding principal accrued and unpaid interest and any other sums due and payable or under any of the other Transaction Documents (such total amount, the "Conversion Amount") into shares of Common Stock of the Company (the "Conversion Shares") at a price equal to: (i) the Conversion Amount (the numerator); divided by(ii) eighty-five percent (85%) of the lowest volume weighted average price of the Company's Common Stock during the five (5) trading days immediately prior to the conversion date, as indicated in the conversion notice (the denominator) (the "Conversion Price").

On January 4, 2016, the Company received $50,000 in the first purchase tranche from assignee of the debt. These proceeds were used to repay a portion of the revolving loan balance.

On January 4, 2016, the assignee of the debt purchase agreement converted $5,400 of the principle due to 2,000,000 shares of the Company’s common stock at a conversion price of $.0027 per share.

On January 6, 2016, the assignee of the debt purchase agreement converted $10,080 of the principle due to 4,000,000 shares of the Company’s common stock at a conversion price of $.00252 per share.

On January 8, 2016, the assignee of the debt purchase agreement converted $10,800 of the principle due to 6,000,000 shares of the Company's common stock at a conversion price of $.0018 per share.

On January 12, 2016, the assignee of the debt purchase agreement converted $10,560 of the principle due to 8,000,000 shares of the Company's common stock at a conversion price of $.00132 per share.

On January 15, 2016, the assignee of the debt purchase agreement converted $9,600 of the principle due to 8,000,000 shares of the Company's common stock at a conversion price of $.0012 per share.

On January 21, 2016, the assignee of the debt purchase agreement converted $3,560 of the principle due to 3,955,000 shares of the Company's common stock at a conversion price of $.0009 per share.

On January 27, 2016, the Company received proceeds of $50,000 in a second purchase tranche from assignee of the debt. These proceeds were used to repay a portion of the revolving loan balance.

Table of Contents

On January 27, 2016, the assignee of the debt purchase agreement converted $7,800 of the principle due to 10,000,000 shares of the Company's common stock at a conversion price of $.00078 per share.

On February 3, 2016, the assignee of the debt purchase agreement converted $6,600 of the principle due to 10,000,000 shares of the Company's common stock at a conversion price of $.00066 per share.

On February 5, 2016, the assignee of the debt purchase agreement converted $6,600 of the principle due to 10,000,000 shares of the Company's common stock at a conversion price of $.00066 per share.

On February 9, 2016, the assignee of the debt purchase agreement converted $6,600 of the principle due to 10,000,000 shares of the Company's common stock at a conversion price of $.00066 per share.

On February 11, 2016, the assignee of the debt purchase agreement converted $6,600 of the principle due to 10,000,000 shares of the Company's common stock at a conversion price of $.00066 per share.

On February 16, 2016, the assignee of the debt purchase agreement converted $5,400 of the principle due to 10,000,000 shares of the Company's common stock at a conversion price of $.00054 per share.

On February 19, 2016, the assignee of the debt purchase agreement converted $7,020 of the principle due to 13,000,000 shares of the Company's common stock at a conversion price of $.00054 per share.

On February 24, 2016, the assignee of the debt purchase agreement converted $5,780 of the principle due to 10,704,000 shares of the Company's common stock at a conversion price of $.00054 per share.

On March 8, 2016, the Company received proceeds of $40,000 in a third purchase tranche from assignee of the debt. These proceeds were used to repay a portion of the revolving loan balance.

On March 9, 2016, the assignee of the debt purchase agreement converted $5,040 of the principle due to 14,000,000 shares of the Company's common stock at a conversion price of $.00036 per share.

On March 11, 2016, the assignee of the debt purchase agreement converted $5,400 of the principle due to 15,000,000 shares of the Company's common stock at a conversion price of $.00036 per share.

On March 16, 2016, the assignee of the debt purchase agreement converted $3,600 of the principle due to 15,000,000 shares of the Company's common stock at a conversion price of $.00024 per share.

On March 22, 2016, the assignee of the debt purchase agreement converted $3,600 of the principle due to 15,000,000 shares of the Company's common stock at a conversion price of $.00024 per share.

On March 24, 2016, the assignee of the debt purchase agreement converted $2,700 of the principle due to 15,000,000 shares of the Company's common stock at a conversion price of $.00018 per share.

On March 29, 2016, the assignee of the debt purchase agreement converted $3,240 of the principle due to 18,000,000 shares of the Company's common stock at a conversion price of $.00018 per share.

On March 30, 2016, the assignee of the debt purchase agreement converted $3,240 of the principle due to 18,000,000 shares of the Company's common stock at a conversion price of $.00018 per share.

On April 1, 2016, the assignee of the debt purchase agreement converted $3,240 of the principle due to 18,000,000 shares of the Company's common stock at a conversion price of $.00018 per share.

