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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2025

☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from ______ to _______

Commission File Number 000-54524

APPLIFE DIGITAL SOLUTIONS, INC.

(Name of small business issuer in its charter)

Nevada		30-0678378
(State of incorporation)		(I.R.S. Employer Identification No.)

50 California St, #1500

San Francisco, CA 94111

(Address of principal executive offices)

1 (415) 439 5260

(Registrant's telephone number)

Securities registered pursuant to Section 12(b) of the Act: None.

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
N/A	N/A	N/A

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 ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Sec.232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). ☒ Yes ☐ No

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.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

☐ Yes ☒ No

As of May 9, 2025 a total of 160,893,635 shares of our common stock were outstanding.

APPLIFE DIGITAL SOLUTIONS, INC.*

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION	1
ITEM 1. UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS	1
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	15
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	21
ITEM 4. CONTROLS AND PROCEDURES	21
PART II - OTHER INFORMATION	22
ITEM 1. LEGAL PROCEEDINGS.	22
ITEM 1A. RISK FACTORS.	22
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.	22
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.	22
ITEM 4. MINE SAFETY DISCLOSURES.	22
ITEM 5. OTHER INFORMATION.	22
ITEM 6. EXHIBITS	22

Special Note Regarding Forward-Looking Statements

Information included in this Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended ("Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended ("Exchange Act"). This information may involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of APPlife Digital Solutions, Inc. (the "Company"), to be materially different from future results, performance or achievements expressed or implied by any forward-looking statements. Forward-looking statements, which involve assumptions and describe future plans, strategies and expectations of the Company, are generally identifiable by use of the words "may," "will," "should," "expect," "anticipate," "estimate," "believe," "intend," or "project" or the negative of these words or other variations on these words or comparable terminology. These forward-looking statements are based on assumptions that may be incorrect, and there can be no assurance that these projections included in these forward-looking statements will come to pass. Actual results of the Company could differ materially from those expressed or implied by the forward-looking statements as a result of various factors. Except as required by applicable laws, the Company has no obligation to update publicly any forward-looking statements for any reason, even if new information becomes available or other events occur in the future.

*Please note that throughout this Quarterly Report, except as otherwise indicated by the context, references in this report to "Company", "ALDS", "we", "us" and "our" are references to APPlife Digital Solutions, Inc.

APPLIFE DIGITAL SOLUTIONS, INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

		March 31, 2025		June 30, 2024
				(Audited)
ASSETS
Current assets
Cash	$	9,511	$	22,894
Prepaid expenses		13,468		38,797
Total current assets		22,979		61,691

Deposit on asset purchase		180,730		100,000
Total assets		203,709		161,691

LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities
Accounts payable and accrued expenses	$	585,426	$	411,053
Common stock payable		4,800		-
Notes payable to shareholders, net		1,451,153		1,019,809
Notes payable		-		26,474
Derivative liabilities		291,299		728,351
Due to officer		73,777		68,500
Total current liabilities		2,406,455		2,254,187

Total liabilities		2,406,455		2,254,187

Commitments and contingencies

Stockholders’ deficit
Common stock, $0.001 par value, 500,000,000 shares authorized; 160,893,635 and 150,543,635 shares issued and outstanding as of both March 31, 2025 and June 30, 2024		160,895		150,545
Additional paid-in capital		19,946,066		19,681,959
Accumulated deficit		(22,309,707)		(21,925,000)
Total stockholders’ deficit		(2,202,746)		(2,092,496)
Total liabilities and stockholders’ deficit	$	203,709	$	161,691

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

APPLIFE DIGITAL SOLUTIONS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

	Three Months Ended March 31,					Nine Months Ended March 31,
	2025		2024		2025		2024
Revenue	$	7,834	$	2,348	$	9,937	$	8,146
Cost of goods sold		(17)		(7,708)		(277)		(20,020)
Gross (loss) profit		7,817		(5,360)		9,660		(11,874)

Operating expenses		125,237		553,274		500,458		1,724,564
Total operating expenses		125,237		553,274		500,458		1,724,564

Loss from operations		(117,420)		(558,634)		(490,798)		(1,736,438)

Other income (expense)
Interest expense		(56,390)		(159,650)		(330,961)		(521,522)
Gain on termination of conversion feature on debt		-		-		-		417,526
Change in fair value of derivative liability		192,282		79,790		437,052		50,843

Net income (loss) before provision for income taxes		18,472		(638,494)		(384,707)		(1,789,591)

Provision for income taxes		-		-		-		-
Net income (loss)	$	18,472	$	(638,494)	$	(384,707)	$	(1,789,591)

Basic and diluted loss per share	$	0.00	$	(0.01)	$	(0.00)	$	(0.03)
Average number of common shares outstanding - basic and diluted		160,893,635		60,543,635		158,551,664		60,543,635

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

APPLIFE DIGITAL SOLUTIONS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

	Common Stock		Additional	Accumulated
	Shares	Amount	Paid-In Capital	Deficit	Total
Balance, December 31, 2023	150,543,635	$150,545	$16,197,818	$(18,025,501)	$(1,677,138)
Stock compensation	-	-	462,059	-	462,059
Net loss	-	-	-	(638,494)	(638,494)
Balance, March 31, 2024	150,543,635	$150,545	$16,659,877	$(18,663,995)	$(1,853,573)

Balance, June 30, 2023	150,543,635	$150,545	$15,287,798	$(16,874,404)	$(1,436,061)
Stock compensation	-	-	1,372,079	-	1,372,079
Net loss	-	-	-	(1,789,591)	(1,789,591)
Balance, March 31, 2024	150,543,635	$150,545	$16,659,877	$(18,663,995)	$(1,853,573)

	Common Stock		Additional	Accumulated
	Shares	Amount	Paid-In Capital	Deficit	Total
Balance, December 31, 2024	160,893,635	$160,895	$19,903,937	$(22,328,179)	$(2,263,347)
Stock compensation	-	-	42,129	-	42,129
Net income	-	-	-	18,472	18,472
Balance, March 31, 2025	160,893,635	$160,895	$19,946,066	$(22,309,707)	$(2,202,746)

Balance, June 30, 2024	150,043,635	$150,545	$19,681,959	$(21,925,000)	$(2,092,496)
Stock compensation	-	-	193,727	-	193,727
Issuance of shares due to LeSalon Purchase	10,350,000	10,350	70,380	-	80,730
Net loss	-	-	-	(384,707)	(384,707)
Balance, March 31, 2025	160,893,635	$160,895	$19,946,066	$(22,309,707)	$(2,202,746)

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

APPLIFE DIGITAL SOLUTIONS, INC.

UNAUDITED CONDENSED CONSOLIDATEDSTATEMENTS OF CASH FLOWS

		Nine Months Ended March 31,
		2025		2024
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(384,707)		(1,789,591)
Adjustment to reconcile change in net loss to net cash used in operating activities:
Amortization		235,644		415,938
Interest expense		95,317		44,053
Stock compensation expense		193,727		1,372,079
Gain on termination of conversion feature on debt		-		(417,526)
Change in fair value of derivative liability		(437,052)		(50,843)
Changes in operating assets and liabilities:
Accounts receivable		-		(1,680)
Prepaid expenses and other current assets		(1,145)		(14,045)
Inventories		-		19,836
Accounts payable and accrued expenses		79,056		132,900
Net cash used in operating activities		(219,160)		(288,879)

CASH FLOWS FROM INVESTING ACTIVITIES:
Deposits paid for the purchase of assets from Le Salon		-		(100,000)
Net cash used in investing activities		-		(100,000)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from convertible notes payable to stockholders		200,500		310,000
Proceeds from amounts due to officer		5,277		50,000
Net cash provided from financing activities		205,777		360,000

Net decrease in cash and cash equivalents		(13,383)		(28,879)
Cash and cash equivalents, beginning of period		22,894		57,619
Cash and cash equivalents, end of period	$	9,511		28,740

Non-cash investing and financing activities:
Increase in derivative liability upon issuance of convertible note	$	-	$	280,000
Payment of notes payable with issuance of options to purchase common stock	$	(10,350)	$	-

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

APPLIFE DIGITAL SOLUTIONS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1 – Organization, Going Concern and Summary of Significant Accounting Policies

Organization

APPlife Digital Solutions Inc. (the “Company”) is a business incubator and portfolio manager that uses digital technology to create and invest in e-commerce and cloud-based solutions. The Company was formed March 5, 2018 in Nevada and has a virtual office in San Francisco, California and the only employee works form Shanghai, China. Our office in San Francisco, California allows us to take advantage of the marketing opportunities available in the United States as well as keeping close proximity to sources of capital whether it is debt or equity. Our operations in Shanghai, China allows us to take advantage of a high concentration of skilled tech coders and developers at lower capital costs than in more developed countries such as the United States or Europe. The Company’s mission is using digital technology to create APPs and websites that make life, business and living easier, more efficient and just smarter.

Rooster Essentials APP SPV, LLC (the “Rooster”), incorporated on April 9, 2019, is a wholly owned subsidiary of the Company. Rooster is a fully customizable men’s subscription service that delivers daily use grooming needs and essential items.

B2BCHX SPV LLC (the “B2BCHX”), incorporated on June 5, 2019, is a wholly owned subsidiary of the Company. B2BCHX does an independent background check on mainland Chinese companies for small businesses globally.

Office Hop, incorporated on January 28, 2021, is a wholly owned subsidiary of the Company. Office Hop is a global sharing model platform for short term rentals of office and meeting rooms. Users can find an office or conference space for half-day, full-day, or weekly rental. Hosts can list their spare office or meeting rooms.

Going Concern

The Company has generated losses and negative cash flows from operations since inception. The Company has historically financed its operations from equity financing. The Company anticipates additional equity financings to fund operations in the future. Should management fail to adequately address the issue, the Company may have to reduce its business activities or curtail its operations. There can be no assurance that any additional financings, would be available to the Company on satisfactory terms and conditions if at all. This raises substantial doubt about its ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company’s ability to raise additional capital and implement its business plan. The condensed consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

The accompanying condensed consolidated financial statements have been prepared on a going concern basis of accounting, which contemplates continuity of operations, realization of assets and classification of liabilities and commitments in the normal course of business. The accompanying condensed consolidated financial statements do not reflect any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classifications of liabilities that might result if the Company is unable to continue as a going concern.

Basis of Presentation

The accompanying condensed consolidated financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States, or U.S. GAAP. All intercompany transactions have been eliminated in consolidation.

Cash and Cash Equivalents

For the purpose of the condensed consolidated statement of cash flows, the Company considers cash equivalents to include cash and investments with an original maturity of three months or less.

Income Taxes

The Company has adopted guidance issued by the FASB that clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold of more likely than not and a measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. In making this assessment, a company must determine whether it is more likely than not that a tax position will be sustained upon examination, based solely on the technical merits of the position and must assume that the tax position will be examined by taxing authorities. The Company’s policy is to include interest and penalties related to unrecognized tax benefits in income tax expense. The Company had no accrual for interest or penalties as of March 31, 2025. The Company files income tax returns with the Internal Revenue Service (“IRS”) and the state of California.

Use of Estimates

Generally accepted accounting principles require that the condensed consolidated financial statements include estimates by management in the valuation of certain assets and liabilities. Significant matters requiring the use of estimates and assumptions include, but are not necessarily limited to, fair value of the Company’s stock, stock-based compensation, BCF (Beneficial Conversion Feature) liabilities feature of convertible debt, derivate liabilities, and valuation allowance relating to the Company’s deferred tax assets. Management uses its historical records and knowledge of its business in making these estimates. Management believes that its estimates and assumptions are reasonable, based on information that is available at the time they are made. Accordingly, actual results could differ from those estimates.

Revenue Recognition

The Company recognizes revenue from the sale of products and services in accordance with ASC 606, ”Revenue from Contracts with Customers,” by applying the following steps: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to each performance obligation in the contract; and (5) recognize revenue when each performance obligation is satisfied.

Stock Based Compensation

The Company accounts for share-based compensation in accordance with the fair value recognition provision of FASB ASC 718, Compensation – Stock Compensation (“ASC 718”), prescribes accounting and reporting standards for all share-based payment transactions in which employee services are acquired. Transactions include incurring liabilities, or issuing or offering to issue shares, options, and other equity instruments such as employee stock ownership plans and stock appreciation rights. Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the condensed consolidated financial statements based on the estimated grant date fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period).

The Company accounts for share-based compensation issued to non-employees and consultants in accordance with the provisions of FASB ASC 505, Equity–based Payments to Non-Employees (“ASC 505”). Measurement of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable: (a) the goods or services received; or (b) the equity instruments issued. The fair value of the share-based payment transaction is determined at the earlier of performance commitment date or performance completion date.

Net Loss per Share

Basic net loss per share is calculated by dividing the net loss for the period by the weighted-average number of common shares outstanding during the period. Diluted net loss per share is calculated by dividing the net loss for the period by the weighted-average number of common shares outstanding during the period, increased by potentially dilutive common shares (“dilutive securities”) that were outstanding during the period. Dilutive securities include stock options and warrants granted, convertible debt, and convertible preferred stock. The conversion features on convertible notes, the stock options outstanding and potentially dilutive. Diluted net loss per common share is the same as basic net loss per common share as the potential dilutive shares are considered to be anti-dilutive. There were

98,745,976 potentially dilutive securities for the nine months ended March 31, 2025 and 74,393,933 potentially dilutive securities for the nine months ended March 31, 2024.