On April 5, 2016, the assignee of the debt purchase agreement converted $2,400 of the principle due to 20,000,000 shares of the Company's common stock at a conversion price of $.00012 per share.

Table of Contents

On April 6, 2016, the assignee of the debt purchase agreement converted $2,400 of the principle due to 20,000,000 shares of the Company's common stock at a conversion price of $.00012 per share.

On April 8, 2016, the assignee of the debt purchase agreement converted $2,520 of the principle due to 21,000,000 shares of the Company's common stock at a conversion price of $.00012 per share.

On April 11, 2016, the assignee of the debt purchase agreement converted $2,620 of the principle due to 21,833,000 shares of the Company's common stock at a conversion price of $.00012 per share.

On May 2, 2016, the Company received proceeds of $20,000 in a fourth purchase tranche from assignee of the debt. These proceeds were used to repay a portion of the revolving loan balance.

On May 4, 2016, the assignee of the debt purchase agreement converted $2,640 of the principle due to 22,000,000 shares of the Company's common stock at a conversion price of $.00012 per share.

On May 9, 2016, the assignee of the debt purchase agreement converted $2,640 of the principle due to 22,000,000 shares of the Company's common stock at a conversion price of $.00012 per share.

On May 10, 2016, the assignee of the debt purchase agreement converted $3,240 of the principle due to 27,000,000 shares of the Company's common stock at a conversion price of $.00012 per share.

On May 12, 2016, the assignee of the debt purchase agreement converted $3,240 of the principle due to 27,000,000 shares of the Company's common stock at a conversion price of $.00012 per share.

On May 17, 2016, the assignee of the debt purchase agreement converted $3,240 of the principle due to 27,000,000 shares of the Company's common stock at a conversion price of $.00012 per share.

On May 18, 2016, the assignee of the debt purchase agreement converted $1,800 of the principle due to 30,000,000 shares of the Company's common stock at a conversion price of $.00006 per share.

On May 20, 2016, the assignee of the debt purchase agreement converted $1,800 of the principle due to 30,000,000 shares of the Company's common stock at a conversion price of $.00006 per share.

On May 24, 2016, the assignee of the debt purchase agreement converted $1,760 of the principle due to 29,330,000 shares of the Company's common stock at a conversion price of $.00006 per share.

Debt purchase agreement at March 31, 2017 and 2016 consist of the following:

	March 31,			March 31,
	2017			2016
Debt purchase agreement dated January 21, 2016; non-interest bearing; due April 28, 2017; convertible into shares of common stock at 60% of the lowest trading price 10 days prior to conversion		-			13,180
Unamortized debt discount		-			(12,064	)
Debt purchase agreement, net discount	$	(360	)	$	1,116

Table of Contents

A rollfoward of the debt purchase agreement from March 31, 2015 to March 31, 2017 is below:

Debt purchase agreement, net discount March 31, 2015	$	-
Issued for cash		140,000
Conversion to common stock		(126,820	)
Debt discount related to new convertible notes		(140,000	)
Amortization of debt discounts		127,936
Debt purchase agreement, net discount March 31, 2016		1,116
Issued for cash		20,000
Conversion to common stock		(33,540	)
Debt discount related to new convertible notes		(20,000	)
Amortization of debt discounts		32,064
Debt purchase agreement, net discount March 31, 2017	$	(360	)

As of March 31, 2017, the net balance of the debt purchase agreement is $(360). See Note 12 on conversion feature of convertible debt recorded as a derivative liability.

12. CONVERTIBLE DEBENTURE

On April 29, 2014, the Company issued a non-interest bearing convertible debenture. The purchaser of the debenture, Peak One Opportunity Fund, L.P, advanced the Company $175,000 in principle due three years from the issuance date. At any time, the purchaser may convert the amount outstanding at a conversion rate equal to 65% of the second lowest closing bid price of the Company’s common stock for the 20 trading days immediately preceding the date of conversion of the debenture. The Company determined there was a beneficial conversion feature with an intrinsic value of $77,404 on the issuance date. The debenture is convertible as of the effective date of the agreement and therefore the entire discount related to the beneficial conversion feature was recorded in additional paid-in capital and charged to interest expense during the quarter ended June 30, 2014. The Company also issued 500,000 shares of common stock with an aggregate fair value of $32,000 to the purchaser in connection with this agreement which is included in general and administrative expenses in the statement of operations for the year ended March 31, 2015.

On November 4, 2014, the purchaser elected to convert $35,000 of the principle amount into 2,153,846 shares of the Company’s common stock. On January 27, 2015 the purchaser elected to convert $18,000 of the principle amount into 4,615,384 shares of the Company’s common stock. On April 30, 2015 the original purchaser of this convertible debenture, Peak One Opportunity Fund, L.P, sold the note to a third party, Jordan Sayfie, for $122,000. On July 24, 2015, the new holder elected to convert $14,000 of the outstanding principle amount into 6,730,769 shares of the Company’s common stock.