Fair Value of Financial Instruments

The Company follows FASB ASC 820, Fair Value Measurements and Disclosures (“ASC 820”) to measure and disclosure the fair value of its financial instruments. ASC 820 establishes a framework for measuring fair value in U.S. GAAP and expands disclosures about fair value measurements and establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The three levels of fair value hierarchy defined by ASC 820 are described below:

Level 1: Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.

Level 2: Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.

Level 3: Pricing inputs that are generally unobservable inputs and not corroborated by market data.

Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable.

The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.

The carrying amounts reported in the Company’s financial statements for cash, and accounts payable and accrued expenses approximate their fair value because of the immediate or short-term nature of these financial instruments.

Derivative Liability

FASB ASC 815, Derivatives and Hedging, requires all derivatives to be recorded on the condensed consolidated balance sheet at fair value. As of March 31, 2025, we used the Black-Scholes-Merton (BSM) model to estimate the fair value of the conversion feature of the convertible note. Key assumptions of the BSM model include the market price of our stock, the conversion price of the debt, applicable volatility rates, risk-free interest rates and the instrument’s remaining term. These assumptions require significant management judgment. In addition, changes in any of these variables during a period can result in material changes in the fair value (and resultant gains or losses) of this derivative instrument.

Inventories

Inventories, consisting of raw materials, work in process and products available for sale, are primarily accounted for using the first-in, first-out method (“FIFO”), and are valued at the lower of cost or net realizable value. This valuation requires management to make judgements based on currently available information, about the likely method of disposition, such as through sales to individual customers and returns to product vendors. On June 30, 2024, the Company wrote off all inventory using the allowance method. Total inventory as of March 31, 2025, net of allowance for inventory reserves was $0.

Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments. ASU 2016-13 requires entities to use a forward-looking approach based on current expected credit losses (“CECL”) to estimate credit losses on certain types of financial instruments, including trade receivables. The adoption of this on July 1, 2023 did not have a material impact on its financial statements.

In July 2023, the FASB issued ASU No 2023-03, “Presentation of Financial Statements (Topic 205), Income Statement—Reporting Comprehensive Income (Topic 220), Distinguishing Liabilities from Equity (Topic 480), Equity (Topic 505), and Compensation—Stock Compensation (Topic 718)” pursuant to SEC Staff Accounting Bulletin No. 120, which adds interpretive guidance for public companies to consider when entering into share-based payment transactions while in possession of material non-public information. The adoption of this on July 1, 2024 did not have a material impact on its financial statements.

In November 2023, the FASB issued Accounting Standards Update 2023-07—Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. All public entities will be required to report segment information in accordance with the new guidance starting in annual periods beginning after December 15, 2023. The adoption of this on July 1, 2024 did not have a material impact on its financial statements.

In August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20), and Derivatives and Hedging—Contracts in an Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The amendments in ASU No. 2020-06 simplify the complexity associated with applying GAAP for certain financial instruments with characteristics of liabilities and equity. More specifically, the amendments focus on the guidance for convertible instruments and derivative scope exceptions for contracts in an entity’s own equity. For smaller reporting companies, ASU 2020-06 is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years.  The adoption of this on July 1, 2024, did not have a material impact on its financial statements.

Recently Issued Accounting Standards Not Yet Adopted

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” which is intended to enhance the transparency and decision usefulness of income tax disclosures. The guidance addresses investor requests for enhanced income tax information primarily through changes to the rate reconciliation and income taxes paid information. The guidance is effective for annual periods beginning after December 15, 2024. We are assessing the impact of this guidance on our disclosures.

In November 2024, the FASB also issued ASU 2024-03, Disaggregation of Income Statement Expenses, which will require the disclosure of additional information about specific expense categories in the notes to the financial statements. The guidance is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. For us, annual reporting requirements will be effective for our fiscal year 2028 beginning on July 1, 2027, and interim reporting requirements will be effective beginning with our first quarter of fiscal year 2029. Early adoption is permitted. We are currently evaluating the impact of this amended disclosure guidance.

Other accounting pronouncements issued but not yet effective are not believed by management to be relevant or to have a material impact on the Company’s present or future condensed consolidated financial statements.

Note 2 – Revenues

The company recognizes revenue when it transfers its promised goods or services to customers in an amount that reflects the consideration to which it expects to be entitled in exchange for those goods or services.

The Company’s condensed consolidated revenue primarily comprises of Applife ROOSTER online sales of men’s grooming essentials.

Revenue consists of the following:

		Three Months Ended March 31, 2025		Three Months Ended March 31, 2024
Rooster Essentials Sales	$	7,834	$	2,348
Background Checks Sales		-		-
Service Fee – OfficeHop		-		-
Total Revenue	$	7,834	$	2,348

		Nine Months Ended March 31, 2025		Nine Months Ended March 31, 2024
Rooster Essentials Sales	$	9,937	$	8,146
Background Checks Sales		-		-
Service Fee – OfficeHop		-		-
Total Revenue	$	9,937	$	8,146

Rooster Essentials APP SPV, LLC (“Rooster”), incorporated on April 9, 2019, is a wholly owned subsidiary of the Company. Rooster is a fully customizable men’s subscription service that delivers daily use grooming needs and essential items. As of March 31, 2025, Rooster sales make up 100% of revenue of the company.

For the Grooming Essential Sales, the Company defines its customer as an individual who purchases products through their website of mobile application. The Company satisfies its performance obligation for products at a point in time, which is upon delivery of the products through a third-party e-commerce fulfillment center. The customer obtains control of the products upon the Company’s completion of its performance obligations. The company purchases and owns all inventory and sells directly with the end-use customer using a third-party fulfillment center.

B2BCHX is a fully developed app that is available in Google Play and a functioning ecommerce and mobile website. B2BCHX allows business owners around the world to order three levels of background checks in English on Chinese companies to prevent fraudulent business transactions and to gather information in order to gain confidence when doing business with a Chinese entity or to pursue legal remedy against a fraudulent Chinese Company. The reports are researched and written by a licensed law firm in Shanghai China in a partnership agreement with B2BCHX. The partnership splits the revenue 20% for the law firm, while Applife Digital Solutions receives 80%. As of March 31, 2025, the software for B2BCHX is fully developed but has yet to become operational. The Company is currently waiting for a change in Chinese law that will allow the law firm to share information of Chinese companies overseas.

Office Hop is a global sharing model platform for short term rentals of office and meeting rooms. The OFFICE HOP model is like Airbnb for short term shared or private office space and meeting rooms. Offices that have an extra office, shared desk, an empty meeting room or conference room may list the space and act as a host for a user. Those users in need of a short-term shared desk, meeting room or private office may locate one on our platform and rent it out for use as needed by the hour, half day, full day, week or month. The company will also offer access to creative spaces such as photo studios and pop-up art galleries and will offer restaurants with private rooms a way to rent out the space with a menu included for group or lunch meetings. Office Hop is expected to generate revenue from the 10-15% service fee charged to Users through the use of the app. As of March 31, 2025, the software for OfficeHop is fully developed but has yet to become operational.

Note 3 – Notes payable

On May 4, 2024, the Company financed its insurance premiums through its insurance broker amounting to $29,415 that carries an annual interest rate of 13.21% and matures through March 2025 in ten equal payments of $2,942. The net carrying amount of the note is $0 and $26,474 as of March 31, 2025 and June 30, 2024.

Note 4 – Convertible notes payable to stockholder

On February 4, 2022, the Company sold convertible note bearing 12% interest per annum in the principal amount of $350,000 (“February 2022 Notes”). The note will be paid in three tranches with first tranche of $100,000 received on March 28, 2022. The second and third tranches of $150,000 and $100,000 each, were received on May 3, 2022, and June 21, 2022, respectively. The note is subject to certain ownership limitations and will be convertible at the option of the holder at any time into shares of the Company’s common stock at an effective conversion rate of $ 0.013. The February 2022 Notes contain embedded derivatives, see Note 9.

On August 26, 2022, the Company sold convertible note bearing 12% interest per annum in the principal amount of $325,000 (“August 2022 Notes”). The note is disbursed in three tranches with first tranche of $125,000 received on September 1, 2022. The second tranche of $100,000 was received on September 19, 2022 and the third tranche of $100,000 was received on October 15, 2022. The note is subject to certain ownership limitations and will be convertible at the option of the holder at any time into shares of the Company’s common stock at an effective conversion rate of $0.046. The August 2022 Notes contain embedded derivatives, see Note 9.

On December 21, 2022, the Company sold convertible note bearing 12% interest per annum in the principal amount of $120,000 (“December 2022 Notes”). The note is disbursed in four tranches with first tranche of $40,000 received on January 10, 2023, and the remaining tranches of $20,000, $20,000 and $40,000 received on February 10, 2023, March 3, 2023 and March 31, 2023, respectively. The December 2022 Notes contain embedded derivatives, see Note 9.

On April 24, 2023, the Company sold convertible note bearing 12% interest per annum in the principal amount of $280,000 (“April 24, 2023 Notes”). The first tranche of $80,000 was received on July 31, 2023 and the remaining tranches of $100,000 each received on October 13, 2023 and December 1, 2023, respectively. The April 24, 2023 Notes contain embedded derivatives, see Note 9.

On April 30, 2023, the Company sold convertible note bearing 12% interest per annum in the principal amount of $100,000 (“April 30, 2023 Notes”). The note is disbursed in three tranches with the first tranche of $20,000 received on May 12, 2023, and the remaining tranches of $40,000 each received on May 31, 2023 and June 28, 2023, respectively. The April 30, 2023 Notes contain embedded derivatives, see Note 9.

On September 27, 2023, the Company converted the first tranche of the February 2022 Notes with principal balance amounting to $100,000 and $18,016 of accrued interest into 5,632,283 stock options. The options expire in five years with the exercise price at $0.02. The options were valued at $167,961 using Black Scholes.

On December 31, 2023, the Company amended the terms of the February 2022 Notes by revising its settlement from conversion into shares of the Company’s common stock to cash upon maturity, which is twelve (12) months following the date of amendment, losing the convertible feature of the February 2022 Notes and retaining the principal and interest on the 1st tranche that was previously converted amounting to $100,000 and $18,016, respectively.

On January 30, 2024, the company issued a promissory note bearing 12% interest per annum in the principal amount of $30,000. The note has a maturity date of January 25, 2025.

On May 2, 2024, the company issued a promissory note bearing 12% interest per annum in the principal amount of $30,000. The note has a maturity of May 2, 2025.

On April 29, 2024, the Company amended the conversion price of all the convertible promissory notes outstanding for common stock upon maturity. Upon execution and delivery of the amendment, 19,005,896 shares shall be issued to the Lender to convert all convertible notes to common stock. All convertible notes will be deemed satisfied and no longer outstanding after the issuance of shares. Execution of amendment will occur when one or more of the following events takes place: (1) the closing of the sale, lease, exclusive license, transfer or other disposition of all or substantially all of the company’s assets, (2) the consummation of the reorganization, merger or consolidation of the Company with or into another entity, or (3) the closing of the sale, transfer, or issuance, in one transaction or series of transactions of the company’s securities, and hold at least majority of the voting power of the capital stock of the Company. As March 31, 2025, no such event has occurred.

On June 26, 2024, the company issued a promissory note bearing 12% interest per annum in the principal amount of $50,000. The note has a maturity of June 26, 2025. The company received the funds on July 6, 2024.

On August 7, 2024, the company issued a promissory note bearing 12% interest per annum in the principal amount of $110,500. As of March 31, 2025, the company has received a total of $110,500.

On December 19, 2024, the company issued a promissory note bearing 12% interest per annum in the principal amount of $40,000. The note has a maturity of December 19, 2025. In addition to the payment of principal and interest, the holder shall receive an equity premium in common shares of the company in the amount of interest earned on the Note and converted into common stock at the price per share at the end of trading day on the date of the maturity date. Total amount of the equity premium is $4,400 and it is amortized over the life of the note.

The net carrying amount of the notes payable to shareholder is $640,500 and $440,000 as of March 31, 2025 and June 30, 2024, respectively. The remainder are convertible notes payable totaling $825,000 and $825,000, as of March 31, 2025 and June 30, 2024, respectively.

The outstanding balance of notes payable were as follows:

		March 31, 2025		June 30, 2024
Non-convertible notes principal balance	$	640,500	$	440,000
Convertible Notes principal balance	$	825,000	$	825,000
Unamortized debt discount		(14,347)		(245,191)
	$	1,451,153	$	1,019,809

A detailed roll forward schedule is shown as follows:

		Amount
Balance of convertible notes payable, net of discount on June 30, 2024	$	1,019,809
Amortization of debt discount		235,644
New Issuances		200,500
Paydown of debt with common stock payable		(4,800)
Balance of convertible notes payable, net of discount as of March 31, 2025	$	1,451,153

Note 5 – Related Party Transactions

Due to Officer

During the nine-months ended March 31, 2025, the Company received advances from its officer to pay for certain operating expenses. The balance due to the officer March 31, 2025 and June 30, 2024 was $73,777 and $68,500, respectively. There are no definitive repayment terms and no interest is accruing on these advances.

Notes Payable

During the nine months ended March 31, 2025, the Company had promissory notes payable due to shareholders totaling $640,500 and convertible notes payable to shareholders totaling $825,000, offset by unamortized debt discount of $14,347. See Note 4 for more detailed information.