Convertible debenture at March 31, 2017 and 2016 consist of the following:

	March 31,			March 31,
	2017			2016
Convertible debenture dated April 28, 2014; non-interest bearing; due April 28, 2017; convertible into shares of common stock at 65% of the 2nd lowest closing bid price 20 days prior to conversion	$	108,000		$	108,000
Unamortized debt discount		(2,759	)		(38,276	)
Convertible debenture, net discount	$	105,241		$	69,274

A rollfoward of the convertible debenture from March 31, 2015 to March 31, 2017 is below:

Convertible debenture, net discount, March 31, 2015	$	37,513
Issued for cash		-
Conversion to common stock		(14,000	)
Debt discount related to new convertible notes		-
Amortization of debt discounts		45,761
Convertible debenture, net discount March 31, 2016		69,274
Issued for cash		-
Conversion to common stock		-
Debt discount related to new convertible notes		-
Amortization of debt discounts		35,967
Convertible debenture, net discount March 31, 2017	$	105,241

Table of Contents

Pursuant to that certain Convertible Debenture, dated April 28, 2014, in the principal amount of $175,000, made by the Pulse Network, Inc., a Nevada corporation (the “Company”), to Peak One Opportunity Fund, L.P. “Peak One Opportunity Fund”), title to which Convertible Debenture was subsequently sold to Jordan Sayfie, pursuant to that certain Debenture Purchase Agreement dated April 30, 2015, by and among Peak One Opportunity Fund, Equity IQ, LLC, a Nevada limited liability company (“Equity IQ”) and Jordan Sayfie, the Company owes $108,000 to Jordan Sayfie as of March 31, 2017.

See Note 12 on conversion feature of convertible debenture recorded as a derivative liability

13. DERIVATIVE LIABILTY

The convertible notes payable discussed in Note 10 & 11 have a conversion price that can be adjusted based on the Company’s stock price which results in the conversion feature being recorded as a derivative liability.

The fair value of the derivative liability is recorded and shown separately under current liabilities. Changes in the fair value of the derivative liability is recorded in the statement of operations under other income (expense).

The Company uses a weighted average Black-Scholes-Merton option pricing model with the following assumptions to measure the fair value of derivative liability at March 31, 2017 and 2016:

	March 31,		March 31,
	2017		2016

Stock price	$	0.0002	$	0.0003
Risk free rate		1.03%		0.59%
Volatility		400%		400%
Conversion/ Exercise price	$	0.00006 to $0.00009	$	0.0002 to $0.0003
Dividend rate		0%		0%
Term (years)	0.01 to 0.08		0.68 to 1.08

The following table represents the Company’s derivative liability activity for each of the annual periods during the two years ended March 31, 2017:

Derivative liability balance, March 31, 2015	$	210,528
Issuance of derivative liability during the period		199,715
Underlying security converted into common stock		(206,018	)
Change in derivative liability during the period		22,085
Derivative liability balance, March 31, 2016		182,140
Issuance of derivative liability during the period		48,593
Underlying security converted into common stock		(53,587	)
Change in derivative liability during the period		62,652
Derivative liability balance, March 31, 2017	$	239,798

Table of Contents

14. INCOME TAXES

The Company had federal NOL carry forwards of approximately $5.7 million, resulting in a deferred tax asset of approximately $2.2 million, at March 31, 2017. The NOL is available to offset future taxable income and begins to expire in 2035. Under Section 382 of the Internal Revenue Code, the NOL may be limited as a result of a change in control. At March 31, 2017, the Company established valuation allowances equal to the full amount of the net deferred tax assets due to the uncertainty of the utilization of the operating losses in future periods.

For the years ended March 31, 2017 and 2016, no amounts have been recognized for uncertain tax positions and no amounts have been recognized related to interest or penalties related to uncertain tax positions. The Company has determined that it is not reasonably likely for the amounts of unrecognized tax benefits to significantly increase or decrease within the next 12 months.

15. CAPITAL LEASE OBLIGATIONS

The Company leases certain equipment under capital leases expiring in various years through 2018. The net book value of assets held under capital leases at March 31, 2017 and 2016 is $3,924 and $12,094, respectively. The annual repayments of capital lease obligations at March 31, 2017 are as follows:


2018		1,036
Total minimum lease payments		1,036
Less amount representing interest		13
Present value of minimum lease payments		1,023
Present value of minimum lease payments due within one year		1,023
Present value of net minimum lease payments due beyond one year	$	0

16. STOCKHOLDERS’ DEFICIENCY

Series A and series B convertible preferred stock have the same voting, dividend and liquidation rights as holder of common stock. Holders of series A and series B convertible preferred stock may convert their preferred shares into 1 and 5 shares, respectively of common stock.

Pulse Network, Inc. 10-K