Note 6 – Concentrations

Cash Concentration

The Company maintains its cash and cash equivalents at financial institutions in the United States and China, which may, at times, exceed federally insured limits or similar limits in foreign jurisdictions. On March 31, 2025, the Company’s cash balance did not exceed the FDIC insurance limit. The Company has not experienced any losses in such accounts.

Note 7 – Commitments and Contingencies

Legal Matters

From time to time the Company may be involved in certain legal actions and claims arising in the ordinary course of business.

The Company is currently involved in a legal proceeding related to an alleged breach of contract related to a contractor performing IR services for Applife Digital Solutions. The contractor is claiming $50,000 due to the daily penalty fee for non-payment. ALDS does not believe that a breach of contract took place and believes this claim is without merit. The Company is currently hiring an attorney and requesting a continuance. The company is expecting these proceedings to go to small claims court, mediation, or if taken to court, filing a motion to dismiss. Due to these legal proceedings, the Company has accrued $15,000 in legal fees for settlement purposes.

The Company was not a party to any other legal actions or claims on March 31, 2025.

LeSalon Asset Purchase

On January 11, 2024, the Company agreed to pay Le Salon, a third party, a total consideration of $1,400,000 for the acquisition of certain intellectual property rights. The consideration comprised $100,000 in cash and $1,300,000 in the Company’s common stock. The intellectual property (“IP”) is currently being transitioned, and the Company expects the IP will be operational in fiscal year 2026. Until the transfer of control is completed, the Company will not recognize the acquired IP on its balance sheet. As of March 31, 2025, the Company partially issued 10,350,000 common stock on August 9, 2024 at market value totaling $80,730.

Note 8 – Stockholders’ Deficit

As of March 31, 2025, and June 30, 2024, there were 160,893,635 and 150,543,635 shares of common stock issued and outstanding.

Restricted stock and stock options

During the three and nine months ended March 31, 2025, the Company recognized stock compensation expense on outstanding restricted stock awards and stock options of $0 and $0, respectively. During the three and nine months ended March 31, 2024, the Company recognized stock compensation expense on outstanding restricted stock awards and stock options of $462,059 and $1,372,079, respectively. The restricted stock options were fully vested as June 30, 2024.

During the three and nine months ended March 31, 2025, the Company recognized $0 and $0 of expense related to the vesting of stock options to its board members and consultants. During the three and nine months ended March 31, 2024, the Company recognized $106,560 and $297,860 of expense related to the vesting of stock options to its board members and consultants. Stock compensation expense is summarized as follows:

	Three Months Ended		Three Months Ended		Nine Months Ended			Nine Months Ended
	March 31, 2025		March 31, 2024		March 31, 2025			March 31, 2024
Restricted stock awards	$	-	$	355,469	$	-	$	1,074,219
Stock options awards		42,129		106,560		193,727		297,860
Total	$	42,129	$	462,059	$	193,727	$	1,372,079

During the nine months ended March 31, 2025, the Company granted 0 options to its board members and consultants and cancelled 0 options. The options granted in fiscal year 2024 vest pro-rata over the vesting period, have exercise prices ranging from $0.01 - $0.018 and expire in five years from the date of grant.

	Options		Weighted Average Exercise Price per Share			Weighted Average Remaining Life (Years)
Outstanding – June 30, 2023		51,322,083		$	0.04		4.14
Granted		28,710,133			0.03		6.57
Reversal of conversion		(5,638,283)			-		-
Exercised		-			-		-
Outstanding – March 31, 2024		74,393,933		$	0.04		3.74

Outstanding – June 30, 2024		98,745,976		$	0.05		3.74
Granted		-			-		-
Exercised		-			-		-
Outstanding – March 31, 2025		98,745,976		$	0.03		2.93

Note 9 – Derivative Liability

The Company issued debts that consist of the issuance of convertible notes with variable conversion provisions. The conversion terms of the convertible notes are variable based on certain factors, such as the future price of the Company’s common stock. The number of shares of common stock issuable upon conversion of the promissory note is indeterminate. Pursuant to ASC 815-15 Embedded Derivatives, the fair values of the variable conversion option and shares to be issued were recorded as derivative liabilities on the issuance date and revalued at each reporting period.

A summary of quantitative information with respect to valuation methodology and significant unobservable inputs used for the Company’s common stock purchase warrants that are categorized within Level 3 of the fair value hierarchy for the nine months ended March 31, 2025 is as follows:

	Nine Months Ended March 31, 2025
Stock price	$	0.01
Exercise price	$	0.01
Contractual term (in years)		0.04-0.24
Volatility (annual)		343.47%
Risk-free rate		4.25% - 4.45%

The foregoing assumptions are reviewed quarterly and are subject to change based primarily on management’s assessment of the probability of the events described occurring. Accordingly, changes to these assessments could materially affect the valuations.

Financial Liabilities Measured at Fair Value on a Recurring Basis

Financial liabilities measured at fair value on a recurring basis are summarized below and disclosed on the balance sheet under Derivative liability – warrants and derivative liabilities:

	Fair value measured at March 31, 2025
	Quoted prices in active markets		Significant other observable inputs		Significant unobservable inputs			Fair value at
	(Level 1)		(Level 2)		(Level 3)			March 31, 2025
Derivative liability	$	-	$	-	$	291,299	$	291,299
Total	$	-	$	-	$	291,299	$	291,299

	Fair value measured at June 30, 2024
	Quoted prices in active markets		Significant other observable inputs		Significant unobservable inputs			Fair value at
	(Level 1)		(Level 2)		(Level 3)			June 30, 2024
Derivative liability	$	-	$	-	$	728,351	$	728,351
Total	$	-	$	-	$	728,351	$	728,351

The fair value accounting standards define fair value as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is determined based upon assumptions that market participants would use in pricing an asset or liability. Fair value measurements are rated on a three-tier hierarchy as follows:

	·	Level 1 inputs: Quoted prices (unadjusted) for identical assets or liabilities in active markets;

	·	Level 2 inputs: Inputs, other than quoted prices included in Level 1, that are observable either directly or indirectly; and

	·	Level 3 inputs: Unobservable inputs for which there is little or no market data, which require the reporting entity to develop its own assumptions.

There were no transfers between Level 1, 2 or 3 during nine months ended March 31, 2025.

During the three and nine months ended March 31, 2025, the Company recorded gains of $192,282 and $437,052 respectively, from the change in fair value of derivative liability.

During the three and nine months ended March 31, 2024, the Company recorded gains of $79,790 and $50,843 respectively, from the change in fair value of derivative liability.

The following table presents changes in Level 3 liabilities measured at fair value for the period ended March 31, 2025:

	Derivative Liability
Balance as of June 30, 2024	$	728,351
Change in fair value		(437,052)
Balance as of March 31, 2025	$	291,299

The balance of the derivative liability at March 31, 2025 and June 30, 2024 was $291,299 and $728,351, respectively.

Note 10 – Subsequent Events

The Company has evaluated subsequent events through the filing of this Quarterly Report on Form 10-Q and determined that the following material events occurred.

In April 25, 2025, the Company entered into an Acquisition Agreement (the “Agreement”) pursuant to which the Company shall acquire all the equity interests in Sugar Auto Parts, Inc., a Nevada corporation (“Sugar”) in exchange for 240,000,000 shares of restricted common stock of the Company, 15,000 shares of a newly designated class of Series A preferred stock, 4,500 shares of a newly designated class of Series B preferred stock, 2,500 shares of a newly designated class of Series C preferred stock. Further, Sugar shall pay an initial cash payment of $150,000 to the Company and an additional cash payment of $150,000 within ninety-five (95) days of the closing of the Agreement.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Management's Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements that involve known and unknown risks, significant uncertainties and other factors that may cause our 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 those forward-looking statements. You can identify forward-looking statements by the use of the words may, will, should, could, expects, plans, anticipates, believes, estimates, predicts, intends, potential, proposed, or continue or the negative of those terms. These statements are only predictions. In evaluating these statements, you should consider various factors which may cause our actual results to differ materially from any forward-looking statements. Although we believe that the exceptions reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements. We undertake no obligation to revise or update publicly any forward-looking statements for any reason.

Overview

APPlife Digital Solutions, Inc. (the “Company”) was formed March 5, 2018, in Nevada and has offices in San Francisco, California and Shanghai, China. Our office in San Francisco, California allows us to take advantage of the marketing opportunities available in the United States as well as keeping close proximity to sources of capital whether it is debt or equity. Our offices in Shanghai, China allows us to take advantage of a high concentration of skilled tech coders and developers at lower capital costs than in more developed countries such as the United States or Europe. The Company’s mission is using digital technology to create and invest in eCommerce and Cloud based businesses that make life, business and living easier, more efficient, and just smarter.

Plan of Operation

Our marketing and business management/executive team will operate from both Shanghai China and our offices in San Francisco. Matt Reid is technically the only employee of the Company, and he resides in Shanghai, China, in order to manage the independent contractor teams of developers the Company hires. We have an attorney in Shanghai engaged to help us with the contracts and negotiations with developers and other similar items. We have multiple independent contractor team members for the Company that live and work in the US who make up our business management and executive teams. They do not operate in China, and we generate no revenue in China. Our independent contractors fill positions such as Chief Legal Officer, Executive Project Director, Accountant and Investor relations manager and are all located in New York. Our Director of Marketing, PR agent and multiple lower-level independent contractors reside and work in California. None of the operating business models we have are generating any revenue from Chinese based businesses. Currently 100% of our revenue comes from an ecommerce platform servicing US customers and there are no current plans to buy or develop any new Chinese based business models.

We will continue to explore new concepts and opportunities to invest in projects that meet our criteria We have incurred expenses and operating losses, as part of our activities in developing e-commerce platforms, B2BCHX, OFFICEHOP, ROOSTER ESSENTIALS, Valida and Global Hemp Service LLC. The capital we raise will go into marketing, acquisitions, and revenue generation. We believe this will take our vision forward and to the next level.

The APPlife Digital Solutions business model is two-fold. First, is to market our current in-house developed projects ecommerce and cloud-based business over the next year, work to add partnerships and add additional in-house developed projects. We plan to engage multiple resources such as adding staff, create partnerships, and as capital becomes available, to market and grow revenue.

The second, but equally important part of our business model is to target acquisitions and projects that can be assisted by our marketing and capitalization capabilities where we can play an active role in the project’s success and make the acquisitions to add to our revenue stream. We seek acquisition targets that have a model that fits our vision and area of interest, is currently generating revenue with room for growth and a strong management team that will stay on board and continue to operate the entity post-acquisition. We have signed an asset purchase agreement to buy the assets around the operations of an online beauty company with revenue.

Our current projects:

B2BCHX is our first fully developed app that is available in Google Play and a functioning ecommerce and mobile website. B2BCHX allows business owners around the world to order three levels of background checks in English on Chinese companies to prevent fraudulent business transactions, to gather information in order to gain confidence when doing business with a Chinese entity or to pursue legal remedy against fraudulent Chinese Company. The reports are researched and written by a licensed law firm in Shanghai China in a partnership agreement with B2BCHX. These reports are not auto generated and are carefully researched to give our users the most accurate information. The retail price for each report is $79, $399 and $1299. The partnership with the law firm is on a 20% revenue share, which leaves B2BCHX an 80% per report profit margin to cover development expenses, maintenance and profit. We are waiting for a temporary law change that will allow the attorney to send information on Chinese entities overseas.

ROOSTER ESSENTIALS ecommerce website, has been operations in the third quarter of fiscal year 2020 and launched its full commercial operations in the second quarter of 2022. ROOSTER ESSENTIALS is an online men’s grooming supply store, and it allows men to fully customize which products they receive and set up an auto-delivery schedule for each product for automatic recurring delivery. ROOSTER ESSENTIALS currently carries over 200 products from over 80 brands. We anticipate the sources of revenue will come from purchases, advertising and sponsorships.

OFFICE HOP entered beta testing in the fourth quarter of 2021 and is now fully functional. We believe OFFICE HOP fits perfectly into the needs of the post Covid working world, where short-term offices and meeting rooms will be in high demand. The OFFICE HOP model is like Airbnb for short term shared or private office space and meeting rooms. Those offices that have an extra office, shared desk, an empty meeting room or conference room may list the space and act as a host for a user. Those users in need of a short-term shared desk, meeting room or private office may locate one on our platform and rent it out for use as needed by the hour, half day, full day, week or month. We will also offer access to creative spaces such as photo studios and pop-up art galleries and will offer restaurants with private rooms a way to rent out the space with a menu included for group or lunch meetings. The revenue is expected to come from the 10-15% service fee charged to Users for finding and making a transaction with one of our listed properties. The platform is global. We will begin operations in North America and Europe and then eventually operate in South America and Asia.

Global Hemp Services LLC is a low risk and low-cost participation in the fast growing Hemp and CBD market space. We have licensed out our fully functional ecommerce platform in exchange for a 15% equity position and 2.5% revenue share, with exclusive rights to purchase an additional 36% of the equity (for a total of 51%) upon reaching revenue benchmarks. Global Hemp Service LLC distributes Hemp and CBD products globally, including Hemp based building materials, textiles, plastics, paper, personal care items and various CBD products. They will distribute wholesale to shops and stores and retail directly to consumers.

Lollipop NFT will have a new name and will now be known as Valida. We have changed the model initially presented for Lollipop. Formerly an online marketplace, consignment store, creator platform, and wallet, it is now intended to be what we call a super wallet. It is non-custodial and will be able to be connected through API directly to various marketplaces of the user’s choice. We will focus on storing and sharing of NFTs that represent practical use. For example, we will focus on Driver’s licenses, Diplomas, Real Estate escrow documents and title. The storage and ability to reference these valuable NFT documents as well as collections of NFT for storage will be available as the core model. The wallet will be a digital wallet, with cold storage for security. Once completed the system code will be audited by a third-party auditor and there will be multiple security daemons to monitor account login and asset transfers to protect the user. We have completed the design and preliminary development phase of this project, but have not yet begun writing the code. We plan to use the Polygon blockchain to create the wallet and have also lined up tech support with Polygon. We anticipate having a cold wallet system that allows the users to transfer between

storage and active modes and plan to include 2FA, fingerprint and/or facial recognition technology. We plan to have multiple additional security daemons that review account holdings and prevent unauthorized transfers and withdrawals, however we may be liable for any cybersecurity breach resulting in the loss of customer assets. We plan to have multiple additional security daemons that review account holdings and prevent unauthorized transfers and withdrawals. The main focus of our user base will be practical use NFTs. We believe this is the future best use scenario for NFTs. This is what we believe will set us apart from those systems designed to buy and sell digital art and items that may be considered securities. We expect users to store their important documents and certifications in files. An example is we will allow universities to bulk upload diplomas into the system that will be an image of the certificate with the graduate’s name in place. The Meta Data will show in a border area that discloses the name of the University, the degree, date of issue and an official University stamp. The User will have the option of receiving the NFT version by registering and then using a code provided by the school to download the diploma NFT into the wallet. This would also apply to Driver’s licenses issued by State DMVs, Real Estate Broker licenses, Wills and other important legal documents, Escrow or Title paperwork. We are not intending on blocking people from storing other types of NFTs, but our format and storage UI is not appealing to those collecting digital art. Our interface will resemble a windows filing system. It is tailored to cater to file storage for the practical use type.

Our DRINX project is in early stage of development and we believe the beta version will be ready by the second quarter of fiscal year 2025. DRINX app allows anyone to purchase a virtual drink ticket anywhere and at any time for friends and colleagues. We anticipate the sources of revenue will come from advertising and sponsorships from alcohol companies promoting products on the app, user fee of $0.99 to send each drink and discounts provided by the bars and restaurants for purchases made by the app.

Results of Operations for Three Months Ended March 31, 2025 and March 31, 2024

Revenue

For the three months ended March 31, 2025 and 2024, we generated revenue of $7,834 and $2,348, respectively. The Company has been in the process of marketing and developing its apps, hiring developers and coders, incurring professional fees for registering its common stock and identifying other apps and partnerships to generate revenues as the Company expands its operations.

The decrease was primarily due to successful marketing efforts in 2023 that decreased in 2024.

Operating Loss

For the three months ended March 31, 2025 and 2024 we had operating losses of $117,420 and $558,634, respectively. This decrease was due primarily to less stock compensation and professional fees incurred due to non-renewal of one of the Company’s consultants in the previous quarter.

Other Income (Expense)

For the three months ended March 31, 2025 and 2024, we had other income (expense) of $135,892 and $(79,860), respectively. The other income during the three months ended March 31, 2025, was due to interest expense of $56,390 and change in fair value of derivative liabilities of $192,282. The other income during the three months ended March 31, 2024, was due to interest expense of $159,650 and change in fair value of derivative liabilities of $79,790.

Net loss

We reported a net income of $18,472 and a net loss of $638,494 for the three months ended March 31, 2025, and 2024, respectively.

Results of Operations for Nine Months Ended March 31, 2024 and March 31, 2023

Revenue

For the nine months ended March 31, 2025 and 2024, we generated revenue of $9,937 and $8,146, respectively. The Company has been in the process of marketing and developing its apps, hiring developers and coders, incurring

professional fees for registering its common stock and identifying other apps and partnerships to generate revenues as the Company expands its operations.

Operating Loss

For the nine months ended March 31, 2025 and 2024, we had operating losses of $490,798 and $1,736,438, respectively. This decrease was due primarily to less stock compensation and professional fees incurred due to non-renewal of one of the Company’s consultants in the previous quarter.

Other Income (Expense)

For the nine months ended March 31, 2025 and 2024, we had other income (expense) of $106,091 and $(53,153), respectively. The other income during the nine months ended March 31, 2025, was due to interest expense of $330,961 and change in fair value of derivative liabilities of $437,052. The other income during the nine months ended March 31, 2024, was due to the gain on termination of conversion feature on debt of $417,526, partially offset by the interest expense of $521,522 and change in fair value of derivative liabilities of $50,843.

Net loss

We reported a net loss of $365,116 and $1,789,591 for the nine months ended March 31, 2025 and 2024, respectively.

Working Deficit

		March 31, 2025		June 30, 2024
Current assets	$	22,979	$	61,691
Current liabilities		2,406,455		2,254,187
Working deficit	$	(2,383,476)	$	(2,192,496)

We anticipate generating losses and, therefore, may be unable to continue operations in the future. If we require additional capital, we will have to issue debt or equity or enter into a strategic arrangement with a third party. The current liabilities as of March 31, 2025 and June 30, 2024 amounting to $2,406,455 and $2,254,187, respectively, include $291,299 and $728,351 of derivative liabilities which relate to the convertible notes payable and stock options. Upon exercise of the stock options and settlement of notes payable, the derivative liability will be reclassified as equity.

Going Concern

As reflected in the accompanying condensed consolidated financial statements, the Company has minimal revenue generating operations and has an accumulated deficit of $22,309,707 and $21,925,000 as of March 31, 2025 and June 30, 2024, respectively. In addition, the Company has experienced negative cash flows from operations since inception. This raises substantial doubt about its ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company’s ability to raise additional capital and implement its business plan. The condensed consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

The Company anticipates additional equity financing to fund operations in the future. Should management fail to adequately address the issue, the Company may have to reduce its business activities or curtail its operations.

Liquidity and Capital Resources

		Nine Months Ended March 31, 2025		Nine Months Ended March 31, 2024
Net Cash (Used) in Operating Activities	$	(219,160)	$	(288,879)
Net Cash (Used) in Investing Activities		-		(100,000)
Net Cash Provided by Financing Activities		205,777		360,000
Net (Decrease) in Cash	$	(13,383)	$	(28,879)

Our cash balance was $9,511 as of March 31, 2025. We recorded a net loss of $384,707 for the nine months ended March 31, 2025. We expect our expenses will continue to increase during the foreseeable future as a result of increased operations and the development of our apps and business operations. We anticipate generating revenues with our B2BCHX app, but only minimal revenues for our other apps over the next twelve months. Consequently, we are dependent on the proceeds from future debt or equity investments to sustain our operations and implement our business plan. If we are unable to raise sufficient capital, we will be required to delay or forego some portion of our business plan, which would have a material adverse effect on our anticipated results from operations and condensed consolidated financial condition. There is no assurance that we will be able to obtain necessary amounts of capital or that our estimates of our capital requirements will prove to be accurate.

We presently do not have any significant credit available, bank financing or other external sources of liquidity. Due to our operating losses, our operations have not been a source of liquidity. We will need to obtain additional capital in order to expand operations and become profitable. In order to obtain capital, we may need to sell additional shares of our common stock or borrow funds from private lenders. There can be no assurance that we will be successful in obtaining additional funding.

To the extent that we raise additional capital through the sale of equity or convertible debt securities, the issuance of such securities may result in dilution to existing stockholders. If additional funds are raised through the issuance of debt securities, these securities may have rights, preferences and privileges senior to holders of common stock and the terms of such debt could impose restrictions on our operations. Regardless of whether our cash assets prove to be inadequate to meet our operational needs, we may seek to compensate providers of services by issuance of stock in lieu of cash, which may also result in dilution to existing stockholders. Even if we are able to raise the funds required, it is possible that we could incur unexpected costs and expenses, fail to collect significant amounts owed to us, or experience unexpected cash requirements that would force us to seek alternative financing.

No assurance can be given that sources of financing will be available to us and/or that demand for our equity/debt instruments will be sufficient to meet our capital needs, or that financing will be available on terms favorable to us. If funding is insufficient at any time in the future, we may not be able to take advantage of business opportunities or respond to competitive pressures or may be required to reduce the scope of our planned marketing efforts and development of our apps, any of which could have a negative impact on our business and operating results. In addition, insufficient funding may have a material adverse effect on our financial condition, which could require us to:

·Curtail the development of our apps,

·Seek strategic partnerships that may force us to relinquish significant rights to our apps, or

·Explore potential mergers or sales of significant assets of our Company.

Operating Activities

During the nine months ended March 31, 2025 and 2024, the Company used $219,160 and $288,879 in cash to fund our operating activities, respectively.

During the nine months ended March 31, 2025, the cash used in operating activities was the result of net loss during the period partially offset by stock compensation expense, amortization of debt discount, interest expense, offset by change in fair value of derivative liabilities.

During the nine months ended March 31, 2024, the cash used in operating activities was the result of net loss during the period and gain from termination of conversion feature on debt, partially offset by stock compensation expense, amortization of debt discount, interest expense, change in fair value of derivative liabilities and an increase in working capital accounts.

Investing Activities

During the nine months ended March 31, 2025 and 2024, the company used $0 and $100,000 in cash to fund investing activities, respectively.

Financing Activities

Net cash provided by financing activities was $205,777 and $360,000 during the nine months ended March 31, 2025 and 2024, respectively.

During the nine months ended March 31, 2025, the Company received $200,500 of proceeds from the issuance of notes payable to stockholders and $5,277 of proceeds from amounts due to officer.

During the nine months ended March 31, 2024, the Company received $310,000 of proceeds from the issuance of notes payable to stockholders and $50,000 of proceeds from amounts due to officer.

Critical Accounting Policies and Estimates

The preparation of financial statements and related disclosures in conformity with U.S. generally accepted accounting principles (“GAAP”) and the Company’s discussion and analysis of its financial condition and operating results require the Company’s management to make judgments, assumptions and estimates that affect the amounts reported in its financial statements and accompanying notes. Note 1, “Summary of Significant Accounting Policies,” of the Notes to Financial Statements included in this Form 10-Q, describes the significant accounting policies and methods used in the preparation of the Company’s financial statements. Management bases its estimates on historical experience and on various other assumptions it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates, and such differences may be material.

Management believes the Company’s critical accounting policies and estimates are those related to revenue recognition. Management considers these policies critical because they are both important to the portrayal of the Company’s financial condition and operating results, and they require management to make judgments and estimates about inherently uncertain matters. The Company’s management has reviewed these critical accounting policies and related disclosures.

Revenue Recognition

The Company will recognize revenue from the sale of products and services in accordance with ASC 606, “Revenue from Contracts with Customers,” by applying the following steps: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to each performance obligation in the contract; and (5) recognize revenue when each performance obligation is satisfied.

Stock Based Compensation

Derivative Liability

Emerging Growth Company

We are an “emerging growth company” under the federal securities laws and will be subject to reduced public company reporting requirements. In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We are choosing to take advantage of the extended transition period for complying with new or revised accounting standards. As a result, our financial statements may not be comparable to those of companies that comply with public company effective dates.

Seasonality

We do not expect our sales to be impacted by seasonal demands for our products and services.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by our company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Our management carried out an evaluation under the supervision and with the participation of our Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 ("Exchange Act"). Based upon that evaluation, our Principal Executive Officer and Principal Financial Officer have concluded that our disclosure controls and procedures were not effective as of March 31, 2025, due to the material weaknesses resulting from the Board of Directors not currently having any independent members and no director qualifies as an audit committee financial expert as defined in Item 407(d)(5)(ii) of Regulation S-K, and controls were not designed and in place to ensure that all disclosures required were originally addressed in our financial statements.

Changes in Internal Control over Financial Reporting

Our management has also evaluated our internal control over financial reporting, and there have been no significant changes in our internal controls or in other factors that could significantly affect those controls subsequent to the date of our last evaluation.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

We know of no other material, existing or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which our director, officer or any affiliates, or any registered or beneficial stockholder, is an adverse party or has a material interest adverse to our interest.

ITEM 1A. RISK FACTORS.

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

None

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. MINE SAFETY DISCLOSURES.

Not Applicable.

ITEM 5. OTHER INFORMATION.

None.

ITEM 6. EXHIBITS

Exhibit Number	Description of Exhibit	Filing
31.1	Certification of Principal Executive Officer Pursuant to Rule 13a-14	Filed herewith.
31.2	Certification of Principal Financial Officer Pursuant to Rule 13a-14	Filed herewith.
32.1	CEO and CFO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act	Filed herewith.
101.INS*	XBRL Instance Document	Filed herewith.
101.SCH*	XBRL Taxonomy Extension Schema Document	Filed herewith.
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document	Filed herewith.
101.LAB*	XBRL Taxonomy Extension Labels Linkbase Document	Filed herewith.
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document	Filed herewith.
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document	Filed herewith.

*Pursuant to Regulation S-T, this interactive data file is deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	APPLIFE DIGITAL SOLUTIONS, INC.

Dated: May 9, 2025	/s/ Matt Reid
	Matt Reid,
	Principal Executive Officer,
	Principal Accounting Officer and Director

APPlife Digital Solutions Inc 10-Q